Economic cycles: concepts and reasons. Economic cycles

Causes of cycles and types of cycles

Types of cycles

To date economic science Disasters several types of cycles. The most elementary of them are annual, which are associated with seasonal fluctuations under the influence of changes in the natural climatic conditions and the time factor.

Short-term cycles, the duration of which is estimated by 40 months, i.e. Few over 3 years, due to alleged oscillations of world gold reserves. This conclusion was made in relation to the conditions of the domination of the Golden Standard.

Medium-term, or industrial cycles, as showed more than 150-year-old world practice, may have a duration within 7-12 years, although their classic type covers an approximately 10-year period. This type of cyclic development is a further object of our analysis. It is associated with a multifactor model of violation and restoration of economic equilibrium, proportionality and balance national economy.

Building cycles cover the 15-20-year period and are determined by the duration of the renewal of fixed capital. In this regard, it can be said that these cycles tend to reduce under the influence of NTP factors causing moral wear of the equipment and conducting accelerated depreciation policies.

Large cycles have a duration of about 50-60 years; They are called mainly by the dynamics of NTP, on the more detail below.

Phases of industrial cycles

Consider more complete so-called industrial cycles. In the cycle, the economy passes certain phases (stages), each of which characterizes a specific state. economic System. These are the phases of crisis, depression, revival and lifting. In Western Economic Literature, these states national Economy Received an adequate reflection in such concepts as a decline, intensity (lower point), lifting, production peak (highest point). The graphical interpretation of the economic cycle is presented in Fig. 30.1.

Fig. 30.1. Economic cycle and its phase

Let's stop by brief description Each of the above-mentioned phases of the cycle.

A crisis

The crisis is an internal mechanism for the violent adaptation of the size of social production to the volume of solvent demand of economic entities. This is universal overproduction, deep shocking of the entire economic system from top to bottom.

The demand for cash capital drops sharply in contrast to the phase of the crisis, when many commodity producers have experienced a real "hunger" for monetary resources. The "hurricane" crisis already swept over the field of economic activity, having experienced the sustainability of the enterprise. The problem of survival or bankruptcy has already been solved and confused. As a result, an excess appears cash capitalLevel interest rates And the cost of securities fall. The specificity of the motion of interest rates and the cost of securities is that, despite the drop in interest rates, the course of securities is not growing. This is explained by the work of production, which does not provide dividends. At this phase, the division of actually functioning capital is completed through channels of fictitious capital movement by buying control packets Shares of weaker competitors.

Revival

The revival is associated with the activation of economic activities, a partial update of fixed capital, an increase in production volumes, raising the level of prices, profits and interest rates, the adaptation of the economy to the newly generated price level. The duration of this cycle phase is predetermined by the achievement of the level of social production (GNP, GDP), which corresponded to the pre-crisis state. At this phase, the unemployment rate is somewhat reduced, the capital circuit is accelerated, the demand for credit increases, interest rates increase. The prices and profits of enterprises are beginning to grow, promotion courses and other securities increase, which acquires significant scales.

Climb

The rise is determined by the continuation of economic growth started at the preceding phase, the achievement of relatively employment, the expansion of production facilities, their modernization, the creation of new enterprises. Interest rates continue to rise under the influence of investment growth. Despite the increase in the level of interest rates, an increase in the course of securities is also occurring, as the growth of enterprises' profitability is positive. In addition, the high yield of securities provokes an increase in investments in fictitious capital.

Special role At the lifting stage, shopping capital performs, which, seeking to purchase more products, based on a further increase in prices, forms a speculative demand boom that it pushes the production to further expansion it. As a result, the gap between the production and solvent supply of the population begins.

I and II divisions in the industrial cycle

Special attention in the framework of the study of the cycle deserves various reactions of industries and production plants, on the one hand, means of production, primarily a means of labor, on the other - consumption items. This is due to the fact that the industries that produce means of production are characterized by a longer production cycle. Due to a rather long investment period and the rupture between the initial and final stages of the enterprise production process of such industries, the order portfolio is in advance to ensure the implementation of manufactured products. By virtue of these objective circumstances, they react slowly to changing market conditions. At the first symptoms of the decline in the production and catch-up of the economy in the phase of the crisis of the industry for the production of means of production,

despite the distinct symptoms of unfavorable macroeconomic conjuncture, the investment and production process continues on the basis of previously formed portfolios of orders, which aggravates the growing crisis situation.

The different nature of the investment and production processes in the production sectors of consumption and means of production affects the economy output from the depressive state. Industries that produce consumer items seek to increase product release, while the branches for the production of products are only proceeding to the formation of orders portfolios. This in a certain way restrains the more dynamic development of the national economy on the revival phase.

Types of crisis

Depending on the nature of economic recession, the coverage of various spheres or sectors of the national economy, it is necessary to distinguish the following types of economic crises: cyclic, intermediate, structural, partial, sectoral.

Cyclic crises are periodically recurring discdons of social production, causing the paralysis of business and labor activity (activities) in all areas of the national economy and gives rise to a new cycle of economic activities.

Intermediate crises are sporadically emerging discdons of social production, which for a while interrupts the stages of revival and lifting the national economy. In contrast to cyclic crises, they do not give the beginning of a new cycle, worn local character and short.

