ECONOMIC DIMENSIONS OF THE 2019 ELECTION CAMPAIGN IN UKRAINE

Abstract

This article analyzes determinants of a significant slowdown of the gross domestic product (GDP) growth in Ukraine in the wake of the 2019 election campaign. After the crisis of 2014-2015, the recovery of domestic GDP was quite successful until mid-2019. Our main finding is that the electoral results led to the long-term loss of GDP. Likely explanations are seen in the literature within a wide range of factors, such as the lack of conceptuality in economic policy, investment shortages, bad harvests, decrease in the value of transport services, inability to reform the system of crony capitalism, insufficient engagement of the National Bank of Ukraine (NBU) into economic processes etc. Among other empirical results, it is found that the long-term GDP is positively related to the terms-of-trade and the exchange rate appreciation (both relationships are hold in the short run as well). It is worth noting that the positive relationship between domestic GDP and the output of the Eurozone is observed in the short run only. Possibility of the correction of the long-term relationships in the short run is rather weak. The prospect of future research is to identify specific mechanisms of the negative relationship between the 2019 election campaign and GDP growth.