a) reduction of unemployment benefits;
b) a decline in shares, lower demand for work;
c) reduction of tax revenues;
d) Reducing investment in equipment with a long service life.
17. To external (exogenous) reasons of cyclic development do not include ...
a) natural-climatic phenomena;
b) fluctuations in investment demand;
c) political phenomena;
d) all the answers are incorrect.
18. During the period of recession, they are most reduced ...
a) consumer spending on the purchase of drugs;
b) wage level;
c) the magnitude of entrepreneurial profits;
d) government procurement of goods and services;
e) all previous things right.
19. Economic cycle is connected ...
a) with the action of only external factors;
b) the action of only internal factors;
c) factors advantageously affecting the dynamics of total demand;
d) factors advantageously affecting the dynamics of proposals;
e) exclusively random political factors.
20. After one or two years after the end of the recession is observed ...
a) reduction in employment;
b) reducing consumer costs to buy long-term goods;
c) stability or drop in profit level;
d) all the previous one is incorrect.
Practical task 2.4.1:solving tasks on the topic of the course.
A) calculate the level of registered unemployment, based on such data: the number of labor resources in the field - 400 thousand people, the number of working-age population in working age - 1360 thousand people, the number of unemployed registered in public service Employment - 40.8 thousand people.
B) the number of employed in the economically active population - 108 million people, the number of unemployed - 32 million people. A month later, from 108 million people who had work were dismissed and are in search of work - 0.3 million people, 2 million people. From among the officially registered unemployed, the search for work has stopped.
Determine: a) the initial level of unemployment; b) the number of employed, the number of unemployed and unemployment rate in a month.
C) It is known that in the 1st year the economically active population was 100 million people.
A. Cyclic oscillations
An annual increase in the economically active population is 1 million people. Natural unemployment rate - 6%. The actual unemployment had the following dynamics: 1st year - 10 million people; 2nd year - 10 million; 3rd year - 9 million; 4th year - 8 million; 5th year - 7 million; 6th year - 6.3 million; 7th year - 6.36 million; 8th year - 6.5 million; 9th year - 7.0 million; 10th year - 8.0 million people. Based on these data, determine what was equal to these ten years full-time, natural unemployment, cyclic unemployment and actual employment.
D) in a country with a developed market economy, the inflation rate and the unemployment rate changed as follows:
Based on this data, build a Phillips curve.
E) If the price index last year was 110, and this year - 121, how will the level of inflation this year? What does the "rule of size 70" mean? How long will it take prices to double if inflation is preserved at 2%, 3%, 5%, 10% per year?
· Inflation rate for the second and third year;
· Percentage of real income, if the nominal income in the second year increased by 7% compared with the first year, and in the third year compared with the second - by 10%.
Data for calculating the level of inflation
G) answer the questions of Crossword.
a crisis
decline in economics
Alternative descriptions
Conducting contradictions in the development of society. Disorders of economic life
Acute shortage of something
Relative overproduction of goods
Resignation of Government
Peak, Fracture Disease
Sharp, cool fracture in something
Heavy transition status
Heavy position
Severe, difficult stage of development with big variables
Crucial moment
Mountain problems
Film Ingmar Bergman
This word in Chinese consists of two hieroglyphs: one means "danger", the other is "a favorable opportunity"
. "Spoon is when you have to delay the belt, and ... - when there are no pants" (aphorism)
The state of our economy in August 1998
Russian Writer's story M. Zoshchenko
One problem for another
Cool fracture
. "Bad" in the economy
Failure to economics
Big problems
All problems at once
Ombretened com
Economic Nedug
Exacerbation
Sharp, steep fracture
Happens at middle aged
Sharp improvement in the state of the patient
. … middle aged
Heavy position in the course of the disease
Exacerbation of the disease
Manya Mani deficiency in pocket
Caribbean
Cool fracture in the economy
Sharp fracture during the disease
Financial decline
Global financial ...