Structural crises are associated with a gradual and long-term increase in inter-sectoral imbalances in public production and are characterized by the inconsistency of the established structure of the social production by the changed conditions for the efficient use of resources. They cause long-term shocks and require for their permission relative to a long period of adaptation to the changed conditions of the process of public reproduction.

A vivid example of a global structural crisis can serve as an energy crisis developed in the mid-70s, which demanded more than 5 years to adapt the national economies of industrialized countries to the new energy price structure (the price jump exceeded 4-5-fold growth). As a result, both technologically, and financially, and economically national economies were forced to focus and adapt the industry and production to energy-saving technologies and changes in the structure of energy consumed.

Partial crises are conjugate with the fall of economic activity within the framework of large areas of activity. In particular, we are talking about monetary circulation and loans, banking system, stock and foreign exchange markets. The global currency crisis of the 70s., As you know, led to the transition from the Bretton Woods Monetary System to the Yamaican (Kingston) Agreement of 1976, in accordance with which gold ceased to fulfill the role of world money and turned into one of the goods. Well known and the largest crisis banking system Germany 1932

Sectoral crises are characterized by decays of production and coagulation of economic activities in one of the industries, the national economy. The history of such crises is most often traced in the coal, steel, textile, shipbuilding industry.

Seasonal crises are due to the impact of natural climatic factors that violate the received rhythm of economic activity. In particular, the delay with the onset of spring can cause a crisis in municipal farm Due to the lack of fuel.

The global crises are determined by the coverage of both individual industries and the spheres of economic activity on a global scale and the entire world economy.

Features of economic cycles

Classic cycle

Moreover, the most profitable enterprises were privatized, many of which they soon replenished the ranks of unprofitable.

Briefly call the most important of the reasons economic crisis:

• liquidation of centralized management of economics and the formation of a monopole bureaucratic system without mechanisms and skills of state indicative planning and regulation;
• liberalization of economic relations in the structural dominance of monopolized and oligopoly market structures;
• price liberalization, depreciable savings (decisive source of investment financing) and deprived the country of investment resource;
• liberalization of foreign economic relations of the country, which contributed to the deterioration of domestic production, an increase in foreign exchange debt, catastrophic washing of gold and foreign exchange reserves, as well as operating "gateways" for leakage of domestic capital;
• collapse financial systemwhich supplemented the collapse of the production sector;
• anti-inflation activities are not open, but an depressed nature (non-payment of government orders, non-payment or delay for months or even years of wages) that entrust the charge of the suppression of aggregate demand, and consequently, both coagulation of production.

It should be noted that no countries of the West during the transition from Neokensian to the neoconservative model of development did not resort to such radical measures and in terms of time, and scale as it happened in the country where the centralized management system was dominated. At the same time, no development of the economy was declared as a target plant social problems, improving the well-being of the nation, and the fight against inflation, financial stabilization, the formation of a banking system, stock market, i.e. What is a means was issued for the purpose of reforming. Hence the results. At the same time, the ideological installation - "to prevent return to the past" played the defining role. The price of this installation is the collapse of the economy, the degradation of society.

Large cycles

Within the framework of large cycles, the exit from such a situation is associated with structural shifts in the national economy, accompanied by modifying the economic mechanism. This causes the activation innovative activity, the use of new technologies in traditional industries and industries, motioning those of those who have retained an outdated technical basis, as well as improving the forms and methods of organizing and managing production at the level of both individual enterprises and their associations and industries and public economic complexes.

Technological shifts cause the market for a multitude of innovations that cover literally all elements of economic relations and their interaction. As a result, the more capacious market is gradually formed first for production factors, and then for the entire spectrum of the corresponding new requirements of products and services. The more efficiently new technologies, the wider they distribute in production, and the more extinguishes the market of final products and stronger the impulse defined by the innovation of the entire economy, the more successful accumulation process real capital, above its level of efficiency or performance. This is the result of the stage of development, in general, ensuring the growth of the economy and its well-being for decades. With such logic of development embodied in long waves, the entire process of cyclic dynamics is linked.

In conclusion, we pay attention to the fact that long waves exist (statistically proven), but in theoretical plan more postulates than evidence of this. N.D. Kondratyev tied large cycles with the movement of the main capital debt, the change of which is allegedly carried by the impetus. But the question of smoothness or jumpsuit remains open, for it is unclear the reason for "jogs".

conclusions

1. Economic development is inherent cyclicity, which is characterized by the repeatability of recession and production raises. Medium-term, or industrial cycles cover a period of 7 to 12 years. The industrial cycle includes phases of crisis, depression, revival and lifting. The crisis is characterized by coagulation of economic activity in the entire economy or the overwhelming part, as well as overproduction of capital in one form or another. For depression, stagnation of economic activity is characteristic. The revival is inherent in some promotion of this activity, accompanied by the gradual "resorption" of inventories and resources. The recovery stage continues until the economy reaches the production volume corresponding to the pre-crisis period. Then the economic lift begins, accompanied by the growth of demand both on goods and services and resources.

