The value of GNP depends on two factors: the amount of goods produced and their prices. With insignificant changes in the volume of goods produced (for example, in the direction of its increase), GNP can grow very significantly in price terms due to inflation. Most of this growth will be fictitious.

GNP, expressed in current prices, in economic theory is called "nominal" GNP. As a rule, nominal GNP contains an inflationary moment. To eliminate the effect of inflation, GNP is calculated in prices basic of the year.

The value of final goods produced during the year, expressed in constant prices (prices of the base period), is denoted in economic terms as "real" GNP, i.e. real GNP is GNP adjusted for the price level.

If the value of nominal GNP is taken to the value of real GNP, then we get general price index, which is called the deflator. For example, the nominal GNP of the USA in 1979 amounted to 2508.2 billion dollars. 1982, then the GNP would have amounted to 3192.4 billion dollars. The deflator in this case is 1.32. With the help of a generalized price index, it is possible to move from calculations in current prices to calculations of real production volumes.

Real GNP = ;

An indicator of GNP that reflects current prices, that is, an indicator that is not adjusted for the price level, otherwise called unadjusted, expressed in dollars at the current exchange rate, monetary or nominal GNP. Similarly, GNP adjusted for inflation (i.e. price increases) or deflation (i.e. price decreases) is constant dollar adjusted or real GNP.

The process of adjusting current or nominal GNP for inflation or deflation is simple. GNP deflator for a given year tells us the ratio of the aggregate price of goods in the current year to the aggregate price of a similar set of goods in the base year. Thus, the GNP deflator, or GNP price index, can be used to inflate (increase the dollar value of GNP with price movements) or deflate (decrease the dollar value of GNP with price movements) the nominal GNP.

In developed countries, generalized information about the state of the economy is reflected in the system of national accounts. GNP as the most comprehensive indicator is presented in them in the form of a balance sheet:

It is easy to see that the left side of the balance diagram shows the production of everything that is intended for subsequent use. This is GNP and goods and services received through imports.

The entire volume of GNP and the goods and services received through imports constitute the total income of the economy (or "aggregate supply").

The right side of the balance diagram shows the directions in which the total resources of the economy are used. There are three such directions: 1) consumption; 2) capital investments (investments); 3) foreign trade.

“Consumption” should be understood as the final use of goods and services in order to meet the needs of the population. These include:

a) personal consumption expenses (purchase of food, clothing, durables, etc.);

b) public consumption, including the costs of paying for goods and services necessary for the life of society as a whole (defense, maintenance of public order, education, medical care, management, etc.).

Investments are resources set aside for future consumption. One part of the investment is stocks of consumer goods ("investments to increase stocks"). Another part of them is directed to increase the real capital of society, to expand production (expenditures on new machines, buildings, structures, etc.).

Through foreign trade, part of the goods and services produced in the country is sold abroad, i.e. exported.

So, the balance of GDP can be expressed by the following formula:

GNP + Imports = Consumption + Investments + Exports.

The left side of this equation is "aggregate supply", the right - "aggregate demand".

Aggregate demand is the total expenditure that consumers, businesses, and the government are willing to make to acquire the goods and services they need.

From the GNP balance formula it follows that:

GNP = Consumption + Investment + (Export - Import)

The difference between exports and imports is called foreign trade balance.

As you know, not all produced material goods are consumed in society. Everything that is not consumed is accumulated, saved. Hence, "Savings = GNP - Consumption", or: "Savings = Investments + (Exports - Imports)".

Thus, savings in society are made up of total investment and the balance of foreign trade.

When characterizing the GNP, we did not note, and the indicator itself does not demonstrate this, exactly where it was created, inside the country or abroad. To clarify this, the indicator of gross domestic product (GDP) is used, which is the sum of the value added of all producers of goods and services, called residents.

Residents are citizens residing in the territory of a given country, with the exception of foreigners living in the country for less than 1 year.

If we add to the GDP indicator the difference between the receipts from factors of production (factor income) from abroad and the factor income received by foreign investors in this country, then we can calculate the GNP indicator. So, for example, for a more accurate calculation, the UN Statistical Service recommends using GDP as the main indicator in compiling the system of national accounts. The United States and Japan use GNP. The difference between GNP and GDP is insignificant and fluctuates within ±1% of GDP.

GNP is the total value of the total volume of products and services in both spheres of the national economy, regardless of the location of national enterprises (in the country or abroad).

1. cost calculation method. Represents the summation of the costs of all economic objects associated with the purchase of final goods and services. GNP=C+I=G=X n c-personal will consume household expenses. Expenses of firms related to the purchase of fixed capital, working equipment, as well as expenses associated with housing construction. In addition, the cost of capital associated with the placement (depreciation), expenses from the state-va, expenses from the outside world are taken into account are net exports or the difference between exports and imports.

2. Income calculation method. This is the summation of factor income received by citizens of a given country and 2 elements that are not factor income. GNP \u003d W + P nc + P k (T f + D in + NP k) + R + i + A m + N b R-rent, A m - deductions, N b - taxes, P n - profit enterprises, P-profit of corporations, NP to - undistributed profit corp, T f - corporate income tax, i-interest income, D в - dividends.

3.Production method. Represents the summation of the added value created at each stage of the production of the final product. Value added is the difference between the value of the output produced by the firm and the value of the costs incurred by the firm to convert factors of production and suppliers.

In economic theory and practice, a distinction is made between “nominal” and “real” GNP.

Nominal GNP is the value of output in each year, calculated at the market prices of that year. Calculated by summing the value of output (price times quantity) of all millions of goods and services produced in an economy. The value of nominal GNP can change under the influence of both the dynamics of the physical volume of production and the dynamics of the price level.

Real GNP measures the value of all output at the prices of the base year and is the main indicator of the physical volume of production. When real GNP rises, this indicates that the total output has increased, i.e. more goods and services are produced. Consequently, the dynamics of real GNP more accurately reflects changes in the production of goods and services than does the indicator of nominal GNP.

The ratio of nominal GNP to real GNP shows the increase in GNP due to price increases and is called the deflator.

With the help of the GNP deflator, you can simply compare output over different periods of time. An increase in the GNP price index in a particular year compared to the previous one indicates inflation, a decrease in the price index indicates deflation.

7. Basic macroeconomic schools and trends: sources of controversy.

The table shows how the representations of ek-tov alternated over time over the past 4 centuries. Most of the scientific discussions are connected with the identification of the peculiarities of the functioning of the market economy, i.e. determining how effectively the market mech-we operate, allowing you to achieve the main macroek-kih goals. There are three sources of controversy: 1) the degree of price and wage flexibility, 2) the degree of aggregate supply flexibility, 3) the role of expectations in the process of making eq-their decisions.

The experts of the right bloc believe that prices and the wage rate are flexible, and consequently their fluctuations are able to ensure the balance of aggregate demand and supply. The extreme right ek-you believe that the aggregate supply determines the scoop th demand and, consequently, in the ek-ke only the equilibrium level of unemployment (or the natural level of unemployment) can exist. This approach substantiates the thesis about the need to develop market forces in the market in the absence of state intervention in the market. Modern right-wing economists suggest that aggregate supply is more dependent on the volume and level of productivity of factors of production. They are based on the scientific provisions of the theory of Smith and Hayen, who propose to encourage the development of competitive forces in the eq-ke and limit the role of the state in the national eq-ke.

1) right ek-you assume that over a long period of time there is an absolute elasticity of the wage rate and prices in the direction of their reduction. This thesis is based on the assumption of absolute variability in the use of eq-their resources in the long term. According to the right ek-tam, non-equilibrium unemployment is a temporary phenomenon and can be observed in the short term. In the long run, equilibrium unemployment corresponds to the level of natural unemployment. Natural unemployment includes frictional and structural unemployment. Leftists believe that there is no flexibility in prices and wages in a short period, since the price level is strictly regulated by the contract for the supply of products, and the level of wages is determined by labor contracts, following but the market is not able to automatically change non-equilibrium unemployment, which necessitates state intervention in the economy.

In macroek, a short period is understood as a state of underemployment of resources in the production of goods and services. When the actual level of unemployment exceeds its natural level, i.e. cyclical unemployment may occur. The long-term period is a period of time that, in macroanalysis, is characterized by the full employment of resources (natural unemployment rate Ue) from 6% to 8% of the labor force of the national economy, and the level of production capacity is 80-90% of the total production capacity.

2) right ek-you believe that the total supply (AS) does not respond to changes in the scoop-th demand (AD), i.e. the aggregate supply does not depend on demand, but depends on the volume and level of proizv-nost factors of proizv-va, so the government should influence the proposal to encourage competition, proizv-in and freedom of market forces. This approach can be called supply theory. Left ek-you believe that aggregate demand can influence the scoop-th proposal. For example, an increase in AD leads to an increase in AS and a decrease in the level of unemployment, so the state must provide an effective volume of demand to achieve an optimal level of employment of resources. Theorists of the soviet demand are the Keynesians and their followers. In their opinion, in order to increase employment, it is necessary to increase consumer demand and investment demand. If the volume of demand for households and firms is insufficient, then the state must carry out additional state expenditures to increase the volume of GNP. Next, it is necessary to intervene in the state's accounting in a short period. The disagreements between neoclassicals and neo-Keynesians are caused by different approaches to the analysis of aggregate supply. Monetarists reject state intervention in the eq-ku by influencing the magnitude of aggregate demand. On the other hand, unlike the classics, they allow state intervention in the sphere of monetary circulation. To reduce unemployment, it is necessary to create a condition for a possible reduction in wages, and then they prove that there is a dependence of m / y on the price level and the level of employment. Monetorists believe that an increase in AD can only have a short-term effect on employment growth, since the increase in government spending can be provided by an increase in taxes, which leads to a reduction in demand from the private sector. As a result, the private sector is replaced by the state sector, and private demand by state demand. The total effect in the result will be insignificant or zero. (Fig.)

P is the general price level. AS'-concept of neoclassicals, AS'-concept of neo-Keynesians

3) right ek-you declare that the expectations of agents quickly and adequately adapt to changing conditions, while maintaining the main role of expectations in price changes. This is the position of the new macroeconomic school or representatives of the rational expectation theory. Critics of right-wing e-tov note that the formation of expectations is a complex and ambiguous process, people often make mistakes and their expectation is sometimes inadequate to the changing e-th situation. In the new neoclassicism, the statements of representatives of the neoclassical direction in the field of fiscal and monetary policy are maintained and take into account the position of the theory of monetarists. New Keynesians start from the theory of rational expectations trying to fit in with radical Keynesianism.

8. Main macroeconomic schools and trends: comparative analysis of positions on key macroeconomic issues

The neoclassical school interprets AD based on the formula of the collic theory of money. 1) MV=PY, M-quantity of money, V-speed of turnover of the monetary unit, P-average price level, Y-volume of national production. 2) AD \u003d C + I + G + Xn, C decrease, I decrease, 3) the effect of import prices. Export decreased, followed by AD decreased. (Fig)

P-general price level, Y-real GNP

The formula of the colliche theory of money is actively used by both neoclassicists and monetarists. They believe that the volume of the money supply (M) and M are constant, and the general price level and the volume of the national product are inversely related, so the AD curve is directed to the right and down, i.e. has a negative slope. For Keynesians, the volume of scoop-th demand (AD) depends on the influence of many factors. Volumes of state expenditures, taxes, volume of autonomous expenditures (volumes of autonomous consumption and autonomous investments, in the open system of the volume of autonomous net exports). Keynesians have a different point of view from the neoclassical on fluctuations in demand, they believe that fluctuations in AD are the main cause of changes in the economic situation, and therefore recommend the right to influence the scoop demand mainly by fiscal policy methods. Monetarists interpret the scoop supply curve as well as the Keynesians, and the scoop demand curve as neoclassical. Here are the main features of this school: 1) the supply of money does not have a dominant effect on the general price level, 2) in the short term, money is able to influence real eq-s variables (GNP and employment). Money is the main cause of fluctuations in the level of prices and national income, 3) in the long run, money affects primarily nominal values, while real values ​​are determined in the long run not by monetary, but by real factors (capital reserves, production \u003d resources, the number of employees of us), 4) in the market eq, eq agents and the private sector of eq are characterized by stability. The situation of macroeconomic instability arises as a result of the calculations of the state policy. (rice)

9 . The main macroeconomic schools and directions: the theory of rational expectations.