Heavy position in the economy
Agony Genre
Economy disease
Caribbean ... 1962
Owning economy
. "Peak" hypertension
Decline in economics and finance
Tightening diseases of the economy
Economic problems
Failure to economy
. "... middle age" (film)
Periodic disorder economy
Severe position
In medicine: a fracture in the course of the disease
Economic recession
middle age "(film)
. "Peak" hypertension
M. Lat. * Fracture, plaque, decisive time transitional state. Crisis or sick fracture; Change crisis or coup. Doctors call the crisis sudden coup in the disease, for example. Pot, vomiting, bleeding, and lysis, gradual permission. Critical, to the crisis relating, (see also criticism)
Exacerbate. Diseases
Acute flaw
Topic 2 Macroeconomic instability
S:Oaken's law describes the feedback between ...
+: Unemployment levels and tempo of change of real GNP
-: unemployment and GNP levels at current prices
-: unemployment rate and interest rate
-: unemployment and tempo of inflation
S:The inflation of demand can cause such reasons as ...
+: wage growth
+: Consumer Inflationary Expectations
-: Adaptive expectations of manufacturers
-: height cash
S:Real wages with an increase in the nominal wage 1.2 times, prices for consumer goods by 12% ...
+: increased by 8%
— : decreased by 8%
— : increased by 12%
— : decreased by 12%
S: The deviation of the real distribution of income from absolute equality is expressed by the curve ...
-: Phillips.
+: Lorentz
-: Laffer.
S: Natural unemployment suggests ...
-: 100% employment of the working-age population
-: availability of cyclic and hidden unemployment
+: The presence of structural and friction unemployment
S: Last year, the actual unemployment rate was 10%, natural - 5%, the OUCEN coefficient is 2, potential GDP 120 units, actual GDP is equal to ...
S:Which of the processes listed below does not apply to the phase of the lifting?
-: price increase
+: Growth of payments from various social funds
-: Growth of tax revenues
-: Investment growth in the private sector
S:During the recession is observed ...
-: Reducing employment level
-: Reducing consumer costs for the purchase of long-term goods
+: All previous answers are true
S:During the decline period, they are most reduced ...
-: Consumer spending on the purchase of drugs
-: wage level
+: Value of entrepreneurial profit
-: All previous answers are incorrect
S:The numerical value of which of the following indicators falls after the occurrence of the lifting phase and grows after the decline phase occurs?
-: GNP volume
-: average working week duration
-: volume of industrial production
+: Volume of commercial stocks in the manufacturing industry
S:Full employment is a period when ...
-: Everyone who is looking for a job finds her
+: The unemployment rate coincides with the set of levels of frictional and structural unemployment
-: There are 100% employment of labor resources
-: Levels of real and cyclic unemployment coincide
S:A man who hopes soon to get a job again ...
-: refers to the category of employed
+: Refers to the unemployed
-: Not taken into account in the workforce
-: Considered as not fully busy
S:Lost work due to a decline in the economy falls into the category of unemployed, covered by ...
-: frictional form of unemployment
-: structural form of unemployment
+: cyclic form of unemployment
-: all previous answers are not true
S:According to the OUCEN law, the two percent excess of the actual unemployment level over its natural level means that the lag of actual GDP from the potential is ...
S:Which of the listed actions acts as a means by which the individual is insured against the risk of unexpected inflation?
+: Inclusion in the employment contract of the point providing for indexing wages in the long term
-: offer to your friend loans, the interest rate on which is lower than banking
-: Opening a new business based on loans received from the bank
-: All previous answers are true
S:What of the listed below causes inflation of demand?
-: Rising prices for raw materials and transport services
-: Rising interest rate
+: wage increase
-: Growth of government spending
S:Cost inflation is called ...
-: Falling prices for equipment, raw materials and materials
+: Rising prices for production factors
-: Excessively cumulative supply over total demand
-: freezing salary and prices
Topic 3. Money and banks
S:Operations on the open market, as a tool for monetary (monetary) policies mean ...