2. The following types of economic crises are distinguished: cyclical, intermediate, structural, partial, sectoral. The cyclic crisis expresses repeated decals of social production. The intermediate crisis occurs within the framework of the industrial cycle and is interrupting either the phase of revitalization or the lifting phase. The structural crisis is characterized by the inconsistency of the established structure of the social production by the changed conditions for the efficient use of resources. The partial crisis covers certain areas of economic activity (for example, the financial crisis, the crisis of the banking system). Industry crises are characterized by a decrease in production in one of the industries, the national economy. The global crises, covering both separate industries and the spheres of economic activity on a global scale, and all the world economy are occupied by a special place.

3. For each stage historical Development The capitalist economy is characterized by certain features of both the proceedings of the economic cycles themselves and economic crises. It may be sluggish lifts and sharp, deep decals and, on the contrary, sluggish current decosals and intense, long-lasting lifts. Also, crises can be characterized by overproduction of the commercial, then productive capital (production capacity).

4. The cyclic nature of the development of the market economy objectively necessitates the need for its anticyclic regulation, which involves the use of a whole system of methods and methods for impact on economic situation, activation or deactivation economic activity. Anticyclic regulation includes funds both direct and indirect direct impact on the economy.

Today we will consider one of the most important concepts of the economy - economic cycle. After reading this article, you will learn what economic cycles are what kinds of which they are from which phases consist, which represent all phases of the economic cycle, which processes and phenomena occur in each phase, etc. I think that it is just necessary to know and understand everyone to better navigate in the economic situation in which he, directly, lives. So, about everything in order ...

What is an economic cycle?

Economic processes occurring in a separate country in the region, or even in the world, cyclical. That is, in the economy, as in many other areas of the surrounding world, is one an important rule: "Story is repeated." This means that the processes and phenomena associated with the economies of the state affecting it, periodically replace each other, and can be worn both positive and negative.

The economic cycle is a period of development consisting of several phases, combining alternating growth and a fall in the economy and achieving its peak points.

And what is the growth and fall of the economy? This is a change in its real GDP, that is, production growth without rising prices. Thus, the economic cycle is the time interval between the upper or lower peak values \u200b\u200bof the real GDP Countries.

In fact, each economic cycle combines a variety of states of the country's economy: very good, very bad, deterioration and improvement occurring between them.

The cycles of the economy can be ascending and descending: this parameter is determined by the global trend of the country's GDP.

Economic cycle - This is a cycle at which the next GDP peak is higher than the previous one.

Downward economic cycle - This is a cycle in which the next GDP peak is below the previous one.

Causes of economic cycles.

Why do economic cycles occur? There are two theories: one of them suggests that they inevitably arise under the influence of objective reasons accompanying any economic growth or decline, the other thing is that the cause of economic cycles serve, rather random factors. Personally, I adhere to the first point of view, and I think that economic cycles are inevitable: no matter how strong is economic growth, it will once again reach his peak, after which the fall follows, and vice versa.

If we consider the causes of economic cycles, then largely depend on the specific country in question. For example, in countries with a high level of industrial development, economic cycles arise, due to the development of new technologies or significant change in energy prices. And in countries with an agrarian bias, the causes of the new economic cycle can be banal weather conditions and a crop / crouch due to them.

The reason for the change of the economic cycle is also often some force majeure situations: war, revolution, mass riots, as well as the change of government or the ruling party, changing the political course, a change in economic policy, etc.

Phases of the economic cycle.

Schematically, economic cycles can be represented as a graph.

In this example, we see the aspic cycle, with the descending order there will be the same picture, only with a trend down. The graph shows 4 the main phases of the economic cycle:

1. Recession.
2. Climb.

Now consider each of them in more detail.

Peak (vertex). This is the phase of the economic cycle, characterized by the maximum performance of the state economy. At the peak, the volume of real GDP economy is maximal. When the country's economy reaches its peak, unemployment goes to a minimum, there is a maximum activity in business, the maximum inflow of investment in the economy, and the growth rate of production is ahead of inflation. At the same time, it is simply not possible to increase the production of production for various reasons: there are not enough resources, capacities or sales markets. Therefore, the peak of the economic cycle, as a rule, continues not long.

Recession (recession). Behind the peak always inevitably comes the next phase of the economic cycle - a decline or, as it is also called, recession. Moreover, in time, it usually continues significantly longer: the decline can be very protracted and have a different strength in different time intervals. During recession, production volumes begin to decline, and real, and nominal GDP, unemployment is growing, .

Bottom (depression, stagnation). The most unpleasant for the economy of any country and its citizens phase of the economic cycle. At the bottom, the country's real GDP reaches its minimum values, and the unemployment rate is maximum. When the economic cycle passes its bottom, the so-called often occurs in the country. . Many productions and other forms of business are closed, mass dismissal occurs, the demand, consumer activity, in the state, its business structures and citizens accumulate debts. It is when the economic cycle passes the bottom that the maximum risk comes in the country, and sometimes it happens. It is believed that the bottom, like peak - short-term phase of the economic cycle, however, the story knows the exceptions to this rule. For example, the famous Great Depression, which covers a number of leading countries continued for about 10 years.

