A comprehensive analy-tical study and empirical tests of the impact of fiscal and monetary policies, as well as of exchange rate and external factors, upon economic growth and the real exchan-ge rate are conducted, with the use of several methods, as OLS, VAR and the Kalman filtering. The concept of eco-no-mic policy coordination during a switch towards stable economic growth path is ela-bo-ra-ted. The use of institutions is sugfor policy conso-lida-tion. With the use of money-based exchange rate expec-ta-tions, the criteria of economic insta-bility is proposed. The impact of such institu-tio-nal reinforcements, as independent centbank, currency board and social pact, upon GDP growth, the current account and inflation is empirically tested. Policy impli-ca-tions for Ukraine are presented from the perspective of either international compa-risons, or empirical studies.
Key words: balance-of-payments, Latin America, economic growth, rational expectations, real and nominal exchange rates, institutional arrangements, fiscal and monetary policies, transition economy