name a few. but there are also two vital macroeconomic policy determinants. one, involving monetary policy, is a credible commitment to stable prices in the long run. the second, involving fiscal policy, concerns the share of total output devoted to national saving. output that is not devoted to saving will be consumed, and that's that. output that is saved, or reserved from consumption, will be devoted to capital investment, which equips workers with new capital, enhances productivity, and raises living standards. in recent years, the united states has been the fortunate beneficiary of a productivity growth spurt. both monetary and fiscal policy have played an important role. the commitment to and realization of stable prices have surely been a critical background forces, facilitating long - term planning and a more efficient allocation of resources. on the fiscal side, the role of saving and investment has been important as well. production - function decompositions of this growth spurt suggest that a good 30 to 40 percent of it has been due to so - called capital - deepening productivity change, reflecting increases in the economy's capital - labor ratio. fiscal policy is relevant because it helps determine the national saving that finances this capital investment. national saving can be generated privately, by households and business, or by government. efforts to promote private saving certainly have merit in theory, but the bald empirical fact for the united states is that the government has introduced a number of tax provisions to increase private saving over the past twenty years, and almost all of them have been correlated with a reduction in the overall rate of private saving. these measures could have been effective at the margin, but they have not had a large enough effect to counter the general downward trend in private saving. as an added caution, from a standpoint of national saving, it makes no sense to introduce costly private saving incentives that then reduce government saving more than they raise private saving. what has seemed to raise national saving is government fiscal policy, the budget surpluses. government saving, or a surplus, leads to a reduction in outstanding government debt to which wealth - holders, for the most part, seem to respond by devoting the funds to private credit markets. this response, in turn, finances capital investment. much of this capital investment is likely to be in the united states, directly influencing output and productivity. but even if the saving flows abroad, either through the buying back of foreign - owned capital or the purchase of new capital in foreign countries

top - of - the - line professionals continue to work at the nbu to promote the macroeconomic and financial stability of ukraine and the institutional capacity of its central bank. however, it is crucial that their work goes on uninterrupted. it is imperative that the president, government, and political forces finally begin to work effectively with the central bank. after all, the nbu has made tremendous efforts to speed up the development of the economy and financial markets and to advance the welfare of all ukrainians, and can do a lot more if not interfered with. let me focus only on what has been accomplished during my term as governor since march 2018. we have finally curbed inflation. every year, we broke our own records in terms of bringing inflation closer to a level that is optimal for the economy. in 2018, inflation stood at 9. 8 %. in 2019, it was down to 4. 1 %. through its consistent monetary policy, the nbu has 1 / 4 bis central bankers'speeches achieved an inflation target of 5 % ± 1 pp sooner than expected, and inflation has since remained low. our ability to be consistent in maintaining price stability in the face of political cycles was widely recognized by the international community last year, when the nbu received the globalmarkets award. for the first time since ukraine gained independence, the key policy rate has been reduced to 6 %. two years ago, when the parliament appointed me to lead the nbu, the key policy rate stood at 17 %. today the central bank pursues a stimulating monetary policy aimed at reviving economic growth. but we have not stopped there. we have introduced completely new tools to support the economy. those include refinancing loans for banks for up to five years, an interest rate swap for banks, and an fx swap facility with international institutions. we have made single - digit loan rates a reality. yes, it will be some time before low inflation and the low key policy rate have their full impact on the cost of debt. but it will definitely happen. of course, if creditors ’ rights were better protected, it would happen sooner, but this is beyond the nbu ’ s purview. we have strictly adhered to a market - driven, flexible exchange rate regime, while at the same time ensuring that the hryvnia is stable. moreover, we have worked to develop the fx market. as a result, today the exchange rate is set transparently on leading international