+: buy or sell Central Bank State Bonds
— : The activities of the Ministry of Finance on State Change state budget
— : provision by the Central Bank of Credits Commercial Banks
— : Activity of the Ministry of Economics to Change Tax System
S:Credit and monetary policy tools include ...
+: Mandatory reservation rate
+: Operations in the open market with securities
-: unemployment benefits
S:The transactional demand for money is presented, because the money is ...
+: Treatment
-: means of savings
-: value measure
-: Payment
S.: Speculative demand for money depends on ...
+: interest rates
-: Employment levels
S: What is not a central bank function?
+: Receive contributions from the population
-: money emissions
-: maintain stability cash circulation
-: Operation Operations
-: Regulation of interest rates
S: The policy of cheap money suggests ...
+: reducing the backup rate
+: Purchase of state valuable papers
-: reducing inflation rates
-: Increased accounting
S:What determines the cost of 100 ruble banknotes?
-: the cost of paper from which it is made
-: Gold, which provides its value
-: The cost of labor invested in its manufacture
+: The number of goods and services that can be paid by this banknote
S:The maximum amount of money that can "create" commercial banks depends on the demand for loans and from ...
-: Cash number in the hands of the population
+: Mandatory reservation standards
-: quantities of gold and silver in bank storage
-: Quantities paper moneymanufactured by the Central Bank
S:Mr. N has invested 10,000 rubles at the expense of a commercial bank.
Tests_Economy
What maximum amount of money can be "created" banking system Based on this contribution at 25% of the mandatory reserve ...
+: 30000 rubles.
-: 50,000 rubles.
S:Purchasing power of money ...
-: rises during inflation
+: decreases during inflation
-: decreases during the period of deflation
-: Not affected by inflation and deflation
S:The concept of "demand for money" means ...
-: Desire to keep securities that can be drawn to money at a fixed price if necessary.
-: The amount of money that entrepreneurs would like to use to provide a loan at a percentage rate
-: Desire to store part of income on "Black Day"
+: Same as the sum of transaction and speculative demand
S:The demand for money for transactions is changed as follows ...
-: increases with increasing interest rates
-: increases when the interest rate is reduced
-: decreases with a decrease in nominal GDP
+: Reduced as nominal GDP grows
S:If the demand for money and the offer of money will grow, then ...
-: The equilibrium amount of money and the interest rate will grow up;
-: equilibrium amount of money and the interest rate will be reduced
+: The equilibrium amount of money will grow, and the change in the equilibrium bet is impossible
-: the equilibrium interest rate will grow, and the change in the equilibrium amount of money is impossible to predict
S:The total monetary mass increases whenever commercial banks ...
-: Increase your deposits in central Bank
+: Increase the volumes of loans issued by the population
-: Increase their obligations under current accounts by receiving cash from the population in deposits
-: Resess part of their deposits in the Central Bank
S:The norm of mandatory reserves ...
+: It is introduced, first of all, as a means of limiting the money supply
-: Entered as a means protected from deposit seizures
-: makes up the average mass of the mass of money necessary to meet the needs of the population
-: None of the answers is faithful
S:Excessive reserves commercial Bank consist of…
-: Assets that, not being money, can be quickly turned into money if necessary.
-: money that should be kept in a bank not because of the current need for them, but on the basis of the requirements of the law
+: Differences between the values \u200b\u200bof the actual reserves and the value of mandatory reserves
-: differences between the value of assets and the amount of deposits on current accounts
S:If the norm of mandatory reserves is 100%, then the value of the money multiplier is equal to ...
S:In the bank x, which is one of many banks, there is a deposit of 8000 USD. The norm of mandatory reserves is set 20%. This deposit is capable of increasing the amount of loans to the minimum on ...
-: an indefinite value
S:Suppose that the transactional demand for money is 10% of the nominal volume of GDP, the money supply is $ 450 billion, and the speculative demand for money is shown in the table:
if the nominal volume of GDP is 3000 billion dollars, determine the equilibrium interest rate ...