Households and firms are forced to make multi-period decisions in the face of uncertainty in the future. That. Most decisions require ex-agents to form expectations about the future. Expectations must be formed in the field of price and income levels, and the subject of dispute among the experts is the question of how agents form their expectation. A simple rule for subjects in making decisions would be to act in the next year in the same way as in the previous one. This is the rule of statistical expectations, which can be formalized as follows: Y e t +1 = Y e t , where Y e t +1 is the expected income in the next year, Y e t is the real income in the current year. If the value of the expected income in the current year did not coincide with the real income, then the forecast error can be defined as the difference in the value of the expected income. Ex-th agents taking into account errors in their activities based on past experience will be guided by the rule of adaptive expectations: Y e t +1 = Y e t + g (Yt-Y e t), where Yt is real income, g is the share of forecast error values. If g=0, then the ex-expectations do not change; if g=1, then the expectations become static, i.e. agents project their beliefs to the extent of past errors. Adaptive expectations are connected exclusively with the past and have no connection with the future, therefore, representatives of the theory of rational expectations rejected the theory of adaptive expectations, stating that when making decisions, ex-agents use modeling of probabilistic situations in the future. These theorists proceed from the premise that subjects use exhaustive information, act prospectively and do not commit systematic errors in their activities. Pre-whether theories of rational expectations actively use simplified models that show the dependence of eq-their processes on the action of external factors. Q Dt =a-bPt+Ut, Q=d+cPt+Vt, P e t =P e t (x i), x i - set of pricing factors, P e t - expected price of the product, Q Dt =Qst. In the case of rational expectations, the scoop supply curve, both in the short and long term, is a fixed vertical coinciding with the production line at the natural rate of unemployment. That. the new classics prove that money is neutral for them not only in the short run, but also in the long run; yavl-Xia superneutral.

The new classics take an extreme position regarding the need for state intervention in the economy, rejecting even monetary levers of influence. In their opinion, the real value of GNP may deviate from the equilibrium for 2 reasons: 1) due to the impact of random external factors that cannot be foreseen, 2) as a result of unexpected government measures, and therefore the government must act adequately to changes in the market situation and timely inform ex-their agents.

The main objections of the neoclassicists are: 2) there are doubts about the ability of agents to adequately predict their activities, i.e. keep track of all changes to the eco-th policy. 2) refers to the absolute downward price elasticity. 3) some ek-you believe that shifts in ek-th policy will have a deeper impact on practice. These shifts affect not only the general price level, but also the volume of production. 4) For example, the interests of agents do not always coincide, so the expectations of different social groups may be opposite. 5) in this theory, the time delay is not taken into account, i.e. it is doubtful that the reaction of agents instantly and immediately corresponds to a change in the real situation.

10. AD-AS model: aggregate demand. Price and non-price factors of aggregate demand.

Aggregate demand is the aggregate money demand for elements of real gross national product (GNP) at the corresponding rate of inflation.

Aggregate demand, in contrast to the market demand, is a more complex category and on the scale of society it consists of four components: C + I + G + X n , where

C - consumer demand, I - investment demand,

G - government purchases, X n - net exports

(Rice)

The AD curve illustrates the change in the aggregate level of all spending by households, businesses, governments and abroad, depending on changes in the price level. The nature of this curve suggests that with an increase in the price level, the volume of real output will be less and with a decrease in the price level, the volume of real GNP will be greater. The negative slope of the AD curve is explained by three major effects in a market economy: 1.) the interest rate effect (Keynes effect), 2.) the real wealth effect (Pigou effect), 3.) the effect of import purchases. In the first case, if the price level rises, then with a constant money supply, the interest rate rises. The higher the interest rate, the lower the investment demand, and consumer demand also falls due to the rise in the cost of credit. In the second case, when the prices of goods and services decrease, the real value of money increases, consumers feel that their wealth increases. This encourages them to increase spending as demand increases. In the third case, with an increase in prices for domestic goods, buyers prefer cheaper imported goods. Aggregate demand for domestic goods will decrease.

There are several non-price factors that affect consumer demand:

1.) Changes in consumer spending (consumer wealth, consumer debt, taxes, consumer expectations), 2.) Changes in investment spending (interest rate, investment returns, corporate taxes), 3.) Changes in government spending, 4. ) Changes in spending on net exports.

There are factors that cause the AD curve to shift. Shift to the right: an increase in the money supply, inflationary expectations of the population, an increase in government spending. Shift to the left: higher taxes.

ECONOMIC GROWTH INDICATORS

Economic growth is measured by annual growth rates as a percentage.

There are high, low and zero economic growth rates.

The scale and rate of economic growth are determined by its resources (supply factors):

Natural and energy resources.

2. Labor resources.

3. Production resources of society (equipment, machine tools).

4. Technology

In the process of economic growth, the following structural shifts are observed:

The most rapid development of industries associated with the achievement of scientific and technical progress.

2. Between extractive and manufacturing industries.

3. Accelerated development of the service sector.

27)Business cycle- This the movement of the economy from one crisis to the beginning of another.

Types of cycles (by duration): and

Short (3-4 years)- associated with the restoration of equilibrium in the consumer market.

Medium or industrial (8-12 l.)- associated with a change in demand for equipment due to their wear and tear.

Construction (20 l.) - associated with fluctuations in investment in housing construction.

Long waves (45-60 years) - associated with the transition to new technological paradigms

Cycle phases: and

A crisis- is manifested in the overproduction of goods in comparison with the effective demand for them. Difficulties in the sale of goods causes the need for credit for continuous production. This leads to an increase in the interest rate. As a result, production is reduced, unemployment increases. The excess of supply over demand leads to lower prices. Gradually, at reduced prices, goods are sold.

When supply and demand are approximately balanced, the decline in production stops and the crisis passes into the next phase.

Cycle phases: and

2. Depression- the state of transition from the fall of production to its expansion, when simple reproduction is carried out.

As a result of falling prices and wages, production costs fall and production becomes profitable. The decline in production stops, but it does not grow, but remains at the same level.

The fall in prices is suspended.

Prerequisites are being created for the renewal of fixed capital.

The phase of depression turns into a phase of recovery

Cycle phases: and

3.Revitalization- characterized by a massive renewal of fixed capital. The demand for means of production is growing, there is an incentive to expand production in department I, which leads to an increase in demand for consumer goods, as employment grows and incomes of the population increase.

The volume of production exceeds the level of pre-crisis volume.

The lifting phase begins.

4. Rise- intensive expansion of production, increase in employment. Increasing income and demand for goods leads to an increase in commodity prices. An increase in the demand for labor leads to an increase in wages.

The renewal of fixed capital and the build-up of production capacities continue, which increases the mass of goods produced and prepares for overproduction.

Marketing difficulties begin along the entire technological chain of enterprises.

The economy is in a new crisis.

One business cycle ends, another begins.

Loop types

(according to the depth of the crisis):

A - medium

B - deep

C - shallow and

THE ESSENCE OF THE CRISIS

It is a form of movement and development of a market economy

CAUSES OF THE CRISIS

Reproduction of goods.

2. Aggravation of contradictions between effective demand and supply.

3. The market mechanism itself.

POSITIVE ROLE OF THE CRISIS:

HE RESOLVES AGAINST CONTRADICTIONS AND RESTORES AN IMPAIRED BALANCE

NEGATIVE CONSEQUENCES:

Inactivity of a significant part of the means of production.

Gross national product is the total volume of goods produced and services rendered within the entire national economy. GNP growth positively characterizes the state of the economy and means an increase in production, an influx of investment in the country's economy, an increase in exports, etc. An increase in investment and exports leads to an increased demand for the currency of this country, so the currency becomes more expensive. The "overheated" state of the economy, which occurs as a result of excessive growth in GNP, leads to an increase in inflation. To combat the latter, it is necessary to raise interest rates, which will also increase the demand for the currency and its further appreciation. As with all macroeconomic indicators, there is an optimal level of GNP. This level is a theoretical abstraction, since it depends on many factors, in particular, on the national characteristics of the country's economy. The real volume of GNP shows the potential for a possible movement of the economy to achieve an optimal state,

If the GNP is below the optimal level, then this indicates the weakness of the economy and the incomplete use of available resources, primarily labor. Therefore, it is possible to reduce unemployment by lowering taxes, increasing the money and credit supply, and increasing government spending.
If the GNP is above the optimal level, then there is "overemployment" and the development of inflation - an "overheated" state of the economy. State regulation in this case works in the opposite direction: raising taxes, reducing the money and credit supply, and reducing government spending.

In Keynesian theory, there is the following formula:

GNP = Consumption + Investment + Government Spending + Exports - Imports

Consumption - consumer spending of the population, i.e. the amount of money consumers are willing to spend. Naturally, the ability to spend depends on the level of income and the propensity of the population to save. Incomes and expenditures of consumers do not always coincide: at low incomes, the capital accumulated over the previous period is “eaten away”, at high incomes there is an opportunity for savings.

Investments - that part of the income of the population, which is directed to investments in the economy of the state. In addition to the level of income of the population and the propensity to save, this component of GNP depends on how much of the latter will be directed to investment. Ideally, the maximum value of this parameter exactly coincides with the amount of savings of the population, when all savings are accumulated by financial institutions and then invested in the country's economy.

Government spending - includes the expenditure part of the state budget. Their impact on GNP must be considered from a qualitative rather than a quantitative point of view. Indeed, the placement of government orders at enterprises has a stimulating effect on the economy, and an increase in government spending due to high pay for the swollen bureaucracy is a “eating up” of the national income.

The formula shows that an increase in consumer spending, investment, government spending and exports leads to an increase in GNP. An increase in investment and government spending has a multiplier effect on this growth. Moreover, the multiplier effect is stronger than the propensity to consume (spending) is higher than the propensity to save.

Note the interconnectedness of the terms of this formula. For example, an increase in government spending is possible through an increase in taxes, and this, in turn, will reduce consumer spending. Thus, an analysis of the growth or decrease in GNP needs to be carried out taking into account many interrelated indicators: unemployment, household income, inflation, consumption of retail and durable goods, consumption of services, budget deficit, trade balance, etc.

In civilized countries, the GNP growth rate equal to 2-5% per year is considered normal. Exceeding this figure is a great achievement of the government's economic policy.

Content

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Topic 37. GROSS NATIONAL PRODUCT AND METHODS OF ITS MEASUREMENT

1. GNP as a general indicator of the country's development.

2. Expenditure method for calculating GNP.

3. Income method for calculating GNP.

4. The concept of value added.

1. GNP as a general indicator of the country's development.Gross national product- the market value of all final goods, services produced and used in the country for the year.

The modification of the gross national product (GNP) is the indicator of gross domestic product (GDP): if the GNP indicator takes into account the activities of the country's citizens not only on its territory, but also abroad, then the gross domestic product - all people in the country, regardless of citizenship. For most developed countries, the differences between GNP and GDP are insignificant and do not exceed 2–3%, and the dynamics of indicators is unidirectional, which makes it possible to identify them for simplicity.

An analysis of the dynamics of GNP over the years makes it possible to characterize the economic development of a country, and its calculation per capita is the best indicator for cross-country comparisons of living standards. To ensure that the nature of economic development in the long run is not distorted under the influence of price changes, indicators of nominal and real GNP are used. Nominal GNP is calculated at current market prices, while real GNP is calculated at constant, comparable prices that take into account the price index.

The change in the prices of final goods and services included in the GNP makes it possible to take into account a special index - deflator of the gross national product.

2. Expenditure method for calculating GNP. The circular macroeconomic model of the circulation of resources shows the counter movement of the costs of production of firms and incomes of the population, and the main macroeconomic identity (at= With+ I+ G+ X) determines their equilibrium state. In this case, the left side of the identity (y)- this is the total amount of income in society received from the production and sale of products on the market, i.e. GNP. The right side of the identity (WITH+ I+ G+ X)- expenses incurred in the production of GNP. Therefore, the calculation of the produced GNP by the expenditure method is carried out according to the formula:

GNP \u003d C + I + G + X,(37.3)

where With- consumer spending; I– investment costs; G- government spending; X - export.

