market for the purpose of optimizing components of fiscal and monetary policy
remains an urgent scientific and practical task.
Among issues that are not sufficiently investigated there are those concerning
potential use of both classical and modern financial products and services, and,
correspondently, supply and demand for them to regulate money supply in circulation
in order to ensure the effectiveness of monetary policy. Also, the positive effect that
the development of the financial market and the expansion of its boundaries will have
on the government’s tax policy is worth studying.
The objective of this research will be to determine the current role that the
Ukrainian financial market, financial services markets and their agents play in the
processes of shaping the national fiscal and monetary policy and ensuring its effective
implementation.
Presenting the main material of the research. In order to determine the role that
a financial market plays in the process of fiscal and monetary policy, we should first
explicate the most recent understanding of the essence of these areas of a government’s
activities. Therefore, today fiscal policy is being employed by the government as an
instrument to influence the development of the national economy, stimulate economic
growth and well-being and enhance Ukraine’s economic security. Fiscal policy is
applied in various ways and tends to rapid transformations
in situations when changes
in the state power take place, since different political forces and parties have their own
approaches to regulating the national economy, including taxation and budgetary
mechanisms. However, any government should adhere to a certain balance while
executing economic control and supervision
so as to facilitate economic growth
without interfering into the market mechanisms excessively.
The most effective instruments of fiscal policy in modern financial services
markets are price regulation, differentiation of financial institutions into profitable and
non-profit institutions with appropriate tax consequences for each of these categories
and a change in interest rates that significantly affect the supply and demand for
financial products and services.
Instruments, techniques and mechanisms of monetary policy are often used by
government agencies and government regulators of financial services markets in
tandem with monetary policy instruments. In any case, in order to achieve a positive
effect on the development of the economic system in the state, strategic guidelines and
tactical vectors of these two politicians should not be contradictory for each other.
It should be noted though that there is a fundamental difference between fiscal
policy and the principles of monetary policy. The latter aims at money supply
regulation, which ensures functioning of the whole structure of the national economic
system through regulating interest rates and some other regulatory measures affecting
the aggregate supply of the national currency. An efficient monetary policy is able to
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