S:When a person buys a TV and pays for him in the store, then the money performs the function ...
+: Tools
-: Saving tools
-: cost measures
-: accumulation tools
S:Speculative demand for money depends on ...
-: growth rates of gross domestic product
-: economic growth rates
-: Employment levels
+: Percentages
S:The main functions of money does not apply to the function ...
+: Redistribution of income
-: Exchange Means
-: counting units
-: Payment tools
S:In the Russian Federation, the role of the account is performed ...
-: standard of mandatory reserves
-: Bet banking Commission
+: Refinancing rate
-: interest rate on deposits of commercial banks in the Central Bank
Take advantage of the site:
In economic growth
the rates of increasing real national income exceed the growth rate of the population
population growth rates exceed the rate of increasing real national income
population growth rates correspond to the pace of increasing real national income
the rate of increase in real national income is lagging behind the growth rate of the population
61. The external effects include ...
£ Reduced Profit Producers Profited
£ costs and benefits of third parties
£ Reduction of government revenues
£ costs and benefits not included in the market price of good
62. During the decline in the economy there is an increase ...
production of goods and services
profit enterprises
unemployment level
wages
63. As the main classification sign Economic cycles stand out ...
mechanism of leakage
causelessness
cycle frequency
type of economic policy
Regulation to adjust it is impossible and inefficient
Production of goods A conjugate with the emergence of a positive external effect. From the point of view of public interest in the industry producing goods A, is observed ...
insufficient use of resources
optimal use of resources
excessive use of resources
either redundant use of resources or insufficient use of resources
65. Higher education is an example ...
services, the provision of which should be funded both by the state and private consumers.
pure public good
free access benefits
pure private good
66. Modern Western economic theory under the recession understands ...
crisis and depression
revival and ascent
crisis and ascent
crisis and recovery
67. Positive external effects are manifested with ...
reducing food prices
vaccination workers
production of children's products
assistance to the poor
How, when and why raises and decline arise in the economy?
Analyzing the speaker economic DevelopmentScientists in the 19th century drew attention to the cyclical activity of business activity and revealed regular fluctuations occurring in this area. It was found that the economy of various states operates between extreme dots - boom and depression. Periodically, there are such phenomena on the market as an increase or, on the contrary, a decrease in demand, fluctuations in the level of employment, an increase or decrease in production volumes, a change in price level, etc., and they occur with certain periodicity and in a certain sequence.
Such regular oscillations received the name of economic cycles. The cyclicity is characteristic of the economy of both individual countries and the world as a whole. It reflects, as a rule, almost in all areas of the economic life of states. Science determines the four cycles of the development of the economy, following one by one: boom (peak), crisis (decline), depression (bottom), revival (lifting). There are long economic cycles, repeating every 20-25 years, and short, repeating every 5-10 years. But the clear formula is not for predicting their duration.
Between boom and depression
The boom is the peak of business activity, the highest point of the wave-like curve, which develops the economy. At this point there is a rise in production and the maximum reduction in unemployment. As a rule, at this time there is an increase in inflation.
The boom is replaced by a decline, during which there is a reduction in production volumes and a decrease in business activity. This period is characterized by increasing unemployment and stabilization of the price level.
Bottom economic cycle is the lowest point of the curve.
Economic Theory II Course Test
In this stage, production is experiencing the greatest decline, the highest level of unemployment is observed. It is believed that this cycle phase is usually no longer extensive, which is confirmed by historical facts. However, the Great Depression of the 1930s, despite periodic fluctuations in business activity, lasted almost 10 years.
After reaching the lowest point of the cycle, the lifting phase occurs, which is characterized by an increase in the number of employed population and a gradual increase in production volumes. Investments in its modernization gradually overlook the previous level, the prices of raw materials and materials begin to grow.
This period is distinguished by the general increase in the level of inflation.
Why do decays occur in the economy?
It is impossible to clearly name the causes of the cyclicality of the economy. Some scientists associate it primarily with the introduction of technological know-how in various fields of production, which leads to an increase in production volumes, change in the level of employment and price level.