When calculating GNP by the expenditure method from the composition of public expenditures (G) transfer payments to the population - pensions, allowances, etc. - should be excluded, since they are not payments by the state for the current production of goods and services. Despite the fact that transfers increase household income, they do not affect the production of GNP.

3. Income method for calculating GNP. The reverse way to calculate the GNP value is called income method. It is based on the calculation indicator of national income(ND).

national income- this is the sum of all incomes of the population received for the provision of the factors of production available to them.

A comparison of GNP and NI shows that the second of them is much less than the first, since not all goods reach the final consumption of the population: interest in the state economy remains unaccounted for. If we add to the ND, in addition to the direct taxation taken into account in the ND, also the indirect taxation of market agents by the state, carried out by them for more sustainable provision of their own needs (value added tax, sales tax, etc.), then we can calculate net national product, which takes into account not only the factor incomes of the population, but also the state:

NNP \u003d ND + T, (37.4)

where NNP is the net national product; ND - national income; T - indirect taxes.

To the net national product, in turn, one should add that part of the value of the product that neither the population nor the state gets, but remains at the disposal of firms and is directed to reimburse the capital goods consumed in the production process, i.e. depreciation deductions (A) . Then.

NNP + A = GNP. (37.5)

Given the above two adjustments, the income method of calculating GNP coincides with the expenditure method:

GNP = ND + T + A. (37.6)

When calculating GNP by any method, income from the resale of previously produced goods and transactions with securities is excluded from its circle, since they are not of a productive nature.

4. The concept of value added. When measuring GNP, avoid double counting, i.e. multiple accounting of the same products. Double counting can be avoided if only the value that firms add to a product is taken into account in GNP.

Added value is defined as the difference between the firm's sales and the value of factors of production acquired from outside. Then everything else will be intermediate product- a set of goods produced during the year that were used for further processing.

If we add all the value added by firms during the year together, we can also determine the size of GNP. This method is called production.

Topic 38. NATIONAL INCOME

1. The concept of national income.national income- is the total income from the use during the year in the economy of all factors of production. It is expressed as the amount of monetary income received by the population for participation in the economic life of society.

The purpose of the national income (ND) is to form a consumption fund for the population and an accumulation fund for expanding production, therefore, on the one hand, it characterizes the level of well-being of the population at the present time, and on the other hand, the possibility of economic growth in the future.

The indicator of national income is the leading element of the system of national accounts, which tracks its distribution not only in the household, but also among joint-stock companies, government agencies, financial institutions and private non-profit organizations.

2. Factor composition of the national income. When determining the amount of ND, four elements of factor income are distinguished:

1) wage- wages of employees and employees with social charges (insurance payments for an employee, social security, payments from private pension funds);

2) rental income- rent for land, housing, premises, equipment, property;

3) interest income- a positive result of operations in the securities market and income from individual investments in the business;

4) profit- income of the unincorporated sector of the economy (sole proprietorships, partners, cooperatives, etc.) and corporations, the profit of which, due to its breakdown into dividends and the undistributed part used to expand production, is taxed twice - as the income of the company and as the income of the shareholder.

Topic 39. DISPOSSIBLE PERSONAL INCOME

1. Personal income of the population. If national income is, in essence, earned income, then personal income is received. They differ from each other for two reasons.

On the one hand, part of the income earned by labor is segregated in the form of: a) social insurance contributions made by the entrepreneur and the employee himself, and b) income taxes, both in terms of dividends and undistributed. As a result, these incomes do not reach households, settling in state structures.

On the other hand, part of the income received by households is not their labor income, but a transfer payment from the state in the form of social insurance benefits, unemployment, as well as pensions, various subsidies and interest payments on government securities.

LD = ND – R -Tr + P, (39.1)

where LD is the personal income of the population; ND - national income; R– social security contributions; Tr- taxes on corporate income; P - transfer payments to the population.

2. Disposable income. The income at the personal disposal of the population (disposable income) is even less than personal income, since it involves the preliminary payment of individual taxes:

a) income tax;

b) property tax;

c) inheritance tax.

Absolutely predominant among them is the income tax. Disposable income is the final income, cleared of all obligatory national welfare payments, distributed for consumption and savings.

Topic 40. PRICE INDICES

1. Price characteristic.Price- the cost of a unit of goods, expressed in money. All goods and services included in the market turnover have prices that are set under the influence of the market mechanism of supply and demand.

There are various classifications of prices depending on the criteria for their evaluation. For example, according to the volume of sales and type of goods, wholesale, retail prices and tariffs (rates), and according to the degree of freedom of formation - firm (fixed), regulated and market.

The values ​​of prices, their rise and fall, affect everyone in a market economy, affect the standard of living, so it is important to track their dynamics. This is done through macroeconomic indicator of the general price level, which is calculated as a monetary value of goods produced in society. The general price level in different periods of time is not the same, so its change is fixed using price index.

2. Consumer basket. State statistical bodies keep records of changes in the price level with the help of a whole system of index indicators. In particular, the indices differ in terms of the coverage of the goods included in the set, i.e., the comparable “basket” against which prices are compared. Exist:

a) consumer price index(CPI), which takes into account the change in the consumption of basic goods and services by the average family. Typically, the consumer "basket" contains 300-400 goods most commonly used in everyday life;

b) producer price index, calculated on a "basket" of over 3,000 industrial products. This index is more dynamic than the CPI, as it is more sensitive to scientific and technological progress;

in) GNP deflator represents the most general of the listed price indices, since it assumes all final goods and services as a “basket”.

Topic 41. UNEMPLOYMENT AND ITS FORMS

1. Types of unemployment.

2. Natural rate of unemployment.

3. Rate of unemployment.

4. Socio-economic consequences of unemployment.

5. Fight against cyclical unemployment.

1. Types of unemployment. A significant part of the able-bodied population is outside the market - this is the unemployed population, consisting of the unemployed and the unemployed.

Unemployment- an economic situation in which part of the able-bodied population cannot find work.

Non-working able-bodied population- part of the adult population that is economically inactive and does not want to work for hire. It includes: housewives, students, freelancers, religious ministers, prisoners, etc.

It is impossible to employ the entire able-bodied population (unless, of course, society is organized along the lines of a labor camp or barracks communism).

Unemployment comes in various forms. The main ones are:

1. Frictional (voluntary) unemployment. It is a temporary absence of work in connection with the transition to another job of their own free will, as well as the period of job search by persons who are looking for it for the first time.

2. Structural. It arises as a result of a discrepancy between the structure of labor demand and labor supply.

Its composition includes:

- persons with a formal level of qualification (lack of work experience in the presence of a diploma);

- specialists whose professional skills are inferior to others in the market or are not in demand as a result of technical and social changes (for example, a teacher of Marxism at a university);

– employees whose abilities are discriminated against by employers (for example, women, people who combine work with education).

3. Cyclical (opportunistic) unemployment. Represents unemployment in the context of a decline in production, when the number of applicants for jobs significantly exceeds their availability. With cyclical unemployment, there is a general contraction of economic activity in the country, so advanced training or retraining does not save people from unemployment. Since the cyclical development of the economy involves alternating recessions and upswings, then during the rise it is significantly reduced and may come to naught.

Cyclical unemployment, along with structural unemployment, is a form involuntary (forced) unemployment.

2. Natural rate of unemployment. In conditions where there is no cyclical unemployment, the economy is in a state of full employment, since frictional and structural unemployment are natural and inevitable in a market economy. Introduced into scientific circulation by M. Friedman natural rate of unemployment is influenced by:

– demographic;

– infrastructural;

- the level of minimum wages and social benefits.

3. Rate of unemployment. There are many different indicators that characterize unemployment. The most common indicator is unemployment rate, proposed by the International Labor Organization (ILO):

Comparison of unemployment in different countries makes it possible to compare the standard of living of the population of the compared states.

4. Socio-economic consequences of unemployment. Cyclical unemployment has an extremely negative impact on the market economy.

There are huge losses in society due to the underutilization of the labor force. The American economist Arthur Oken (1928–1980) developed a method that allows them to be estimated: for this, it is necessary to compare GNP in terms of actual and full employment:

where yF- the volume of GNP in terms of employment; at- the actual volume of GNP; UV- Unemployment rates in conditions of full employment (natural rate of unemployment); And- the actual rate of unemployment; ?– Okun coefficient ( about 2.5).

In accordance with Okun's law, the excess of cyclical unemployment over natural by 1% leads to a decrease in the actual level of GNP by 2.5% compared to potential.

The budgetary burden on smoothing the consequences of unemployment is increasing: the payment of benefits, the opening and maintenance of employment centers, the social rehabilitation of the unemployed, the creation of new jobs at the expense of the state, the reorientation in tax policy, the strengthening of property protection, the protection of the law, etc.

Family ties are weakening, marriages are breaking up due to the inability of the head of the family to ensure its worthy existence. The unemployed are degrading; they fall out of their usual social circle, lose their qualifications and work skills.

Crime, drug addiction are growing, social values ​​are depreciating.

5. Fight against cyclical unemployment. The governments of developed countries recognize their responsibility for involuntary mass unemployment, especially cyclical unemployment, therefore, they apply various measures to neutralize its negative consequences:

- finance the development and implementation of economic programs to stimulate the growth of employment and increase the number of jobs in the public sector;

- pay at the state expense at labor exchanges both the professional initial training of workers and advanced training;

– provide assistance to people affected by forced unemployment (payment of unemployment benefits).

Topic 42. INFLATION AND ITS TYPES

1. The concept of inflation and its forms. Inflation as an economic phenomenon is due to the existence of paper money.

Inflation- excessive overflow of money circulation channels with paper money in excess of the needs of trade, leading to the depreciation of money, rising prices, and deterioration in the quality of manufactured goods.

Inflation manifests itself primarily in the price level, it can be fixed through the inflation index:

With a certain degree of conditionality, the following forms of inflation can be distinguished according to the rate of flow:

1. Inflationary economy background- is characterized by a slight, within a few percent, price increases during the year and is associated with market fluctuations, the activity of entrepreneurs in the market, seeking to maximize their profits. This level of inflation does not pose a threat to the market economy and, if necessary, can be easily eliminated with the help of government measures.

2. Inflation in the range of two to three tens of percent- is the first symptom in the disorder of the money economy. She is usually called "creeping" (regulated) inflation. In general, under these conditions, the country's economy can develop freely.

3. Galloping (rapid) inflation- testifies not only to the disorder of monetary circulation, but also to serious violations in the monetary sphere. Galloping inflation is measured by one to two hundred percent per year. In general, in conditions of rapid inflation, the development of the country's economy is difficult, although possible.

4. Hyperinflation characterized by an astronomical increase in prices - from several hundred percent per year and above. Hyperinflation has no upper limit: there is a known case of annual price growth rates of 3.8x1027 (Hungary, August 1945 - July 1946). The main sign of hyperinflation is the "leaving" of the population from money, the transition to "commodity" money - alternative values. In conditions of hyperinflation, the development of production is impossible.

The American economist Philip Kagan introduced a formal criterion for hyperinflation: to consider it as the beginning of the month during which prices first rose by more than 50%, and as the end - the month in which prices do not reach this value plus one more year.

The listed forms of inflation are varieties open inflation. Its alternative is hidden, suppressed inflation. In the context of a strict government policy that sets fixed, unchanged prices, inflation manifests itself only in the depreciation of money, which finds expression in the emergence of chronic shortages and constant queues for goods.

In the modern economy, inflationary processes are superimposed on the cyclical nature of business activity, and if inflation develops against the backdrop of an economic downturn, it is commonly called stagflation and if, against the background of increased taxation (the reaction of the state to the depreciation of money) - tax inflation.

If the rate of inflation in a country slows down, then this process is called disinflation. Moreover, inflation may stop altogether, and it will be replaced by the reverse process of a general decline in prices - deflation. The deflationary mechanism ultimately leads to the same results as inflation - it deforms all economic ties in the economy.

2. Supply and demand inflation. In modern Western economic theory, all manifestations of inflation are reduced to factors on the buyer's side (demand inflation) and factors on the seller's side (cost-push inflation).

