IDENTIFICATION OF FACTORS INFLUENCING THE EFFECTIVENESS OF FISCAL POLICY IN UKRAINE

Abstract

Fiscal policy is crucial for sustained economic growth. Studies that determined the list of factors affecting the effectiveness of policy had its beginning in the last century, but this issue does not lose its relevance today. Over the past twenty years, many countries have experienced unforeseen economic fluctuations and shocks, the duration and nature of which change each time. Therefore, there is a need to find innovative options for smoothing and ways to prevent fluctuations for sustainable economic development. One way is to use fiscal policy to achieve these goals. Fiscal policy or fiscal policy is used to achieve and ensure full employment, stable economic development by changing public spending, taxation system and approaches to the formation of the state budget as a whole [1]. State expenses include expenses for the functioning of its own institutions and state-significant purchases, directly in Ukraine such consider the state order for military and agricultural equipment. The second element of fiscal policy is revenues, and their greatest component is taxes. They can both stimulate the economy (reducing the tax burden) and "cool" it (increase the tax rate). The idea of fiscal policy is to find a balance between the mechanism of income formation, including through changes in the tax rate and government spending. Fiscal policy inherits goals such as stabilizing economic development, eliminating unemployment, strengthening the national economy to withstand shocks and the like. During the regulation of the structure and the relationship between the individual parts of the state budget, fiscal policy simultaneously has an impact on the state budget and economic development, thus performing interrelated functions – stabilizing and fiscal (distribution). The distributive function means adjusting the distribution of income and wealth through the tax system and changing public spending policies. In the short term, the need for stabilization is manifested in the stabilization of the macroeconomic situation, for example, an increase in spending or a reduction in taxes to stimulate the economy, which is in the stage of recession, or a reduction in spending and an increase in taxes to combat the threat of inflation and overheating of the economy. In the long term, the goal may be to promote sustainable growth or reduce poverty throu gh action by the government to improve, for example, infrastructure and education.