According to other specialists, cyclicity has a monetary nature. So, the change of cycles can contribute to an excessive influx of money in the country's economy or, on the contrary, the deficit of funds. An increase in the amount of money supply, including cash in the hands of the population and bank loans, stimulates the development of the economy, while the reduction in the amount of money supply, on the contrary, leads to a decline. At the same time, the continuous influx of funds in the country's economy usually leads to an excessive increase in the level of inflation, so the authorities are trying to distinguish with excessive money supply.
The reasons for the change of economic phases can also become external influences - such as wars and natural cataclysms. Such shocks violate equilibrium in the economy and cause response oscillations, such as a change in world oil prices.
In addition to the global pattern leading to the change of phases, the economy has impact and seasonal phenomena. For example, before the New Year and Merry Christmas in the economy, there is usually a revival, and during the summer holidays, business activity decreases.
Social science
Tutorial for grade 11
§ 2.4. Economic cycle
From the definition of economic growth, it is clear that it is long-term, that is, ideally a constant increase in GDP should occur. BUT B. real economy This does not occur: the growth of production and business activity is replaced by a decline in production, a decrease in GDP, then the economy is growing again. The economy is thus developing cyclically. A sharp drop in production, as you know, are called an economic crisis.
The first economic crisis occurred in England in 1825, and the cyclical crisis of 1857 was first touched upon all the leading countries of the world, becoming the world. In the future, crises took place regularly. They were characterized by a sharp drop in production, bankruptcies of many enterprises, increasing the level of unemployment, falling purchasing power population. Having reached the lowest point, the economy begins to gradually leave the crisis: the production is growing, the unemployment decreases, income increases, increases the total demand and the total sentence, the economy again "overheats" (i.e. production and consumption reach their maximum), and this leads to another crisis. Economics develops such cycles.
What is the economic cycle?
Economic cycle - This is an alternate alternation of lifts and recessions in the movement of real GDP.
The economic cycle consists of four phases consistently replacing each other.
- The first phase is an economic rise, which is characterized by almost complete employment of the active population, the continuous expansion of the production of all goods and services, until all production capacity is involved, income growth, and, consequently, the expansion of aggregate demand. All production indicators reach their peak. At some point, the cumulative proposal begins to exceed the cumulative demand. Manufacturers cannot sell their products, pay off their creditors and suppliers, bankruptcy begins. Consumers fear dismissal and reduce their expenses. Trade does not take new products for sale, industry reduces production and does not make demand for resources. This is the beginning of the recession.
- The second phase is an economic decline, or a recession, which is characterized by a reduction in production and consumption, income and investment, falling gDP level. Finally, all the indicators reach their lowest point - crisis.
- The third phase - depression, when the economy, reaching the bottom, turns on the spot, because it takes time to become gradually to gain momentum.
- The fourth phase is the revival that is characterized by the gradual growth of production, because the demand is growing, the industry begins to attract additional workforce, trade orders more and more products, the income of the population and the profit of entrepreneurs are growing. This phase continues until all indicators reach the peak of the previous lifting phase, after which the new rise and the new economic cycle begins.
What is the duration of the economic cycle?
This is a very important question that worries not only theoretical economists, but also politicians, trade union leaders and businessmen. If you knew about the occurrence of the crisis, it would be possible to prepare for it. But, as a rule, crises are suddenly coming.
In the XIX century The cycle was approximately 8-10 years: crises were observed in 1825, 1836, 1847, 1857, 1866, 1877, 1882 and 1890. K. Marx believed that the material basis of the cycles periodicity is the replacement of fixed capital, which at that time served about 10 years. The crisis just gives rise to an incentive to update the fixed capital, on the one hand, and stimulates the lifting phase on an updated basis - on the other. In addition, 10 years old, technical progress did not stand in place, therefore, the equipment was subjected not only to physical, but also moral wear, t.