Demand inflation- an imbalance between supply and demand on the demand side. Its main reasons:

– expansion of state orders (military and social);

- an increase in demand for means of production with a full load of the enterprise and full employment;

- an increase in the purchasing power of the population due to wage increases.

Here, excess demand encounters limited supply, which does not keep pace with demand, and there is a general rise in commodity prices, i.e. inflation.

cost inflation- an imbalance between supply and demand on the supply side.

Main reasons:

– oligopolistic pricing practice;

– economic and financial policy of the state;

- an increase in prices for factors of production.

The mechanism of inflation on the part of producers is a mirror reflection of demand inflation.

Inflationary expectations of the population can lead to the fact that supply and demand inflation will begin to combine with each other and arise inflation spiral(Fig. 42.1).

Rice. 42.1. inflationary spiral

a) initiated by demand-pull inflation; b) inflation-driven supply;

R– general price level; at– volume of national production;

AD, AD I , AD II - aggregate demand; AS, AS I , AS II - total supply.

3. Socio-economic consequences of inflation. The consequences of inflation are complex and controversial. A little inflation is even good for the economy, as it revives business activity. But gradually, everyone - from consumers in the market and up to the state - is affected by the critical point of inflation, when its overall positive effect becomes negative.

Rapid, galloping inflation is already introducing an element of disorganization into the economy, reinforcing disproportions through uneven price growth, distorting supply and demand, and leading to overproduction of some goods and underproduction of others. As a result, consumers begin to protect themselves from inflation by getting rid of depreciating money.

The business sector cannot develop a strategy for its behavior in the market under these conditions. Banks, insurance companies, pension funds and investment companies, being the main creditors of the business sector, also suffer losses. The government, faced with discord in the monetary sphere, receives taxes in depreciated money.

In addition to negative economic inflation, it also generates social consequences:

a) is a kind of supertax on all segments of the population, from which no one can protect themselves;

b) worsens the financial situation of wage laborers, since real wages lag behind nominal wages, which, in turn, lag behind the sharply rising prices for goods and services;

c) is a channel for the redistribution of national income from one group of the population to another, while the unconditional losers are the recipients of fixed incomes: state employees, pensioners, rentiers, students;

d) harms people of creative, free professions, devaluing their large, but irregular one-time incomes;

e) undermines the employment of the population.

4. Phillips curve. The relationship between inflation and unemployment can be illustrated using the A.U. Phillips (1914-1975), professor at the London School of Economics, who proposed it in 1958. After analyzing the British economy for a hundred years (1861-1956), Phillips constructed a curve showing the inverse relationship between the change in the wage rate and the p unemployment rate.

Since the market prices of wages are behind the growth of wages, there are market prices for the goods on which it is spent, the American economists P. Samuelson and R. Solow subsequently transformed the theoretical Phillips curve, replacing wage rates with the growth rate of commodity prices, i.e. inflation (Fig. 42.2).

Rice. 42.2.

Modified Phillips Curve

In this form, the chart is often used to formulate macroeconomic policy. If the government considers the current level of unemployment in the country to be excessively high, then it takes measures of fiscal and financial-credit policy to stimulate demand. Their result is the expansion of production, the creation of new jobs, i.e. the movement of the economy from point to U2P2 If the economy at this point demonstrates excessive activity (overheating), then opposite measures will come into effect - credit restrictions and government spending cuts, causing the economy to move out of U2P2 in U3P3.

5. Anti-inflationary policy. The anti-inflationary policy of the state can be carried out using the methods of active and adaptive policy. Active policy carried out in order to eliminate the causes of inflation, and adaptive– to adapt the economy to it and mitigate its negative consequences.

An active anti-inflationary policy involves the use of the method shock therapy, under which, in a short period of time, the causes of inflation on both the demand and supply side are destroyed, and which consists in the following:

a) cut government spending

b) taxes go up

c) a deficit-free budget is formed;

d) a tight monetary policy is pursued;

e) wage growth is restrained;

f) developing market infrastructure;

g) a fixed exchange rate is introduced;

h) the competitive principles of the economy are strengthened through the fight against monopolies.

These measures lead to a sharp decrease in both inflation itself and inflationary expectations of the population, which creates conditions for sustainable economic growth. At the same time, shock therapy leads to a significant decline in production and an increase in unemployment, greatly lowers the standard of living of the population and leads to an increase in social tension in society.

Adaptive policy involves the use of a method of gradually reducing inflation - graduation. Gradual reduction of excess money supply in circulation allows avoiding a shock in the sphere of employment and production, as well as excessive social tension in society, however, it does not deceive the inflationary expectations of the population, which are fueled by periodic indexation of incomes of the population. These indexations are considered as a protection against the current level of inflation, but at the same time they are the reason for its increase in the future.

The government is not free to choose its policy, since some of its forms affect the interests of population groups and sectors of the economy to varying degrees.

Thus, it is not possible to determine in advance the most effective way to combat inflation: everything depends on the specific conditions prevailing in the national economy and the opportunities available to the government.

Topic 43. CYCLE OF ECONOMIC DEVELOPMENT

1. The concept of cyclicity.

The real economy is characterized by underemployment, price fluctuations, which leads to periodic ups and downs in the gross national product (GNP).

Rice. 43.1. Varieties of economic growth.

R is a constant rate of economic growth; R1 – decelerating growth rate; R2 – accelerating growth rate; R3 – fluctuating growth rate; GNP - gross national income.

Economic growth, that is, the progressive development of the national economy, as a whole can take place not only through constant or uneven growth, but also through fluctuations, the latter path being absolutely predominant.

Fluctuations in the dynamics of economic growth are not random, spontaneous, but, in fact, are an expression of the movement of the economy from one stable state to another, i.e., a manifestation of the market self-regulation mechanism. At the same time, they can be combined into a serial chain - cycle.

Business cycle- These are ups and downs in the economic activity of people that repeat over a long period, having a general tendency towards economic growth.

The economic cycle can be expressed in graphical models of two- or four-phase fluctuations in the economic environment (Fig. 43.2):

Rice. 43.2.Business cycle

a) two-phase model: 1 – compression phase; 2 - expansion phase; b) four-phase model: 1 - crisis phase; 2 - phase of depression; 3 - phase of revivals; 4 - lifting phase.

Economic science has accumulated many explanations for the causes of cyclicality in the economy (see table).

Table

A comparison of different points of view on the causes of cyclicity shows that it manifests itself as external (exogenous) factors, So and internal (endogenous). In modern conditions, it is generally accepted that external factors give the initial impulse to cyclicity, and internal ones transform them into phase oscillations. The reason for the repeated repetition of fluctuations, that is, the formation of the cycle itself, is the mechanism of action of the multiplier - the investment accelerator, which ensures the turn of economic dynamics from expansion to contraction, and vice versa. At the same time, the impact of the investment accelerator multiplier on the cycle can determine its type (Fig. 43.3):

Rice. 43.3.Types of cycles by the nature of oscillations

a) fading cycle; b) an expanding cycle; c) explosive cycle;

d) uniform cycle.

2. Cycles of Kitchin, Juglar, Kondratiev. In modern economic science, about 1400 different types of cyclicity have been developed with a duration of action from 1-2 days to 1000 years.

The most commonly used of them are:

1. Cycles of J. Kitchin– short-term (small) market cycles of 3–4 years. They are usually associated with the disruption and restoration of equilibrium in the commodity market due to periodic mass renewal of the product range;

2. Cycles by K. Juglar- medium-term (industrial, business, business) economic cycles lasting about 10 years. It is during this period of time that the fixed capital functions in production on average. The change of depreciated fixed capital in the economy goes on continuously, but not at all evenly, since it is under the decisive influence of scientific and technological progress. This process is combined with the flow of investment, which in turn depends on inflation and employment.

3. Cycles of N. Kondratiev- long-wave (large) cycles covering approximately 50 years. Their existence is connected with the need to change the basic infrastructure of the market economy: bridges, roads, buildings and structures that serve an average of 40–60 years.

3. State regulation of the cycle. The policy of state regulation of the economic cycle comes down to counteracting the phases of the cycle: during the period of economic contraction, the government stimulates business activity by reducing taxes, providing investment incentives, reducing the interest rate on loans, and during the period of expansion, on the contrary, it seeks to restrain economic growth. To this end, the government increases tax rates, reduces public spending, pursues a policy of "expensive" money, tightening credit conditions and increasing the required reserves of commercial banks.

It might seem that the government should maximize the expansion phase and minimize the contraction phase. However, this cannot be done, since at the inflection points of the cycle, the multiplier-accelerator mechanism operates, which, like a pendulum, multiplies and accelerates the opposite phase. As a result, the state policy in relation to the economic cycle is a counteraction to it, its smoothing (Fig. 43.4).

Rice. 43.4.Business cycle smoothing policy

In addition to fiscal and monetary measures to influence the economic cycle, the government also uses general health-improving measures: it fights inflation, monopoly, corruption, pursues a policy of eliminating imbalances, etc.

Topic 44. MACROECONOMIC EQUILIBRIUM IN THE NATIONAL ECONOMY

1. Content and conditions of general macroeconomic equilibrium. The many different types of markets that exist in the economy are intertwined in a complex national market system, where changes in one market entail numerous and significant changes in others. The national market economy as a whole, like partial markets, is characterized by a general equilibrium.

General Economic Equilibrium (CEE)- a stable state of the economy, in which: 1) consumers maximize the value of the utility function; 2) producers maximize their profits; 3) market prices ensure the equality of supply and demand; 4) resources in society are divided efficiently.

The self-regulation mechanism is at the heart of the ERA. The macroeconomic balance of the entire national economy makes it possible to maintain:

– dynamic sustainable growth of national production;

– a stable price level based on free market pricing and inflation control;

- high level of employment;

is the equilibrium trade balance of the country.

2. Theoretical views on the balance in the national economy. For the first time, A. Smith drew attention to the possibility of OER in the economy in the middle of the 18th century, suggesting an “invisible hand of providence”, which directs the selfish actions of people towards the common good. The followers of A. Smith (the neoclassical school) proceed from automatism in the formation of the OER, since the supply of goods, in their opinion, creates demand: after all, no one will produce goods and bring them to the market if no one buys them there. Therefore, the OER is observed at.

AS=AD,(44.1)

where AS- total supply AD- aggregate demand.

The mechanism for the transition from the macroeconomic level of equilibrium to the MER within the framework of this concept was developed by L. Walras (see question 33). General economic equilibrium according to L. Walras:

where m- a list of benefits; n- a list of factors spent on the production of goods; xn- the amount of goods produced; p1...pn- the prices of goods produced; y1...yn– prices of sold factors; y1...yn- sold and consumed factors.

It follows from the formula that the total supply of final products in monetary terms should be equal to the total demand for them in the form of the sum of incomes received by their owners.

D.M. Keynes, based on the experience of the Great Depression of the 30s. XX century, substantiated the impossibility of achieving OER without state intervention in the economy. He also proved that the balance between AD and AS is derived from the balance of investment and savings in the economy. Therefore, according to D.M. Keynes? OER is observed at.

S=I(44.3)

where S– general savings of the population; I- general investment in the economy.

3. Simulation of equilibrium. Like many other economic processes occurring in a market economy, in modern economic theory there is no unity of views regarding the MER. However, they can be reduced to two positions: a) the classical approach and b) the Keynesian approach.

Each of the above concepts has its own model of the OER. The classical model of the OER assumes:

a) the economy of perfect competition;

b) complete self-regulation of the market;

c) money as a unit of account;

d) full employment of the population and full utilization of production capacities;

e) the result of production is the production function for only one single factor - labor.

According to this model, the formation of the NER will occur as follows (Fig. 44.1):

Rice. 44.1.The classical model of the OER

ND- the demand for labor; NS- labor supply.

In quadrant III, an equilibrium is formed in the labor market, where the wage rate is set (W1) and number of employees (N1).

In quadrant IV, by projecting the equilibrium value of employed (N1) on the production possibilities curve y(N) we obtain the equilibrium volume of the national product.

In quadrant I, the equilibrium volume of the national product assumes the equality of aggregate supply with demand. Aggregate supply is represented by a vertical line AS, since in conditions of full employment, production is maximally loaded and cannot be increased. intersection AS and AD gives not only the equilibrium output y, but also the equilibrium price (P1).

