METHODOLOGICAL DEVELOPMENT FOR ASSESSING THE IMPACT OF M2-TO-GDP AND DEBT-TO-GDP RATIOS ON MACROECONOMIC STABILITY: A POLYNOMIAL ANALYSIS APPROACH

Borzenko O. Hlazova A. Lambekova A.
31 December 2025 West Ukrainian National University

Journal of European Economy
2025 #24 Issue 4 674 - 689 pp.

This study analyzes Ukraine’s M2/GDP and Debt/GDP ratios from 2000 to 2024 using polynomial smoothing techniques to uncover long-term trends in monetary and fiscal dynamics. The analysis demonstrates how fluctuations in money supply and public debt interact to influence inflation, liquidity, and overall macroeconomic stability. Findings indicate that both excessive and insufficient liquidity exacerbate inflationary pressures, while rising public debt, particularly during crises, constrains the effectiveness of monetary policy. By filtering out short-term volatility, polynomial analysis provides a clearer understanding of structural economic patterns and the impact of exogenous shocks such as financial crises, geopolitical tensions, and domestic policy shifts. The results offer valuable insights for policymakers, highlighting the importance of maintaining balanced monetary and fiscal conditions to ensure price stability, adequate liquidity, and sustainable economic growth in transitional and emerging economies.

Debt/GDP ratio , emerging economies , fiscal policy , inflation , M2/GDP ratio , macroeconomic stability , monetary policy , polynomial smoothing , Ukraine

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International Financial Research, SO «Institute for economics and forecasting of NAS of Ukraine», Kyiv, Ukraine
Sector for International Financial Research, SO «Institute for economics and forecasting of NAS of Ukraine», Kyiv, Ukraine
Department of Accounting and Auditing, Karaganda Buketov University, Karaganda, Kazakhstan

International Financial Research
Sector for International Financial Research
Department of Accounting and Auditing

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