Lifting (revival). This is the most favorable phase of the economic cycle, in my opinion, even more favorable than peak. Because the peak is short, and the rise may last for years. When there is a clearly expressed trend on an economic rise - it is always favorably reflected in the state as a whole, and on each of its business structure, and on each resident separately. Real GDP is growing in the rise, the unemployment rate is reduced, investments are flowing into the country, business develops, growing purchasing power population. The rates of inflation in the recovery phase of the economy are always optimal (lower than the growth rate of production), because this phase is realized by the so-called. "Deferred demand", which emerged during the previous decline and bottom.

Types of economic cycles.

At the beginning of the article, I already wrote that economic cycles are rising and descending. When we consider the types of economic cycles, then most often share them in time of their existence:

• short-term (1-3 years);
• medium-term (3-15 years);
• long-term (over 15 years).

What is important, inside the long-term cycle may exist their medium-term and short-term - as a rule, it happens. That is, for example, in the middle of global lifting will be their short-term revives and decals, peaks and depression.

Now you have a sufficient idea of \u200b\u200bwhat economic cycles are why they arise and how they pass. For a simple alone, it is very important to know which phase and in which fragment it is currently its country is, to plan their own, based on this. So, for example, if we are talking about the beginning of the rise, then this is the time to invest, creating sources passive income, business opening. And if the economic downturn began and the bottom is approaching - it is necessary to maximize its capital, bring it out of risk assets, start hard to save, abandon major spending, increase the reserve fund, etc.

That's all. Join the number of regular readers of the site, and learn more competently and effectively manage personal finances and family budget. To new meetings on the pages of the site!

Bibliographic Description:

Nesterov AK Cyclicity of the development of the economy [Electronic resource] // Educational Encyclopedia Website

The development of a market economy is not straightforwardly, but on the helix, each turn of which is called a cycle. There are certain patterns of these cycles. Consider the concept of cyclical development of the economy, phases and causes of economic cycles.

The development of the national economy in the conditions of the market is not straightforwardly, but waving. The essence of the development cyclicity is expressed in a certain pattern of alternation of the heyday of the economy and the rapid growth of production with periods of sluggish economic situation and slow production growth or even its absolute reduction.

There are certain patterns of cycles of alternation of these periods. In each of the cycles, the same phenomena are repeated. Their alternation made it possible for their study and marked the beginning of attempts to predict new cycles.

Cyclic economy development It is very controversial, which served as the basis for the appearance of a large number of points of view on this problem among economic scientists. But still lacks a single cyclical concept, which undoubtedly talks about the importance of this phenomenon for the economy.

The study of cyclicity, as a certain fundamental phenomenon in the dynamic development of the market economy, began in the nineteenth century. It continues today. Foreign and domestic economists are trying to develop methods for predicting the flow of each cycle so that each phase does not harm the economic development of society.

Cyclicity as an economic pattern recognize not all scientists. However, real life confirms the existence of this process, and cyclicity as a problem can not not be interested in a modern person.

The concept of cyclicity:

The cyclicity is a form of development of the national economy and world economy as a whole, this movement from one macroeconomic equilibrium on the scale of the economy as a whole to another.

One of the first economists who began studying cyclicity was K. Marx. He allocated four phases of the economic cycle: Crisis, depression, recovery, rise. The classic political economy proceeded from the situation that the economy may and should be constantly in a state of equilibrium, and the problem of cycles did not do, moreover denied their existence. In addition, K. Marx was the author of the devastating for capitalism economic theorySo his contemporaries did not deal with them, but refuted all his arguments. Only after J. M. Keynes substantiated the need to regulate the market economy by the state due to the cyclic nature of its development, a detailed study of the nature of cycles and mitigation methods rendered to the crises to the economy began.

In modern Russian conditions, the relevance of the problem of cyclic development of the economy has a particularly acute meaning.

Cyclic nature of the development of the economy

The cyclic nature of economic development is manifested in the consequences of cyclicity, which can be divided into negative and positive.

Negative consequences of the cyclical development of the economy:

1. The crisis phase of the economic cycle is a tragedy for many firms, minor manufacturers and especially for ordinary people. During this period, for example, the level of suicides is even increasing.
2. As a result of periodic industrial crises, a large number of entrepreneurs and simple consumers suffer.
3. Production carries significant losses.
4. During the rise in the growth of production, the foundations for the next crisis are laid, and the better the situation looks in the rise period, the worst of the consequences of uncontrolled growth during the crisis.
5. A strong crisis can cause both the country's economy at the post-crisis level for a long time.

Positives of the cyclicality of economic development:

1. From the point of view of macroeconomics, in each cycle, crises mean the death of small commodity producers, technologically weak, inefficient industries that can be called disease on the body of the economy, and survival of the strong, most competitive, with an excellent organization of industries, enterprises.
2. Crises also heal the capitalist economy, with each cycle forcing it to ascend to a new technical level, to achieve greater proportionality of economic development.

The laws of the cyclical development of the economy can not be ignored or assumed that crises are caused only by external or incomprehensible factors. The cyclicity is a form of development of the national economy and world economy as a whole, this movement from one macroeconomic equilibrium on the scale of the economy as a whole to another.

In fact, cyclicity is the so-called "sanitary" of the economy, which cleans all the dieting and helping everything in a viable in the economy.