In quadrant II, the equilibrium price of labor is set aside, which, like the price of goods in quadrant I, depends on the amount of money in circulation, i.e. MV= P.Q. If the money supply rises, then the equilibrium will not be disturbed, but will only move to a higher price level. This is precisely what the shifts of the curves show. AD to AD? and W to W? quadrants I and II.

On the whole, the classical model, with the simultaneous equilibrium state of the markets for factors of production, money and goods, shows the possibility of achieving the IER.

Keynesians, defining the GER, proceed from judgments different from the classical school:

a) the economy lacks price flexibility and complete self-regulation, which necessitates state intervention (indirectly, through economic policy);

b) it is not supply that determines demand, but vice versa. Therefore, the starting point is not the labor market (quadrant III), but the goods market (quadrant I);

c) the money market is not separated from other markets, and prices are not nominal values, but an important factor in the formation of the IER.

Topic 45. Aggregate demand and aggregate supply

1. Aggregate demand and its composition. Aggregate demand is the volume of national production that the state, consumers and entrepreneurs are willing to buy on the market:

AD=C + I + G + X,(45.1)

where AD- aggregate demand; With- consumer; I– investment costs; G- government spending; X- net exports.

The dependence of aggregate demand on the price level can be R express graphically (Fig. 45.1).

45.1 Aggregate demand curve

The price factor affecting aggregate demand is split into three effects:

1. Interest rate effect (Keynes effect).

An increase in the general price level (P) leads to an increase in the interest rate (%), which reduces the purchasing power (purchases) and reduces the investment activity of entrepreneurs (I). As a result, aggregate demand decreases. (AD).

2. Wealth effect (cash balances)

An increase in the general price level (P) causes a decrease in the real value of the population's financial assets (cash balances) (I), which in turn makes people less wealthy (R) and their market demand naturally decreases (AD);

3. Effect of import purchases (of goods)

An increase in the general price level (P) causes a decrease in demand for domestic goods (ADx) and makes imports attractive, which replace them in consumption. (ADE).

All price factors (AD) traditionally affect its movement along the aggregate demand curve, and non-price- shift it in the coordinate system to the right or left.

Non-price factors include the factors indicated in formula 45.1.

2. Aggregate offer and its elements. Aggregate supply- the volume of national production that entrepreneurs can produce and offer for sale on the market.

Addiction AS(aggregate supply) from the price level is described by the aggregate supply curve (Fig. 45.2).

Rice. 45.2. Aggregate supply curve

AS- total supply.

Aggregate supply curve AS conditionally consists of three sections:

I - horizontal - production grows at a low constant price level;

II - ascending - an increase in production volumes is taking place against the backdrop of rising prices;

III - vertical - the economy reaches the highest point of its production possibilities.

Supporters of the neoclassical and Keynesian approaches to economics estimate the curve differently AS in a short period: Keynesians believe that it is represented by section I, and neoclassical - by section II. The difference between their views lies in the unequal interpretation of the behavior of sellers and buyers in the market. Neoclassicists, as is known, proceed from price flexibility and complete rationality in the behavior of market agents (homo economicus), while the latter deny this.

Essentially, the kind of curve AS in the short term depends on the behavior of economic entities and market conditions, i.e., a number of non-price factors.

Among the main non-price factors of aggregate supply are:

– the level of production technology in the country;

- overall labor productivity;

– changes in business conditions;

- the nature of the use of resources (extensive, intensive), etc.

If, under the influence of the price factor, aggregate supply slides along the curve AS, then a change in non-price factors leads to its shift.

In the long run, proponents of both opposing economic theories agree on one thing: the AS curve becomes vertical, for, in the long run, an increase in commodity prices is always followed by an increase in wages, and an increase in profits is followed by an increase in costs. Under these conditions, the volume of supply is limited by the technical possibilities of production and cannot be increased arbitrarily.

3. Graphical interpretation of the interaction of aggregate demand and supply. Aggregate supply and demand meet in the goods market, forming an equilibrium situation: AD = AS. In its most general form, the AD curve intersects AS in section II, forming the equilibrium national output (GNP) and the equilibrium price PE.

This situation is described by a graph (Fig. 45.3).

Different views on the AS curve in the short period lead neoclassical and Keynesian economists to the opposite assessment of macroeconomic equilibrium in the goods market.

Rice. 45.3.Equilibrium in the goods market

Representatives of the neoclassical school believe that in conditions of flexibility in prices, wages, and interest rates, they are able to grow and contract under the influence of supply and demand. As a result, a decrease AD does not lead to a reduction in the volume of national production, but only R 4 changes prices. From here it is concluded that free pricing is capable of itself, without any state intervention, to establish a balance in the market for goods (Fig. 45.4).

Rice. 45.4.Neoclassical interpretation of equilibrium in the goods market

HER 1 - balance points.

Representatives of the Keynesian school do not recognize such an assessment of equilibrium and offer their own: the aggregate supply of AS only in the long run has a vertical form, and in the short period it takes on a horizontal one: there are always unused resources in the economy (including unemployment), and prices and wages are not flexible , since they are fixed in contracts for the supply of products, purchased raw materials and equipment, labor agreements concluded with employees for a long period (months and years), etc.

A reduction in aggregate demand AD leads to a reduction in national production (GNP), therefore, in order to prevent a recession or even a crisis in the economy, government intervention is necessary to maintain a sufficient level of aggregate demand AD (Fig. 45.5).

Rice. 45.5. Keynesian interpretation of equilibrium in the goods market.

Topic 46. STABILIZATION POLICY

1. Goals and methods of conducting the stabilization policy.Stabilization policy- a system of government measures implemented to ensure sustainable economic development of the country.

Accordingly, both active and passive stabilization policies are being developed.

Active stabilization policy It is based on the principle of "fine" tuning of the economy and is expressed in the policy of counteraction: stimulating the economy during a period of depression and slowing down its growth during an overheating period - a "boom". For this purpose, both monetary and tax leverage are used.

Passive stabilization policy is built on the principle of "do no harm" and is expressed in the policy of adjusting ongoing processes.

Both types of stabilization policy have the right to be implemented: in the vicinity of the inflection points of the economic cycle, it is advisable to use mainly an active policy, and in the intervals - a passive one. The duration of the cycle depends on the timeliness of state statistical bodies recording changes in the economy and the political authorities' awareness of the need to take appropriate measures.

2. Stabilization policy lags. Monetary and fiscal policy has an impact on the development of the economy after a certain period of time, and the stabilization policy takes place in two stages:

1) the stage of realizing the need to take measures in relation to the economy. Such a period of time is called internal lag of stabilization policy;

2) the stage of implementation of the decisions made. The period of time between the adoption of stabilization policy measures and the receipt of the first results is commonly called external lag.

The period of time covering the internal and external lags of the stabilization policy is commonly called decision lag(see fig. 46.1).

Rice. 46.1.Stabilization Policy Decision Lag

Time lags that exist in the stabilization policy reduce its effectiveness. However, they are opposed by automatic built-in stabilizers, which allow slowing down or stimulating the economic development of the country without special active measures to change economic policy. The built-in stabilizers of the economy are:

1. The system of taxes on personal income of the population. During an economic recession, as incomes of citizens and firms decrease, taxes are automatically reduced without special legislative acts, and during a “boom”, inflation pushes incomes up, and they are automatically taxed at a higher rate.

2. Government spending on social insurance. During the economic downturn, a large number of people turn to the state for unemployment assistance and social support. The development of inflation leads to the same results, as more and more people fall below the poverty line and can legally claim assistance from the state. During periods of recovery, these processes weaken, which automatically leads to a reduction in government spending.

The use of built-in automatic market regulators makes it possible to avoid a number of mistakes when pursuing an active stabilization policy by the state.

Topic 47. CONSUMPTION AND SAVINGS

1. Motives for the use of income by the population.

2. Relationship between savings and consumption.

3. Marginal propensity to consume and save.

1. Motives for the use of income by the population. All product created in society is intended for consumption. Consumption- individual and joint use of goods, aimed at meeting the material and spiritual needs of people.

Population consumption- the leading indicator of economic development, since it accounts for more than half of the gross national product, and consumer spending- an important predictive indicator of future development, characterizing the mood of people, their consumer expectations.

2. Relationship between savings and consumption. Consumption is closely related to savings. Saving is temporary deferred consumption. It occurs when income and consumption do not coincide. The reason that encourages firms not to use the fully received income, but to save and accumulate it, is their investment activity in order to expand their business.

The motives for savings among households are more diverse and are associated with the psychological characteristics of people.

The size of both consumption and savings depends on the income received and is limited by it.

The dependence of the consumed and saved parts of income on its total value is usually called consumption and saving functions.

a) S = f(s);

b) C \u003d f (c);

in) y \u003d C + S,(47.1)

where At- income; With– consumption; S- savings.

The psychology of people has a significant impact on the use of income, therefore, in economic theory, indicators of the average propensity to consume and save are used.

3. Marginal propensity to consume and save. Behind the average propensity of the population to consume and save are fluctuations in both income and people's moods, so it is important to know how a person reacts to a change in his income - in the direction of increasing consumption or saving? For this purpose, indicators of the marginal propensity to consume and save are used, respectively (Fig. 47.1).

Rice. 47.1.marginal propensity

a) for consumption b) to save.

marginal propensity to consume– change in consumption due to change in income:

where: ?C - consumption growth; ?y - income growth; MPC is the marginal propensity to consume.

marginal propensity to save is the change in saving due to a change in income:

where?S is the increase in savings; ?y - income growth; MPS is the marginal propensity to save.

Quantities MPC and MPS always fluctuate within the limits of income growth - this shows their interconnection and interdependence.

a) MPC + MPS = 1;

b) 1 - MPC = MPS;(47.5)

in) 1 - MPS = MPC.

corrective effect on MRS and in addition to income, provide:

- price level;

– taxation;

- accumulated property, etc.

Summarizing the individual aspirations of individuals, we can proceed to the calculation MRS and MPS at the macroeconomic level.

Topic 48. FUNCTIONAL ROLE OF INVESTMENTS IN THE ECONOMY

1. The concept of investments and their types. Investments- long-term capital investments in enterprises of various industries, spent on expanding production, improving quality and increasing the competitiveness of products.

According to the nature of use, investments are divided into gross and net (see question 30), and according to the impact of the national product on them, they are divided into autonomous and derivative (induced). Autonomous called investments that do not depend on the dynamics of GNP, but on the contrary, they themselves have an impact on its growth. Derivatives(induced) investment is a direct result of GNP growth.

Unlike savings, the value of which is directly and directly determined by the size and dynamics of GNP and NI, investments only in the most general form depend on income. To a greater extent, they are under the influence of diverse market factors that make them the most unstable part of aggregate demand (Fig. 48.1).

2. The role of investment in establishing macroeconomic equilibrium. The growth of investment activity in the market leads to the creation of new jobs, and consequently, to the expansion of employment and the reduction of unemployment. However, this process is not unlimited, because if you go over a certain threshold of optimality, then you can get inflation.

Rice. 48.1.Factors directly affecting the investment decisions of market agents

Rice. 48.2.Macroeconomic equilibrium based on equality of savings and investment

S- savings; I– investments; at– the volume of national production (GNP); FFX- the line of potential production in conditions of full employment; yE– equilibrium volume of GNP; E, E1, E2- balance points.

Such an optimality point is the equality of savings and investments, i.e. S=I(Fig. 48.2).

The graph shows that the lines of investment and savings intersect at point E, which, projected onto the horizontal axis of the graph, shows the equilibrium volume of national production, i.e., the optimal state of the economy, in which the interests of market participants are balanced.

Line FF1 on the graph shows that macroeconomic equilibrium can develop at a level where full employment is not achieved, i.e., in conditions of cyclical unemployment.

Topic 49. MULTIPLIER THEORY

1. Substantiation of the multiplier effect in the national economy. Investment is an important factor in economic development. At the same time, they are subject to a special multiplier mechanism that multiplies their impact on the growth of the gross national product (GNP).

Investment multiplier is a numerical coefficient showing an increase in GNP by 1 + n with an increase in investment by 1.

