SYSTEM-DYNAMIC MODELING OF THE SHADOW ECONOMY LEVEL OF UKRAINE

Abstract

In the conditions of transition of the country's economy from command-administrative to market, significant transformations in economic activity and in social and political life, there were many determinants of growth of the shadow economy. Today, the level of Ukraine's shadow economy has negative tendency also under the influence of global changes in the world economy and other transnational trends, including those caused by the Covid-19 pandemic. This leads to increased socio-economic instability in the country, rising public debt, turbulence in the labor market and other crises. The aim of the article is to analyze the dynamics of the shadow economy of our country and build a simulation model to predict its future values based on the main factors of influence. The article provides a retrospective analysis of the dynamics of the shadow economy over the past ten years and shows that this trend remains negative. The main branches of the economy and the level of the shadow economy in them according to the previous year are given. The significance of the level of the shadow economy of Ukraine and the Baltic countries is analyzed. The level of "shadowing" of Ukraine with the Baltic countries according to international rankings was compared, which showed the lack of simplicity of doing business, high level of corruption, low level of economic freedom. A system-dynamic model of the dependence of the level of the shadow economy on socio-economic factors is built. The forecast values of the shadow economy for the next three years have been determined. The main determinants of the growth of the shadow economy are identified: the average wage, the level of additional workload, the number of employed population of Ukraine. A number of measures in the field of state regulation are proposed, which are aimed at reducing the level of the shadow economy in our country. It is proved that the shadow economy has both positive and negative effects on the development of the country, but it is necessary to pursue public policy to reduce its scale and develop favorable conditions for business to come out of the shadow and economic development.