Trust crisis in the financial sector of economy and macroeconomic sustainability: structural equation modeling
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| Title: | Trust crisis in the financial sector of economy and macroeconomic sustainability: structural equation modeling |
| Authors: | Brychko, Maryna Litovtseva, Veronika Kravchenko, Oksana |
| Affiliation: | Education and Research Institute for Business Technologies «UAB» 57 Petropavlivska str., 40000, Sumy, Ukraine e-mail: m.brychko@uabs.sumdu.edu.ua |
| Bibliographic description: | Brychko, M., Litovtseva, V. & Kravchenko, O. (2019) Kryza doviry do finansovoho sektoru ekonomiky ta makroekonomichna stabilnist: strukturne modeliuvannia zviazkiv [Trust crisis in the financial sector of economy and macroeconomic sustainability: structural equation modeling]. Sotsialno-ekonomichni problemy i derzhava [Socio-Economic Problems and the State] (electronic journal), Vol. 21, no. 2, pp. 4-15. Available at: http://sepd.tntu.edu.ua/images/stories/pdf/2019/19bmmsmz.pdf |
| Issue Date: | dec-2019 |
| Submitted date: | sep-2019 |
| Publisher: | Ternopil Ivan Puluj National Technical University |
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DOI: |
https://doi.org/10.33108/sepd2019.02.004 |
| UDC: | 336.71 |
| JEL: | E320 E710 G41 O160 |
| Keywords: | trust crisis in the financial sector of economy transmission mechanism financial intermediation structural modeling macroeconomic stability |
| Pages: | 4-15 |
| First page: | 4 |
| Last page: | 15 |
| Abstract: |
A scientific and methodological approach to modelling of the interdependence between trust crisis in financial sector, development of financial intermediation, transmission mechanism of monetary policy and macroeconomic stability has been developed. It involves formation of four groups of indicators that characterize each of the researched sectors, the development and analysis of relevant structural equations and allows to evaluate nature and level of the researched sectors interconnection for any country. The causal links between the main parameters of macroeconomic stability, the confidence crisis, financial intermediation and the transmission mechanism of monetary policy are modeled within seven stages. It has been empirically confirmed that exacerbation of trust crisis in the financial sector without use of regulatory measures is detrimental to both long-term macroeconomic stability and prospects for economic growth. The simulation results confirmed the hypothesis that the aggravation of trust crisis in the financial sector of the economy while controlling the development of financial intermediation, leads to the sustainable economic growth of the country. As a result of the study it was confirmed the negative impact of the crisis of confidence in the financial sector on gross domestic product, country's balance of payments and sales of industrial products. Positive and stabilizing impacts of the transmission mechanism and the development of financial intermediation on the destructive effects of the confidence crisis was revealed. It was found that in order to overcome the erosion of trust crisis in the financial sector on macroeconomic stability there can be applied interest, credit and currency channels of the transmission mechanism of the country monetary policy. Keywords: trust crisis in the financial sector of economy, transmission mechanism, financial intermediation, macroeconomic stability, structural modeling. |
| URI: | http://elartu.tntu.edu.ua/handle/lib/30942 |
| ISSN: | 2223-3822 |
| Copyright owner: | Scientific Journal "Socio-Economic Problems and the State" |
| URL-releated material: | http://sepd.tntu.edu.ua/images/stories/pdf/2019/19bmmsmz.pdf |
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| Issue type: | Article |
| Appears in Collections: |
Scientific Journal "Socio-Economic Problems and the State", Vol.21, No.2
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