To smooth out the destructive effects of cyclicity, it is impossible to do focus only on theoretical studies. It is necessary to analyze the statistical material for the entire period of cyclic development of the economy, to investigate the reasons that led to a particular crisis in the past.

The cyclic nature of the development of the economy means that the rapid growth of production at a certain period of time is replaced by its crisis, after which economic growth is again.

Causes of cyclic development of the economy

The enormous impact of the cyclic development of the economy forced economists to seek the causes of cyclicity, in order to learn to predict the development of each specific cycle. This desire is clear, because if with a sufficient degree of reliability to predict the development of one or another phenomenon, it is possible to determine the degree of its influence on each person individually and the whole society as a whole. Predict possible development The cycle can only find out the causes of cyclicity.

Causes of cyclicity, like the emergence of any other processes in the economy, must be sought in the economic activity of people.

For example, J. M. Keynes considered the crisis in the economy of excess savings in the population and the lack of investment in production, which causes the occurrence of cyclicity and economic cycles. It follows the theory of absentia, according to which crises and depression are caused by the fact that too much of the current income is saved, and not invest in production. The reason for too large savings is an uneven income distribution. Only the one who has large income can save.

Another important cause of crises, as a source of cyclicity of economic development, is the excess of the production of means of production over consumer goods. This question occupies a central place in the theory of surplus. "Industries manufacturing manufacturing goods are exposed to the economic cycle much more than industries that produce everyday demand goods. In the upgrading phase of the economic cycle, the production of industrial goods is growing, and in the downward - reduced much more sharply than the production of short-term use products." It is this disproportion of the production of goods, according to the theory of overcover, and causes a crisis. According to this theory, in the conditions of the planned system, this reason turns the economy into self-selected when it starts to function for the production of production tools, while the production of consumer goods is moving into the background.

K. Marx also engaged in the development of the causes of the cyclicality of the economy. Marx derived the following cyclic causes:

1. Contradiction between production and consumption.
2. The high level of production organization at individual capitalist enterprises is confirmed with an unregulated, natural effect market system generally.
3. The physical life of the main capital.

The first reason for cycles is due to the fact that the desire for a limitless expansion of production for the sake of greater enrichment is the main purpose of any entrepreneur. They apply the introduction of new technologies, reducing costs for the production of a unit of goods to increase productivity. Incentive for this is market competitionA peculiar natural selection in the capitalist environment. In this case, demand is also growing, but, alas, he is lagging behind production growth, and at some point produced goods do not find demand from buyers, which causes a crisis.

The second cause of cyclicity also leads to excessive production growth, but in contrast to the previous one, it is more susceptible to neutralization.

The third reason for the cyclicity of the economy is the need to update fixed capital. Updating fixed capital every 10-12 years in the XIH century and every 7-8 years in the twentieth century coincides with the phase of revitalization in production. It is this reason that is a periodic updating of capital - and sets the temporal parameter of the economic cycle.

Among the large number of other reasons for cycles, three most significant are allocated.

1. The difference in the time of capital circuits in different industries and their relationship.
2. Circulation capital in some industries contributes to the development of capital circulation in other industries, actually making the development of some industries dependent on the development of others.
3. Therefore, in case of any, even if not very serious changes in the development of one industry, the development of other industries can respond to this arising crisis.

In modern conditions, a sharp problem is a debt burden, which also acts as the cause of the economic crisis that determines the onset of the new cycle. Therefore, "Another important reason for the occurrence of crises may be the sale of goods and services on credit. For some reason, mass defaults may begin, which will inevitably provoke the crisis." The crisis of non-payment in the literal sense of the word does not allow to survive, functioning enterprises. This causes managers of enterprises to close them and stop production. As a result, the unemployment rate is growing, and the salary falls. All this causes urgent goods. The overproduction crisis begins. But the crisis and unemployment are interconnected and determine each other.

Of particular the cause of cyclical economy is related to its militarization. In the period of war or preparation for them, an increase in investment is played military sphere. Militarization of the economy delayed funds from industries that produce consumer purposes. As a result of finishing outflow from these industries, where they could also reduce the level of unemployment and increase the capacity of the market, the deficit of goods, depreciation begins money population due to starting inflation. In addition, investment in the economy ceases, the economic development of economic development or even its stop or stagnation occurs. A household peculiarity of the processing of economic development can be considered a replacement in the lexicon of people the words "buy" for the word "get".

Considering the reasons for the cyclicity of the capitalist economy can not be emphasized on some one of them. It is quite natural that the reasons are unequivocal, but only together they are the basis for the cyclical development of the economy. All these reasons each time occupy a different position in provoking a crisis and lead to a change of the economic cycle.

The development experience of countries with a developed market showed how high the price of a high level of consumption: the waste of resources, irrational capital use, a malfunction between human activity and its environmental environment.

A number of factors inhibits the course of social development:

• the unbalance of scientific and technical, economic, environmental and social components of economic growth;
• exhaustion of the possibilities of the economy regulation systems;
• weakening incentives for work and accumulation.

All these reasons were reflected in the demographic, environmental, energy, commodity, food and structural crises against the background of the cyclical development of the global economy. With various varieties of these global crises collided and russian economywhich experienced their many negative consequences exacerbated by the nature of the functioning of the economic system.

