The New Issue of the NBU Visnyk Offers a New Approach to Nowcasting GDP, Studies Evolution of Ukraine’s Deposit Guarantee System, and Debates Burning Issues of Behavioral Finance
The December issue of Visnyk of the National Bank of Ukraine studies topics of
forecasting in central banks, practical aspects of reforms in Ukraine’s deposit
guarantee system and theory of households’ decisions in behavioral finance.
In particular, works presented in
the issue address problems of analytical capacity in the NBU and functioning of
Ukraine’s banking sector. Authors analyze existing
practices in short-term GDP forecasting and operation of deposit guarantee
system and provide suggestions on how to boost forecasting accuracy and
national financial stability. Another aspect of macrofinancial
stability that is discussed in the issue is the
behavior of households when they make decisions on investments and borrowing.
Articles published in the new issue
contain science-based conclusions and practical recommendations on the
following topics:
● Application
of methods of short-term forecasting in the NBU
The article "Nowcasting Ukraine"s GDP using a factor-augmented VAR (FAVAR)
model" by Anton Grui
and Roman Lysenko study the approach to nowcasting of
the current value of Ukraine’s quarterly GDP, which uses leading indicators
with a different disclosure frequency. The authors generalize data from a set of
explanatory variables into several factors by using principal components
analysis and estimate the factor-augmented VAR (FAVAR) model. The article shows
how incorporation of new data as they are published throughout a quarter
affects GDP nowcasts. The authors study the influence
of separate data releases on the accuracy of forecasts.
● A macroprudential perspective of changes in Ukraine’s deposit
guarantee system
The article "Evolving Ukraine’s Deposit Guarantee System
Towards Global Standards: A Macroprudential
Perspective" presents the results of a scientific research conducted
by Andriy Danylenko. In the context of his research,
the author proposes some changes to deposit guarantee system in Ukraine, which
can boost its contribution to national financial stability. Taking into account
the current post-crisis situation and challenges for the deposit guarantee
system in Ukraine, author analyzes the evolution of international research and
practice of building efficient deposit guarantee schemes in Europe and
globally.
● The
mechanism of household investment and borrowing decisions in behavioral finance
Pavlo Illiashenko
in his article "Behavioral Finance:
Household Investment and Borrowing Decisions" makes focus on problems
of household’s under-saving, non-participation, and under-diversification, as
well as mistakes in choosing debt contracts and managing debt obligations, in
the context of behavioral finance. In the author"s opinion, interpretation of
behavioral finance as a field solely devoted to the study of asset pricing and
behavior of individual investors is misleading. It overlooks a growing body of
empirical work in household finance, a subfield of behavioral finance concerned
with household investment and borrowing decisions. The author focuses on the
plurality of non-mutually exclusive explanations of the observed phenomena,
including those that come from the competing research traditions. The special
emphasis is made on the choice between fixed rate and
adjustable rate mortgages, given its significance for macrofinancial
stability. The review also discusses the evidence indicating that firms are
aware of households’ behavioral weaknesses and readily exploit them.
The new issue of Visnyk
of the National Bank of Ukraine is the eleventh issue published in the revised
format of the journal. Starting from September 2015, the NBU Visnyk is published on the
official NBU website in electronic format quarterly in Ukrainian and English.
The editorial board invites
academics, experts, financiers and representatives of banking academic
community to join the research within the scope of the journal and send research
materials to be reviewed and published to email: journal@bank.gov.ua.
Detailed information about the
publication and requirements to articles can be found
via the link:
Visnyk of the National Bank of Ukraine.
