Economic Impact of the Recent Decrease in Social Security Contributions in Ukraine

Philipp Engler, Simon Voigts, Robert Kirchner and Oleksandra Betliy
Additional contact information
Simon Voigts: Humboldt University Berlin
Robert Kirchner: German Advisory Group
Oleksandra Betliy: Institute for Economic Research and Policy Consulting

Visnyk of the National Bank of Ukraine, 2016, issue 237, 20-26

Abstract: Social security contributions paid by firms were massively reduced in January 2016. We employ a state-of-the-art DSGE model to assess the effects of this measure on output, private consumption, and other key macroeconomic variables. We find that it significantly boosts GDP and consumption while reducing inflation, and that these effects are sizable both in the short-term and in the long-term. We also report that the short-term impact is significantly stronger under an inflation targeting regime than under exchange rate stabilization.

Keywords: Fiscal devaluation; social security contributions (search for similar items in EconPapers)
JEL-codes: E62 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ukb:journl:y:2016:i:237:p:20-26

DOI: 10.26531/vnbu2016.237.020

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