For the successful confrontation of the negative consequences of cyclicity of economic development, the following factors are necessary:

1. The country must have developed factors of production, prevent significant structural disproportions and systemic problems of an internal nature.
2. The inertial and extensive nature of economic development should be combined with the introduction of innovative technologies, an increase in labor productivity and standard of living.
3. In the circuit of the economic system must prevail industrial enterprises different industries, the production of goods and services should be diversified, agriculture must provide more than 80% of internal consumption.
4. The heavy industry and enterprises of the military-industrial complex should provide production for internal use and export.

Implementation of these conditions, taking into account the scale of the economy, allows you to minimize the impact negative consequences crises in the framework of economic cycles, taking into account the revealed causes of cyclicity.

Output

Considering the reasons for the cyclicity of the development of the economy and the individual fundamental features of economic growth, which are non-linearity, unevenness, uncertainty, alternativeness, etc., it can be noted that they determine the key role of scientific and technological progress in ensuring modern economic growth.

Literature

1. Keynes J. M. Selected Works. - M.: Economics, 1993.
2. Sazhina MA Economic theory. - M.: Infra-M, 2007.
3. Salikhov B.V. Economic theory. - M.: Dashkov and K, 2014.
4. Shishkin A.F. Economic theory: in 2 kN. Kn. 1. - M.: Vlados, 2002.

(characteristic period - 2-3 years);

Phase

In cycles of business activity, four relatively clearly distinguishable phases are distinguished: peak, recession, bottom (or "lower point") and lifting; but in favor more than These phases are characteristic of Jewor's cycles.

Business Cycles in Economics

Climb

Climb It comes after reaching the lowest point of the cycle (bottom). It is characterized by a gradual increase in employment and production. Many economists believe that this stage is inherent in low inflation rates. Innovation is being introduced in the economy with a short payback period. Demand is realized, pending during the previous recession.

Peak

Peak, or the top of the business activity cycle is the "highest point" of the economic lift. In this phase, unemployment usually reaches itself low level Either disappears at all, production facilities work with a maximum or close load, that is, in production, almost all in the country of material and labor resources are involved. Usually, although it is not always, inflation is enhanced during the peaks. The gradual saturation of the markets strengthens competition, which reduces the rate of profit and increases the average payback period. The need for long-term lending with a gradual decrease in loan repayment opportunities is increasing.

Recession

The concentration (monopolization) of capital leads to "erroneous" solutions on the scale of the country's economy or even the world. Any investor seeks to receive income from its capital. Waiting for an investor in the size of this income occurs from the rise stage when the maximum income. At the stage of the decline, the investor considers it unprofitable for himself to invest capital in projects with a yield below "yesterday's".

Without such investments (investments), production activities are reduced, as a result of the solvency of employees of this sphere, which are consumers of goods and services of other spheres. Thus, the crisis of one or several industries is reflected in the entire economy as a whole.

Another problem of capital concentration - seizure cash (money) from the sphere of consumption and production of consumer goods (also and the production of means of production of these goods). Money obtained in the form of dividends (or profits) accumulates in investor accounts. There is a lack of money to maintain the necessary level of production, and as a result, a decrease in the volume of this production. The unemployment rate is growing, the population saves on consumption, demand is dropped.

From the sectors of the economy, the scope of services and industries, which produce the goods of short-term use, are somewhat less affected by the devastating effects of the economic downturn. Recession even contributes to the intensification of certain types of activities, in particular increases the demand for pawnshops and lawyers specializing in bankruptcies. The most sensitive to the cyclic fluctuations of the company, producing products of production and consumer goods of long-term use.

These firms are not only heavier than others tolerate the business decline, but also the most benefit from the rise in the economy. The main reasons are two: the possibility of postponing purchases and monopolization of the market. Purchase of capital equipment most often can be postponed for the future; In severe time, the manufacturers tend to refrain from purchasing new machines and equipment and the construction of new buildings. During a long downturn, the company often prefer to repair or upgrade outdated equipment, instead of spending big funds for the purchase of new equipment. As a result, investments in manufacturing goods during economic recessions are sharply reduced. The same applies to consumer goods for long-term use. Unlike food and clothing, buying a luxurious car or expensive household appliances You can postpone until better times. In periods of economic recession, people are more increasingly inclined, and not changing the goods of long-term use. Although the volume of food sales and clothing, as a rule, are also reduced, this reduction is usually less compared to the fall in demand for durable goods.

The monopoly power in most industries that produce products manufacturing and consumer goods for long-term use are related to the fact that few large firms dominate in the markets of these goods. The monopoly position allows them during economic reservoirs to maintain prices at the same level, reducing production in response to falling demand. Consequently, the fall in demand is much more affected by production and employment than prices. The situation is characteristic of industries producing short-term consumption. For the fall in demand, these industries usually react with a total price reduction, since none of the firms have a significant monopoly power.