The multiplier effect is a kind of economic echo, which, like its acoustic counterpart, repeatedly repeats the original impulse. Income consists of consumption and savings. Therefore, the multiplier effect can be expressed in terms of the marginal propensity to consume (MRS) and saving (MPS):

where To is the investment multiplier.

The larger the share of consumption in income, the stronger the multiplier effect will be in the economy, since the growth in consumption (expenditure) of some people leads to an increase in the income of others who have sold their goods and services. This chain (echo) will continue until the initial level of consumption is gradually replaced by savings.

The investment multiplier can be represented graphically (Fig. 49.1).

Rice. 49.1. Investment multiplier effect in the economy

S- savings; I– the initial level of investment; I, I", I" - change in investment; E,- equilibrium in the market; ye is the initial volume of national production; yE1,yE2 - changes in the volume of national production.

The multiplier multiplies not only the increase in investments, but also their reduction, that is, it works in both directions. To be convinced of this, it is enough on the chart 50.1 below the line I build line I". Then UE - UE2 will show the impact of the multiplier on the decline in GNP.

2. Investment accelerator. The investment multiplier effect is complemented by the accelerator effect.

Investment Accelerator- coefficient showing the ratio between the increase in investment in a given year and the increase in GNP in the previous year.

The economic development of the country is not only a consequence of investments in it, but serves as the starting point for increasing them in the future. In this regard, it is advisable to divide all investments into autonomous and derivatives (induced). The value of the former does not depend on the current level of GNP and can be considered as an initial impetus to the active actions of entrepreneurs in the market. It is these investments that create multiplier effect. The value of the second is a consequence of the previous development: entrepreneurs, seeing that the volume of national production is growing and the market situation is improving, seek to use favorable conditions and expand investment. As a result, derivatives are imposed on autonomous investments, which leads to accelerated development, i.e. accelerator effect.

Topic 50. STATE BUDGET AND TAXES

1. The concept of the budget. The economic relations that develop in society regarding the use of money are called finance. A significant part of them is accumulated by the government in the form of public finances. A significant part of GNP is redistributed through public finance. The main link of public finance is the budget.

The budget structure of unitary states differs from federal ones: the former have two levels of budget - national (federal) and local, and the latter have three: between the federal and local budgets there is an intermediate regional link in the form of state budgets (USA), states (Germany), subjects of the federation (Russia). If you bring all levels of budgets together, you can get consolidated state budget, which is used for special analysis and forecast of cash flows in the national economy.

The leading link in the budget structure of the country is the state budget- the financial plan of the state for the centralized attraction and expenditure of financial resources to perform its functions.

In countries with a developed market economy, the state budget performs, in addition to its direct functions of ensuring the country's security, maintaining the state administrative apparatus, implementing social policy and developing science, education, culture, another additional function - regulating the economy, indirectly influencing the market behavior of firms in order to achieve sustainable development.

2. Budget surplus and deficit. The state budget is drawn up in the form balance of income and expenses for the year. The equality of income and expenditure parts between themselves implies budget balance, however, the presence of cyclicality in the economy, the need for an active stabilization policy and structural changes in the national economy in order to implement the achievement of scientific and technical progress, often leads to a mismatch of their own parts of the budget and the emergence of a deficit (more often) and a surplus (less often).

budget deficit- the amount of excess of government spending over its revenues within the financial year. Distinguish current(temporary, not exceeding 10% of the budget revenue) and chronic(multi-year, critical, exceeding 20% ​​of the revenue). When approving a deficit state budget, its maximum allowable value is usually set. If in the process of budget execution it is exceeded, then sequester budget, i.e., a proportional reduction in spending for the remaining budget period for all items of expenditure, with the exception of socially protected ones.

Budget surplus- the amount of excess of state revenues over its expenditures within the financial year.

The alternation of periods of budget deficit and surplus makes it possible to balance the budget not for a year, but for 5 years. This approach allows the state to maneuver its finances in order to smooth out the business cycle by about 30–40% (Fig. 50.1).

Rice. 50.1.Cyclical balancing of the state budget

R - government revenues; G - government spending; M - balanced budget.

3. Public debt- this is the excess of the sum of the total deficits of the state budget accumulated over the previous years over its surpluses. The state debt of the country is formed at the expense of both internal and external borrowings.

Domestic public debt- the debt of the government of their country. It is served by issuing government bonds and obtaining loans from the Central Bank of the country.

External public debt- the debt of the state to foreign creditors: individuals, states, international organizations. If the government is not able to pay its public debt and fails to meet the deadlines for payments, then a situation arises default- temporary waiver of obligations, entailing sanctions of creditors up to a boycott and confiscation of state property located abroad.

A significant public debt disrupts the financial system of the state, worsens the business climate in the country and significantly limits the growth of the population's well-being.

4. The principle of taxation. taxes- These are mandatory payments of individuals and legal entities levied by the state. They form 90% of the revenue part of the state budget of the country.

Taxes, in addition to the fiscal function (i.e. filling the state budget), are intended for:

a) regulation;

b) stimulation;

c) income redistribution.

The principles of rational taxation, developed by A. Smith, have not lost their relevance to this day:

The principle of justice: the tax burden should be borne by the whole society, and tax evasion, the creation of various "gray schemes" of settlements with the state should be condemned by society.

Certainty principle: the tax must be specific in amount, term and method of payment. It is impossible to introduce taxes retroactively (modern practice in Russia).

convenience principle: the tax should be convenient primarily for the population, and not for the taxman.

Saving principle: the costs of collecting taxes should not be excessive, burdensome for society.

5. Direct and indirect taxation. According to the method of collection, taxes are distinguished direct and indirect.

Direct taxes- These are visible taxes, since they are established on the income received by a person or company, as well as on their property: income tax, corporate income tax, inheritance and gift tax, land and property tax, etc.

Indirect taxes- These are implicit taxes, invisible to consumers, since they are levied on producers who are obliged by the state to include them in the price of goods and transfer them to the state's income immediately after the sale. These are turnover tax, value added tax, sales tax, excises.

6. Laffer curve. play an important role in taxation tax rates- the amount of tax per unit of taxation. If they are excessively high, then the economic activity of the population will be restrained. In the early 80s. 20th century A. Laffer, then an adviser to President R. Reagan, found that the increase in rates increases the flow of taxes to the treasury only to a certain limit, after which the population goes into the shadow economy, preferring not to pay taxes at all. This situation in economic theory is described using Laffer curve(Fig. 50.2).

Rice. 50.2.Laffer curve

Topic 51. BUDGET AND TAX POLICY

1. The impact of government spending and taxes on households.

2. The impact of government spending and taxes on the business sector.

1. The impact of government spending and taxes on households. The population actively reacts to the policy pursued by the government in both parts of the state budget - revenue and expenditure. A change in taxation directly affects the income of the population, so their consumer behavior in the market depends on whether taxes are permanently or temporarily changed in the country; they are expected by society or take it by surprise.

Temporary tax increase does not affect the overall level of household consumption in the long run, since the population during a period of high taxes will seek to borrow funds in order to maintain the existing level of consumption. Consequently, they will cut savings. An increase in taxes leads not only to a reduction in savings, but also to an actual decrease in the level of household consumption. At the same time, government spending can mitigate, and sometimes even neutralize, the effect of tax increases on aggregate demand, since the economy is government spending multiplier.

where Su- government spending.

This coefficient shows how much the value of the gross national product will change with an increase in government spending per unit. The multiplier effect is obtained due to the fact that, following the growth of government spending, the income of the population increases, and, consequently, tax revenues, which partially cover the additional government spending.

2. The impact of government spending and taxes on the business sector. For the business sector, the change in taxation is important in terms of investment opportunities. Since investments in the business sector are formed mainly on a loan basis, the dynamics of household savings is the initial basis for their activities.

As for the firms' own savings, the state tax policy has a direct effect on them. For example, an increase in income tax, tightening the conditions of tax holidays when investing objects that the state needs reduces the resource base for investment for firms.

On the other hand, along with increased taxation, the government often provides for spending on subsidizing the investment activity of firms, permits accelerated depreciation of used equipment, which covers the losses of firms from tax increases.

In general, if the choice is between equal increases in government spending and lower tax revenues, the gross national product will increase more in the former case. At the same time, the state budget deficit will be larger with tax cuts than with an identical increase in government spending.

Topic 52. MONEY AND THEIR FUNCTIONS

Money- this is a commodity of a special kind, historically separated from a number of other commodities and has become a universal equivalent for all other commodities.

Money in its development has come a long way from exotic random forms to gold and paper money.

2. Functions of money. The use of money in the economy is to perform five interrelated functions (Fig. 52.1).

Rice. 52.1.Functions of money

how the measure of value money measures the value of all goods. You can determine the price of any product with the help of ideal money, which until the 30s. 20th century gold was used, and the exchange rate of the national currency is currently used.

how medium of exchange money acts as a fleeting intermediary in purchase and sale transactions, which makes it possible to use paper money. If the state releases them beyond measure, they will depreciate and be replaced by barter. Ultimately, the depreciation of money can lead to the restriction of market transactions using cards and coupons.

money like instrument of payment express the relationship between the debtor and the creditor, since the act of sale is often broken in time. The period of payment for goods and services in this case, for a number of reasons, does not coincide with the delivery of products. Such transactions are executed in the form of promissory notes - bills, banknotes, bills, checks, etc. On their basis, credit money arises.

money like store of value represent a stock of financial resources for future expenses, form the savings of households and the investments of entrepreneurs.

Role fulfillment world money is that money functions as a medium of circulation and means of payment in international economic exchange.

3. Theories of money. Three main theories of money have developed in economics: 1) metal; 2) nominalistic and 3) quantitative.

metal theory was developed within the framework of mercantilism and reduced monetary circulation to two functions - a store of value and world money. Precisely these functions were most successfully performed by noble metals, being the personification of the wealth of the nation.

Nominalist theory was developed by the classical school in polemics with supporters of the metal theory. Pointing to the limited approach of the mercantilists to money, the supporters of this theory fell into the other extreme, absolutizing the significance of the functions of a means of circulation and payment and declaring money to be purely conventional signs, monetary units that were legalized by the state.

Quantity Theory money originated also within the framework of the classical school. Gradually, it began to prevail in economic theory and developed even in the twentieth century. (the equation of the quantitative theory of I. Fisher; the Cambridge equation of A. Pigou). Its meaning boils down to the fact that money has a cost basis, so their increase in the economy does not lead to an increase in national wealth, but only to an increase in prices. Therefore, the exchange equation can be written:

MV=PQ,(52.1)

where M- the amount of money in circulation; V- speed of money circulation; R- prices of goods; Q- quantity of goods (volume of production).

This equation was derived by the American economist I. Fisher in 1911. In essence, the equation of exchange is an identity and is constantly observed in the economy, but it is of no small importance, as it shows what an unreasonable policy of issuing paper money by the state can lead to.

4. Monetary system. In any country, money circulation is organized by the state on certain principles, that is, in the form monetary system. The elements of the monetary system are:

- national monetary unit (ruble, dollar, yen, etc.), in which prices for goods and services are expressed;

- types of banknotes in the form of credit paper money and bilon tokens, which are legal tender in cash circulation;

- the organization of the issue of money, that is, the procedure for issuing money into circulation;

- state bodies that regulate and control money circulation (institutions of the Central Bank of the country, the Ministry of Finance, state treasuries).

5. The modern concept of money. In modern conditions, money circulation is not based on the gold standard, but is a system of paper credit money.

Credit money, in turn, gave rise to a system of credit cards, which, with the advent of the era of computers, gave rise to the so-called "electronic money" that performs the functions of money in a paperless way, in the form of computer signals.

Topic 53. PROPORTIONS OF THE MONEY SECTOR OF THE ECONOMY AND THE MONEY MULTIPLIER

1. Money sector of the economy- a link between all agents of market relations. The money market has a specific feature that distinguishes it from other markets: a special commodity circulates here - money. They have a special price - the interest rate, which is the opportunity cost of money. Therefore, in this market, money is not sold or bought, but exchanged for other financial assets.

The proportions that develop between supply and demand in the money market depend on the dynamics: the money supply, the deposit ratio, the deposit multiplier.

