In this study, we have clarified the cause-and-effect relationships, particularly between GDP and inflation and investment;
for the government to be able to pursue prudent economic policies, to make important strategic decisions it is necessary
to research not only the dynamics of some macroeconomic indicators, proportion or structural changes between them,
but also to conduct their statistical evaluation and relevant empirical studies.
The foreign and domestic writings distinguish a large number of factors that to some extent affect the increasing or decreasing
in economic growth. However, determining the extent effects with multifactor econometric models at the national
level until now has not been conducted.
As for the economy of Ukraine, we found that between inflation and economic growth in the long term (1991-2014)
there was a statistically low inverse relationship (correlation coefficient is -0.36, determination coefficient is 0.13), but using
one year time lag, the relationship is increased significantly (correlation coefficient is -0.6, determination coefficient is
0.36). It shows that the relationship is quite significant and inverse. Accordingly, it can be affirmed that inflation starts to
affect the value of GDP not the same year, when corresponding changes in the value of the consumer price index will take
place, but only the year after.
Using detailed analysis of the trend formulas it was proved that the relationship between inflation and economic
growth in the short term in the conditions of Ukraine's economy transformation has both direct and reverse characteristics.
This can be explained by the fact that in a national economy inflation affected by both monetary and non-monetary factors,
and it doesn’t allows to define the dominance of inflation demand or costs, which, in turn, leads to ambiguous conclusions
about the direction of the relationship between the studied categories.
However, the relationship between inflation and economic growth, which is reflected in the single-factor model, is not
statistically significant (correlation coefficient of 5 to 30, and only the third stage – 38 %) in the long term and short terms.
On the one hand, it shows the existence of a certain connection between the studied categories, but on the other hand it
proves that inflation is not a factor that decisively influences the dynamics of economic growth.
Therefore, further study of inflation impact on the economic growth uses multifactor model, which is based on the concept
of the Keynesian multiplier, which shows an indissoluble connection between the size of social production, investment,
consumption and savings.
For a more detailed analysis and determining the degree of relationship between real economic growth and capital investment
in the economy of Ukraine, the economic and mathematical research was conducted.
Thus, according to the analysis, investments make a very significant impact on the rate of economic growth (correlation
coefficient – 0.88, coefficient of determination – 0.77), which, in turn, is directly related to providing the optimal balance
between accumulation and consumption.
As for impact of inflation on the level of investment in the economy, it was determined that the impact is not caused by
the inflation itself, but economic instability, and higher inflation expectations. Investment depends on such factor as the
expected rate of profit or profitability of investment. Inflation, in turn, has a direct impact on the market value of equity and
real profitability of investments. The obtained results confirmed the inverse relationship between inflation and investment in
the long term, and the coefficient of determination at the level of 53% showed a significant statistical reliability of the resulting
model.

It was studied the existence of the connection between economic growth on the one hand, and investment and inflation – on
the other. Also it was researched dependency of economic growth from the dynamics of investments in fixed assets. Data analysis
showed a direct and close relationship between events, as the absolute value of coefficients is close to 1. It was established that in
the long term, inflation has the opposite effect on the level of investment provided that a two-year lag exists. In such circumstances,
an investor behavior becomes fairly predictable: with inflation expectations investors will reduce capital investment in the
economy.
Key words: multifactor econometric model, inflation, investments, economic growth, correlation coefficient, coefficient
of determination.