History and long cycles

Economic cycles are not genuinely "cyclic" in the sense that the duration of the period, let's say, from one to another peak throughout the story hesitated significantly. Although the economic cycles in the United States lasted an average of about five years, cycles are known for a duration of one year to twelve. The most pronounced peaks (measured as a percentage increase over the trend of economic growth) coincided with large wars of the 20th century, and the deepest economic downturn, excluding the Great Depression, was observed after the end of the First World War. It should be noted that along with the described economic cycle, the theory also distinguished. Long cycles. Indeed, at the end of the 20th century. The American economy, apparently, entered into a period of a long downturn, which is evidenced by some economic indicators, in particular, the level of real wages and volume net investment. Nevertheless, even if there is a long-term tendency to reduce growth rates, the US economy continues to evolve; Although in the early 1980s, a negative increase in GDP was registered in the country, in all subsequent years, except 1991, he remained positive. Syptomatic for the long-term recession began in the 1960s is the fact that, although the growth rates were rarely negative, the level of economic activity in the United States from 1979 almost never exceeded the trend value of growth.

Notes

see also

• Noorithms

Literature

• Kondratyev N. Large cycles of the conjuncture and the theory of foresight. Selected works / m. : Economy, 2002
• Askar Akayev: modern financial and economic crisis in the light of the theory of Kondratyevsky cycles

Links

• Economic Cycles // Online Encyclopedia "Circlevet"

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Watch what is "economic cycles" in other dictionaries:

The term denoting regular fluctuations in the level of business activity from the economic boom to the economic recession. In the cycle of business activity, four clearly distinguishable phases are distinguished: peak, recession, bottom, or lower point, and lifting. Peak, or top ... ... Encyclopedia Color

Economic cycles I. national income (English Business Cycles and National Income, 1951) Work of the American Economist E. Hansen (1887 1975). Contents 1 Structure 2 Contents ... Wikipedia

- (English Business Cycles and National Income, 1951) - the work of the American economist E. Hansen (1887 1975). Contents 1 Structure 2 Contents 3 Translations 4 ... Wikipedia

Economic Cycles Cycle Name Characteristic Cycle Cycle Kitina 3 4 years Cycle Jewor 7 11 years Cycle Blacksmith 15 25 years old Condratyev cycle 45 60 years Condratyeva cycles (to cycles or to waves) Periodical cycles of a modern world economy ... ... Wikipedia

In fact, the development of the economy does not occur in a straight line (trend), which determines economic growth, but with a constant deviation from the trend, with recession and lifts, i.e. Cyclically (Fig. 1). Business or Economic Cycles (Business Cycle) - Periodic Lifts and decals in the economy, as well as vibrations of business activity. These oscillations are unpredictable and irregular, therefore the term "cycle" here is used sufficiently conditionally.

The cycle has two extreme dots:

• Point of peak (PEAK), which corresponds to a maximum of business activity.
• Point of bottom (trough) corresponding to a minimum of business activity, i.e. Maximum recession.

As a rule, economic cycles are divided into two phases. The first phase is called the phase of the recession or recession (Recession) and it lasts it from the peak to the bottom. With a long and deep decline, depression arises (depression). The second phase is called the lifting or revival phase (recovery), and it continues from the bottom to the peak.

In addition, there is another approach that shares the economic cycles into four phases. However, there are no extreme points here, since it is believed that when the maximum economy is achieved or a minimum of business activity, it is in this state a rather long period of time. So:

• I Phase - Boom (Boom), is characterized by maximum activity in the economy. This is a period of supervollability and inflation. In this state, the economy is called "overheated" ("overheated economy").
• The II phase - dechesion or Slump, is characterized by a gradual return of the economy to a trend level, a reduction in the level of business activity, approaching actual GDP to its potential level and fall below the trend, which translates the economy into the third phase.
• III phase - crisis (crisis) or stagnation (stagnation). There is a reference gap in a state of the economy, in which actual GDP is below the potential. This period is characterized by short-use economic Resources. High unemployment.
• The IV phase is the revival or lift in which the economy begins to gradually leave the crisis state, and the actual GDP grows to a potential level, after which it exceeds it, seeking to achieve a maximum that returns the situation to the first phase.

Causes of economic cycles

In economic theory, economic cycles arise due to the most different phenomena: the level of solar activity, revolution, military coup, presidential elections, high population growth rates, insufficient consumption level, investor mood, price shocks, technical and technological innovations and much more. In fact, everything ever listed reasons You can combine into one - the discrepancy between the total demand and the proposal, as well as the total costs and production volume. In this regard, the cyclical development of the economy can be explained by several aspects. First, this is a change in total demand with a stable value of the aggregate supply. Secondly, this is a change in the aggregate proposal in the stable value of aggregate demand.

Suppose economic cycles arise due to changes in total demand or consumption. Consider an example of how these indicators will behave on each phase of the cycle (Fig. 2. (a)).

The boom phase is characterized by the onset of the moment, in which it will not be possible to sell the entire production volume, i.e. Cumulative expenses will be lower than the release. As a result, one appears, which leads to an increase in stocks in enterprises. This in turn leads to coagulation of production, which is the cause of the dismissal of workers and the growth of unemployment. As a result, the cumulative income and, therefore, the cumulative consumption is reduced. First of all, such economic cycles appear in reducing the demand for long-term goods and the fall in the demand of enterprises on investment, which leads to a reduction in the short-term interest rate. As a rule, in such conditions, the long-term rate increases through the sales of bonds in conditions of reduced income and lack of cash. Reducing the cumulative income reduces tax revenues to the state budget, which leads to an increase in the magnitude of state transfer payments and deficiency state budget. Enterprises are trying to realize their products by reducing prices, which leads to deflation.