2. Money supply. Liquidity. Modern economic theory is dominated by a functional approach to money: everything that is used as money is money. At the same time, the share of money itself in the total volume of means of payment does not exceed 25%. For these reasons, along with the concept of money, a broader concept is also used. money supply.

money supply is a set of cash and non-cash purchasing and payment means that the population, firms and the state have at their disposal.

Usually, the money supply is classified according to two criteria: by physical appearance and by liquidity (Fig. 53.1).

Liquidity of money supply- this is the ability of a monetary asset to turn into cash and perform its functions.

According to the principle of liquidity, the entire money supply is divided into several aggregates, which are formed according to the principle of nesting dolls.

Unit M1 includes cash and bank deposits, which are used for settlements.

Rice. 53.1.Money supply classification

Unit M2 includes M1 and is supplemented by savings deposits, shares of mutual funds, etc. It is approximately four times larger than the M1 aggregate. Both of these units are considered to be highly liquid.

MZ unit in addition to M2, it takes into account securities of large depositors of banks, shares of investment funds.

Unit L along with the MOH contains banker's acceptances, commercial paper, short-term securities and bonds of the Central Bank of the country. Monetary aggregates МЗ and L are commonly referred to as low liquidity.

Close in meaning to the money supply indicator monetary base, which is calculated as the sum of cash in circulation and bank reserves.

The monetary base indicator allows you to calculate deposit multiplier, demonstrating the possibility of expanding the deposits of commercial banks with an increase in the monetary base by 1:

where MD– deposit multiplier; rr– the required reserve ratio at the request of the Central Bank; fr– share of banks' own reserves, in excess of required reserves.

3. Calculation of the money multiplier. The state completely controls the issuance of money into circulation, but it cannot do this with respect to the money supply, since banks, through their professional activities, significantly increase the money supply.

The ratio of new money created by banks to their reserves is called money multiplier.

money multiplier- this is a numerical coefficient showing how many times the money supply will increase or decrease as a result of a change in the monetary base by one unit.

The multiplier is inversely related to the level of reserves and can be described by a simplified formula:

where M- money multiplier; R- bank reserves.

The main factors in the growth of the money supply due to the multiplier effect are:

– the size of the minimum rate of reserves;

- Demand for new loans.

Using these levers, the Central Bank can influence the money supply in the country, and through it regulate:

– economic activity of market agents;

– macroeconomic proportions;

– inflationary processes;

– investments, etc.

Topic 54. EQUILIBRIUM IN THE MONEY MARKET

1. Demand for money. Money is needed, at a minimum, to buy goods and pay for services, as well as to accumulate them as a stock. These initial factors form the demand. Bonds and other financial assets act as an alternative to money in the market, therefore, if these non-monetary assets bring their owners a greater percentage than money, then the population will prefer to purchase bonds. The benefits of owning money, compared to investing in securities, are the following motives:

- transaction motive: money is needed for current settlements in the economy;

- speculative motive: money may be required to purchase the same bonds under favorable conditions;

- precautionary motive associated with the risk of capital loss.

In general, people tend to value the liquidity of money by comparing their preferences with the dynamics of the interest rate. In addition, as people's incomes rise, so do prices, which means more money is needed to service the economy.

Demand for money- the amount of money that households and firms are willing to have at their disposal, depending on their income and interest rate.

A change in the interest rate causes demand to slide along the curve MD, and the higher it is, the less money remains with the population and, consequently, the faster they must circulate in order to service a greater number of transactions. A change in the income of the population leads to a shift in the curve MD right or left (Fig. 54.1).

Rice. 54.1.Demand for money

MD- Demand for money.

2. Money supply - is the amount of money put into circulation by the country's central bank.

If demand is formed freely in the market, depending on the needs of the population for money, then the supply is always set by the banking system of the state (Fig. 54.2).

Rice.54.2. Offer of money by the Central Bank of the country

MS- money supply.

Three key factors influence the value of the money supply:

- the amount of money that is formed by the Central Bank of the country;

- the ratio of reserves-deposits, showing the ability of commercial banks to increase the money supply;

- deposit ratio, reflecting the ability of the population to invest in commercial banks.

3. Equilibrium in the money market.

Rice.54.3. Equilibrium in the money market

MS- money supply

MD- money supply.

As a result of the interaction of demand and supply of money, their market equilibrium arises, i.e., the equality of the amount of money offered on the market is ensured by the total amount that the population wants to have (Fig. 54.3)

The peculiarity of monetary equilibrium in comparison with commodity and resource markets is that it is constant in the market; otherwise, serious disruptions occur, often leading to a financial crisis (as in August 1998).

Topic 55. BANKING SYSTEM

1. Credit relations. In a market economy, money is constantly in circulation, so temporarily free financial resources must flow into the money markets and go into business.

Credit- the movement of borrowed capital, carried out on the principles of urgency, repayment, payment, security and purpose of the monetary resources received for temporary use.

Credit performs important functions in the economy:

- redistributes money: from those who have it free to those who need it;

- contributes to saving circulation costs, since it does not require the state to issue additional money into circulation;

– accelerates the concentration and centralization of business. The loan has a variety of forms (Fig. 55.1):

Rice. 55.1.Loan types

2. The concept of banking.Banks- these are economic institutions that serve the system of credit relations in society.

Market agents apply to the bank in the following cases:

- in the presence of temporarily free funds;

- with a temporary shortage of funds;

- for cash settlements with counterparties (Fig. 55.2).

Rice. 55.2.banking

There are three main types of bank deposits:

1) deposit, or demand deposit. With the help of such a deposit, the population makes small savings, which it can withdraw from the bank at any time, and firms open current accounts in order to carry out current operations;

2) term deposit, or term deposit. The money is placed in the bank with an obligation not to use it until a certain date;

3) certificate of deposit is a security that indicates that the bank has accepted a deposit on the terms of a term account. Such securities may be subject to collateral transactions or settlement in the securities market.

The provision of loans by the bank is carried out in the form of cash loans, differing in urgency:

– short-term – up to 1 year;

– medium-term – from 1 to 5 years;

– long-term – over 5 years.

3. The structure of the credit and banking system. The credit-no-banking system is a monetary and financial structure of the economy, consisting of two-tier banks and specialized credit and financial organizations.

The central bank of the country is the first level of the banking system. Its main functions are:

– emission(issue) of money into circulation and their withdrawal from it;

- function of the government bank, which involves financing government programs, servicing the public debt and the public sector, and pursuing a monetary policy;

– bank function of banks expressed in the refinancing of the economy through the provision of commercial banks with the opportunity to obtain a loan when they lack funds. The Central Bank does not provide loans to the population and firms.

– supervision and control function financial markets and banks.

Commercial banks constitute the second level of the country's banking system. They are intended for credit and settlement services for the population and firms, in the process of which they create credit money (see question 54). According to the main activities, commercial banks can be divided as follows (Fig. 55.3):

Rice. 55.3.Classification of commercial banks

Specialized credit and financial institutions are organizations that are not banks in form, but in fact partially perform their functions. In a market economy, they compete fiercely with commercial banks for the money of the population and firms.

These should include:

– pension funds;

- Insurance companies;

– trust companies(semi-banks);

– pawnshops;

– mutual credit societies;

– credit partnerships.

The credit and banking system should ensure the stability of finances. For this purpose it is necessary:

– improve banking legislation;

– to enlarge banking systems, since small banks are unstable, low-income and unable to provide investment loans;

- to strengthen the connection of the banking sector with the real sector of the economy.

Topic 56. MONETARY POLICY OF REGULATION OF THE MARKET ECONOMY

1. Importance of monetary policy.Money-credit policy the state consists in regulating monetary circulation in order to influence the growth of production and curb inflation and unemployment.

The main body implementing this policy is the Central Bank of the country, which should:

a) ensure the stability of the national currency;

b) develop uniform rules for the money market and control the actions of its agents;

c) implement a consistent macroeconomic policy that allows the use of various economic regulators and stabilizers for the development of the real sector of the economy.

To achieve these goals, the Central Bank manipulates money and loans.

Rice. 56.1. Tight monetary (monetary) policy.

MD - money supply;

MD1 - movement of the money supply; MS is the money supply.

2. Types of monetary policy. Depending on the economic situation, the Central Bank pursues a policy of either "expensive" or "cheap" money.

If inflation in the country acquires dangerous proportions, then the Central Bank sets itself the goal of keeping the money supply at the existing levels, preventing a new issue of money. Then, despite changes in the demand for money, the aggregate supply curve in the market will take a vertical form (Fig. 56.1).

In this case, an increase in the demand for money will cause an increase in the interest rate (price of money), which will negatively affect the investment activity of the business sector. Such a monetary policy of the Central Bank is called a tight monetary policy with its inherent "expensive" money.

If it is necessary to create favorable conditions for investment in the country, then the Central Bank will be forced to sacrifice the stability of the money supply and will control the level of the interest rate, preventing it from rising under the influence of money demand.

This monetary policy of the Central Bank is called flexible monetary policy, which is based on "cheap" money (Fig. 56.2).

Rice. 56.2.Flexible monetary (monetary) policy

If the country sets the task of supporting the development of the economy or compensates for the slowdown in money turnover, then a simultaneous increase in the money supply and the interest rate is allowed.

This compromise policy is called intermediate monetary policy.

The choice by the Central Bank of one or another policy in the money supply depends on the reasons that gave rise to changes in the demand for money.

3. Instruments of monetary policy. The monetary policy of the Central Bank consists of four elements:

1. Operations on the open market. The meaning of the actions is that, by selling and buying securities on conditions accessible to the entire population, the Central Bank regulates the circulation of money in the country: by selling securities, the Central Bank binds the money supply, withdraws excess money from the population, firms and commercial banks, and by buying it increases.

2. Changes in the discount rate of interest. The state, represented by the Central Bank, is a creditor to commercial banks that receive loans from it against their own debt obligations. Central Bank loans are secured by government securities owned by commercial banks.

The accounting policy is carried out by establishing and revising the refinancing rate, which makes it difficult or easier to obtain financial resources, which, in turn, affects the ability of commercial banks to issue loans to customers.

3. Change in reserve requirements for commercial banks. All banks are required to set aside a portion of their funds to secure payments without putting them into circulation. Required reserve requirements are set at approximately 10%.

If the Central Bank tightens reserve requirements for commercial banks and this leads to a reduction in the money supply, then such actions are called restrictive monetary policy, and if vice versa - expansionist.

Money supply targeting. The purpose of the measures is to set upper and lower limits for the growth of the money supply for a certain period of economic development. Moreover, the upper limit of the growth of the money supply should not be exceeded under any circumstances. In essence, we are talking about a kind of "money corset" for the economy.

Topic 57. ECONOMIC GROWTH AND DEVELOPMENT

1. The concept of economic growth. Under economic growth is understood as a stable increase in the productive power of the economy over a long period of time.

Economic growth is measured in two interrelated ways:

1. An increase in real gross national product (GNP) for a certain period (year).

2. An increase in real GNP per capita for a certain period (year).

The following indicators are used to determine the rate of change in economic growth:

High rates of economic growth are not always justified if they are achieved at the expense of product quality. In these cases, economic growth is carried out on an unhealthy basis and sooner or later undermines the economic potential of the country.

2. Goals, efficiency and quality of economic growth. By ensuring economic growth, the state can achieve the following goals:

1) improve the living conditions of the population;

2) put into practice the achievements of scientific and technical progress;

3) increase the production capacity of the economy;

4) smooth out the social differentiation of incomes of the population and stabilize the economic system.

The effectiveness of economic growth is expressed in improving the quality of national goods and services and increasing their competitiveness in the domestic and foreign markets, developing new industries, deepening the specialization and cooperation of production, mastering new technologies, as well as overcoming "X-inefficiency"(i.e., unnecessary costs) through improved management.

Economic growth is not only quantitative Expression, but and quality content which is expressed in the social protection of disabled members of society and the unemployed; safe working and living conditions for people; increased investment in human capital; support for full and effective employment.

3. Factors of economic growth. Factors of economic growth - conditions that ensure an increase in GNP. All factors can be divided into two groups:

straight- factors that ensure the physical growth of the economy, creating its economic potential;

indirect- factors affecting straight lines by slowing down or accelerating them (Fig. 57.1).

4. Ways to ensure economic growth. Economic growth in the country can be achieved through extensive or intensive development.

Essence extensive way comes down to the development of the economy in breadth by increasing the involvement in production of a larger number of workers, raw materials, means of labor, land, etc. With the help of extensive growth, society solves important problems:

- provides employment and reduces unemployment;

- develops new industries, restructures the economy in accordance with market needs;

Rice. 57.1.The main factors of economic growth and their interaction

– involves new territories and resources in economic turnover;

- Eliminates territorial disproportions, allowing depressed and undeveloped regions to be brought up to the national average.

Essence intensive way It is expressed in the development of the economy in depth due to the qualitative improvement of the labor force, the use of advanced technologies, and higher labor productivity. The intensive development of the economy allows:

- to use available resources economically;

- increase the competitiveness of national goods by improving quality, reducing production costs;

– to introduce the achievements of scientific and technical progress into production.

Extensive and intensive factors of economic growth always coexist together, so the country's economy can develop only predominantly along any path.

Topic 58. INTERNATIONAL ECONOMIC RELATIONS

1. World economy is a global economic system that involves national economies in common economic processes for all through the international division of labor.

It arose on the basis of intercountry economic relations and relations, which initially manifested themselves in the field of foreign trade, and then spread to the manufacturing sector, research and development, labor migration, and the use of financial resources.

The world economy developed on the basis of a free competition market by the middle of the 19th century, but at the turn of the century, under the influence of the monopoly of the economy and the export of capital, it acquired the form of world empires. The struggle between them led to the fall of a number of countries from the system of the world capitalist economy and the emergence of two world subsystems - capitalism and socialism, which finally took shape in the middle of the 20th century. However, at the end of the XX century. the world economy has again become one, which makes it possible to consider it as a global whole.

The material basis of the world economy is international division of labor- specialization and cooperation of countries in the production of goods and services (Fig. 58.1).

Rice. 58.1.The structure of the links of the international division of labor

In addition to it, there are:

– international trade in goods and services;

– international movement of capital;

– international labor migration;

– international monetary and financial relations;

- international economic integration.

In recent decades, international economic relations have embraced changes in the sphere of property, internationalizing them, and also causing macroeconomic regulation of entire groups of countries on a supranational basis (EEC), etc.

2. Internationalization, integration and globalization of economic processes. The current state of the world economy is characterized by the openness of national economies, i.e., involvement, integration into the world market, when goods produced in one country are consumed in other countries.

At the same time, the internationalization of economic processes, the globalization of the economic space and the integration of individual countries into a single whole should not infringe on national economic security, lead to the economic dictate of some countries over others.

An indicator characterizing the involvement of the national economy in the world economy is export quota, calculated as the ratio of a country's exports to the gross domestic product (GDP) created in it, expressed as a percentage:

3. Forms of international economic relations. World economic ties are to a certain extent formed under the influence of the migration of capital and labor resources.

Capital migration finds expression in moving from country to country in search of a higher rate of profit. Capital is exported in two main forms - direct and portfolio investment. Direct investments lead to the formation of property abroad, and portfolio- are expressed in the acquisition of shares of foreign companies, without providing ownership rights to enterprises and even control over them.

In countries that import capital, special techniques and measures have been developed to attract foreign investment:

1) reduction of the tax burden up to the introduction of the regime of "tax holidays";

2) creation of special economic zones and offshores;

3) the introduction of special legislation regulating the regime of foreign investment.

On the basis of the international movement of capital, transnational companies, dominating the world markets of certain goods and services.

International labor migration is a consequence of the movement of the population in search of work. It is characterized by the presence of countries of mass emigration of the able-bodied population with low wages and economic development, and countries that pursue an active immigration policy to attract foreign workers. Despite their own unemployment, it is beneficial for rich states to import cheap labor, since it does not shy away from hard, unskilled, non-prestigious work and does not require large expenditures on social protection, unlike the local population.

As the world economy develops, international labor migration is intensifying, including due to illegal migration, which has engulfed not only the United States and the EU countries, but also Russia in recent years.

Labor migration is changing not only quantitatively, but also qualitatively, acquiring the form of a “brain drain”.

Topic 59. FOREIGN TRADE AND TRADE POLICY

1. Importance of foreign trade for the national economy.International trade is the interaction of a country with foreign countries regarding the movement of goods and services across national borders.

Foreign trade allows the state:

a) receive additional income from the sale of national goods and services abroad;

b) saturate the domestic market;

c) overcome the limited national resources;

d) increase labor productivity by specializing in world trade in the supply of certain products to the world market.

Foreign trade is characterized by the concepts export and import: the first involves the export of goods and services abroad and the receipt of foreign currency in return, and the second - their import from abroad with the appropriate payment. Export, like investment, increases the aggregate demand in the country and drives foreign trade multiplier, creating primary, secondary, tertiary, etc. employment. An increase in imports limits this effect due to the outflow of financial resources abroad.

Foreign trade is organized on the principles developed in 1947 and enshrined in the General Agreement on Trade and Tariffs (GATT ) . It was replaced in 1996 by the World Trade Organization (WTO), which considers foreign trade more broadly to include the exchange of goods services and the sale and purchase of intellectual property.

2. Profitability of foreign trade. The theory of comparative advantage. Export in foreign trade, according to A. Smith, becomes profitable if the costs of producing goods within the country are much lower than those of other states. In this case, goods produced by the national economy have absolute benefits ahead of foreign competitors and can be easily sold abroad. On the other hand, no state can have an absolute advantage in all produced goods, therefore, it is necessary to import those that are more expensive domestically and cheaper abroad. Then at the same time there is a direct benefit from both exports and imports.

Based on the absolute advantages of A. Smith, D. Ricardo formulated the theory comparative costs (benefits), according to which, when determining the profitability of foreign trade, one should compare not the absolute, but the relative effect, and not the costs themselves, but their ratios. At the same time, it should be taken into account that, by producing certain goods in conditions of limited resources, the country is deprived of the opportunity to produce others that are no less necessary for it, therefore, in accordance with the theory of comparative advantages of D. Ricardo, a situation is quite possible in which it is profitable for the country to import goods, even if their domestic production is cheaper. In this case, A. Smith's theory of absolute costs becomes a special case of the theory of comparative costs.

The theory of comparative costs of D. Ricardo in modern conditions is supplemented by the theory of Heckscher-Ohlin, named after two Swedish economists, who proved that countries tend to export not only those goods that have absolute and relative advantages, but also in the production of which relatively excess factors of production are intensively used , but import goods for the production of which there is a shortage of factors in the country. Unlike A. Smith and D. Ricardo, their modern followers believe that both sides benefit from foreign trade - both this country and the rest of the world.

Topic 60. BALANCE OF PAYMENTS

1. Macroeconomic value of the balance of payments.Payment balance- state accounting and listing of payments received from abroad on a par with payments abroad.

The balance of payments affects the market rate of the national currency, which in turn affects the intensity and direction of export-import flows, the flow of investment resources from one country to another and, in general, the macroeconomic balance in the country.

In addition to the equilibrium state of the balance of payments (when the balance is zero), an active and passive balance is possible. active balance indicates the excess of foreign exchange receipts in the country over payments, and passive- vice versa.

A clearly expressed balance of payments surplus is less favorable for the national economy than a zero one, and a passive, negative one, observed for a number of consecutive years, shows an insufficiently effective, subordinate position of the country in the world market and may ultimately lead to a decrease in its exchange rate (devaluation ).

2. The structure of the balance of payments. The main sections of the balance of payments is the balance of current operations and the balance of capital movements.

Current account balance includes items related to the movement of exported, imported and re-exported goods, the provision of insurance, transport, repair, financial and other services, various types of transfers: money transfers from individuals, gifts and scientific grants, subsidies and loans to individuals, as well as the purchase of foreign currency for import and export.

Capital flow balance reflects the total value of purchases and sales of land, stocks, bonds, bank deposits, loans and credits, etc. The sale of capital to foreign investors will be an import of capital, and the purchase will be an export.

3. Trade balance. One of the important components of the balance of payments included in the balance of current operations is trade balance, characterizing the ratio of exports and imports of goods. It is calculated on the basis of customs statistics on crossing the state border by goods.

For certain groups of goods, the government establishes customs duties- special border commodity taxes, which are summarized in a special customs tariff. This rate can be reduced with customs preferences(benefits).

4. Factors affecting the state of the balance of payments. The balance of payments is adjusted with the help of the Central Bank's operations for the purchase and sale of foreign currency, gold and other financial assets. All these actions of the bank do not pursue the goal of making a profit, but form official reserves of the state. These reserves cover passive current account and capital flow balances. By selling the accumulated reserves of gold and currency, the government increases their market supply. With a surplus in the balance of payments, it withdraws excess resources from the market, increasing its official gold and foreign exchange reserves.

Topic 61. EXCHANGE RATE

1. International Monetary System- a set of international norms, rules and methods for making payments between states, fixed by an agreement between them.

The modern monetary system has existed since 1976 and is called Jamaican. She came to replace Bretton Woods system, existed for 30 years on the basis of the gold-dollar standard. The Jamaican system is based not on one currency - the dollar, but on a "basket" of several major world currencies (dollar, mark, yen, pound sterling, French franc), which is why it is called a multi-currency standard. The world monetary standard in this system is a special international monetary unit SDR, which is often called "paper gold". HAPPY BIRTHDAY(special drawing rights) are non-cash electronic money in the form of an entry on the accounts of countries in the International Monetary Fund, which is pursuing the SDR to become dominant in international settlements, but they have not yet succeeded in seriously pushing the dollar. In addition, in recent years, a new serious contender for the role of world money has appeared - the euro.

2. Determination of the exchange rate.Exchange rate - is the price of one currency expressed in units of another. Depending on which currency is the base for comparison, it is divided into two types: exchange and motto exchange rates.

exchange rate- this is the price of a unit of foreign currency, expressed in national money, and the motto - vice versa.

The exchange rate is influenced by the value of the money supply and inflation associated with it. Depending on the form of exchange rate regulation, there are fixed and floating courses. Fixed exchange rate assumes its invariability in relation to other currencies. If the ratio in the market changes, then the Central Bank conducts foreign exchange intervention (sale) in the market in order to restore the established fixed exchange rate of the national currency. floating exchange rate determined in the process of free market exchange under the influence of supply and demand. In the Russian Federation, the exchange rate is floating with some restrictions from the Central Bank and is set daily.

The ratio of official exchange rates can be brought into line with market demand and supply by methods of devaluation and revaluation of the national currency.

Devaluation- a decrease in the official exchange rate of the national currency of the country in relation to foreign ones.

Revaluation- an increase in the official exchange rate of the national currency in relation to foreign ones.

Purchase and sale of foreign currency is carried out on currency exchanges, where carried out in the form spot(direct) or forward(with a delay of up to three months) transactions. The leading centers of the currency markets are New York, Hong Kong, London, Tokyo.

3. Convertibility of currencies. The use of the national currency in international settlements at its official rate makes it convertible.

According to the degree of convertibility, the following types of currencies are distinguished:

1. Freely convertible currency(SLE) - fully fulfills the role of world money, that is, without any restrictions and obstacles, it is used in all foreign trade operations of a current and investment nature, is recognized by all countries as a universal means of payment and settlement between them. The hard currency includes the US dollar, Swiss franc, German mark, British pound sterling, Japanese yen, etc.

2. Partially convertible currency. The most common form of currency, which implies various restrictions on currency transactions. These limitations are usually associated with the use clearing(bilateral) settlements, licensing of exports and imports, the use of different exchange rates depending on the type of transactions, restrictions on the import and export of the national currency, regulation of the export of profits, the import of investments, etc.

3. non-convertible currency. It is widespread among developing countries and involves strict prohibitions and restrictions on operations with national and foreign currencies. A similar currency was the Soviet ruble.

Currency convertibility can be assessed from the standpoint of both the population of the country and foreigners.

4. Internal currency convertibility means its ability to service transactions for goods and services within the country and the ability for the population to exchange it for foreign currency.

5. External currency convertibility means the possibility for foreigners to freely exchange the national currency for any foreign one at the official rate.

Achieving the convertibility of the national currency favorably affects the trade and balance of payments of the country, and its stability forces national producers to compete internationally by reducing costs and improving the quality of products.

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