Soon, enterprises face a situation where products are not sold even at lower prices. In this case, the company can resort to several solutions. First, it is the acquisition of more productive equipment, which will continue to continue the production of goods with less costs. Thus, the company will be able to reduce the price of products without reducing the magnitude of the profit. Secondly, the company can make the production of a new type of goods that requires technical re-equipment. In both cases, it is possible to achieve an increase in demand for investment goods, which will allow to expand production in industries that produce investment goods. As a result, in this area there is a revival, which leads to an increase in employment, an increase in the profit of the enterprise, an increase in total income. With income growth, the demand in industries that produce consumer goods, and the production of these goods is expanding. These processes gradually cover the entire economy. Thus, economic cycles are moving to the lifting phase.

With increasing demand for durable goods and investment, the cost of the loan occurs, i.e. Grows the short-term interest rate. At the same time, there is a decrease in the long-term interest rate, as the demand for bonds is growing and prices are rising securities. Grow price level. Increases tax revenues. Transfer payments are reduced. The deficit of the state budget decreases, which makes it possible to appear the surplus. With the rise of the economy and the growth of business activity, economic cycles go to the "overheating" phase of the economy, which leads to the next recession.

So, economic cycles are based on the change in investment costs, since investments are the most unstable part of the total consumption (total demand).

In Figure 2, economic cycles are presented graphically by the AD-AS model. Figure 2 (a) shows an economic cycle with a change in the total demand (total expenses), and in Figure 2 (b) is an economic cycle with a change in the aggregate supply (total release).

It is worth noting that in the conditions when the cause of the decline in the economy is to reduce the aggregate supply, mainly all indicators behave in the same way as in the case of a reduction in total demand (total flow). The exception is the indicator of the total price level, which grows with the deepening of the recession. This situation is called "stagnation" and is characterized by simultaneous decay of production and increase in price level. From such a decline, they take out, as a rule, at the expense of investments that increase the stock of capital in the economy and allow you to grow a cumulative proposal.

Indicators of the economic cycle

An indicator of the economic growth rate (Rate of Growth - G) is the main indicator of the phase of the cycle. Its calculation is carried out according to the following formula:

g \u003d [(yt - yt1) / yt1] x 100%, where

Yt - real GDP of the current year,

YT1 - Real GDP of the previous year.

Thus, the economic cycles of this indicator are characterized as percentage Real GDP in each subsequent year in comparison with the previous one. If this value is positively, the economic cycles are in the lifting phase, otherwise - in the recession phase. The calculation of this indicator is conducted once a year, and the value is used to characterize the rate of economic development.

In addition, economic cycles at different phases are characterized by various indicators that depend on the behavior of economic quantities. Among them are distinguished:

• Procyclic indicators that grow in the lifting phase and fall in the recession phase (sales, the amount of total revenues, real GDP, the profit of firms, the volume of imports, the volume of transfer payments, the value of tax revenues).
• The counter-cyclic indicators that grow in the decline phase and fall in the lifting phase (the magnitude of the reserves of firms, the unemployment rate).
• Acyclic indicators whose value is not related to the phases of the cycle, as they do not have a cyclic nature (export volume, depreciation rate, tax rate).

Types of economic cycles

Classified economic cycles depending on their duration:

• centenary cycles whose duration is a hundred years or more;
• Condratyev's cycles, which last 50-70 years. They received their name from an outstanding Russian economist N.D. Kondratieva, who developed the theory of "long waves of economic conjuncture";
• classic cycles lasting 10-12 years and characterized by a mass update of fixed capital;
• kitina cycles, whose duration is 2-3 years.

Thus, economic cycles differ on different types Based on the duration of the functioning of a physical capital in the economy. For example, centenary cycles are determined by the emergence of scientific discoveries and inventions producing a real coup in production technology. Condratyev's long-wave cycles are based on the duration of the service life of industrial and other structures and buildings, i.e. On the passive part of the physical capital. "Classic" cycles are characterized by a duration of 10-12 years, during which the physical wear of equipment is observed, i.e. active part of physical capital. It is worth noting that modern conditions They put in the first place when replacing the equipment is not physical, but moral wear. In other words, over time, more productive and perfect equipment appears, resulting in the need to replace outdated equipment. As a rule, new technical and technological solutions are developed every 4-6 years, but this cycle is gradually reduced. Also, many economists noted that economic cycles on duration depend on the mass consumer renewal of long-term goods that occur with periodicity of 2-3 years.

IN modern economy It is noted that economic cycles are currently on the duration of the phases and the amplitude of oscillations can be the most diverse. First of all, it depends on the causes of the crisis and the characteristics of the economy of a particular country (the degree of state intervention, the share and level of development of the service sector, the nature of the regulation of the economy, the conditions for the development and application of the scientific and technological revolution).

It is very important to distinguish between cyclic and non-cyclic oscillations. In this regard, economic cycles are characterized by changing all indicators and covering the entire industry or sector. In turn, non-cyclic oscillations are accompanied by a change in business activity only in separate industries that wear the seasonal nature of the work, and only some economic indicators are changed.