Test tasks. 1. The heading goal of economic growth is an increase:
e. Outdated, does not correspond to the new level of technology.
In the XX century The cycles have become shorter, and crises, especially after World War II, are less acute.
The longest and destructive crisis of the XX century. occurred in 1929-1933. and got the name of the Great Depression. In the US, the decline in production lasted 4 years in a row, real GDP fell by 40%, per capita income fell by 30%, every fourth person lost his job, and many and housing for which there was nothing to pay. Industry was especially injured. For example, the production of cast iron at the lowest point of the US crisis was thrown back for 42 years (relative to the level of 1890), England - for 76 years (to the level of 1856), Germany for 45 years (to the level of 1887 ).
Modern crises are not so deep: the fall in production continues on average 10-12 months, and the reduction in real production ranges from 1.5 to 5% (US data). In the US, economic recessions took place in 1973-1975, 1979-1980, 1981-1982, 1990-1991. The longest period of lifting in the United States continued from 1982 to 1990, and the shortest - from 1980 to 1981
What are the reasons for the cyclic development of the economy? There is also no definite answer to this question among economists.
Some scientists explain the economic cycles by external (exogenous) reasons:
- wars, due to which the economy is rebuilt into production military products, additional resources are attracted and working force, and at the end of the host, the decline comes;
- the impact of some other external factors, such as the so-called oil currents, when oil producing countries were combined into one cartel - OPEC - and sharply raised prices for oil, which caused the world's largest crisis in 1973-1975, in which in the US The decrease in production lasted 16 months and amounted to about 5%;
- large innovations ( railways, cars, electronics) that have a great influence on investment, production, consumption, price level;
- even stains in the sun, which affect the yield of crops, and crouchs can lead to the crisis of the entire economy.
Other economists explain the economic cycles internal (endogenous) factors:
- monetary (monetary) government policy: a large amount of money generates an inflation boom, and their inadequate number reduces investment and leads to a decline in production;
- a change in the ratio of the aggregate supply and total demand, when, for example, cardinal new products appear (personal computers) and demand switches to them, and manufacturers of old goods (writing machines) have to close production and transfer resources to other industries;
- reduction of production caused by the production of commercial products, i.e., the accumulation of large reserves due to low demand or high prices, when trade refuses the goods that it cannot be implemented, and the aggregate offer exceeds the cumulative demand.
Whatever the reasons for the existence of economic cycles, they continue to affect the economy, although it is an impact in modern market economy Not so crushing as before. The state and major business learned how to influence the economic cycle. Many government governments resort to anticyclic regulation methods that smooth development peaks and do not give the economy to the bottom. Large business with the help of marketing recognizes long-term trends in demand for certain goods and does not allow their overproduction.
Although economic cycles and especially the phase of the crisis lead to such negative phenomena as unemployment and inflation, there are positive moments: It is the crisis that allows cumulative demand and cumulative proposal in line with the most viable firms and continue the development of the economy on a new technical basis.
Fluctuations in economic activity (economic conjuncture), consisting in a repeating compression (economic recession, recession, depression) and expanding the economy (economic lifting). Cycles are periodic, but usually irregular. Usually (within the framework of neoclassical synthesis) are interpreted as oscillations around a long-term trend for the development of the economy.
The deterministic point of view on the causes of economic cycles is proceeded from predictable, well-defined factors forming at the stage of lifting (recession factors) and recession (lifting factors). Stochastic point of view proceeds from the fact that cycles are generated by the factors of random nature and are a reaction economic System on internal and external impulses.
Usually allocated four main types Economic cycles:
short-term cycles Kitina (characteristic period - 2-3 years);
medium-term cycles Juedor (characteristic period - 6-13 years);
rhythms of the Blacksmith (characteristic period - 15-20 years);
long waves Kondratyev (The characteristic period is 50-60 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
The rise (revival) occurs 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 cycle of business activity, is the "highest point" of the economic lift. In this phase, unemployment usually reaches the lowest level or disappears at all, production facilities work with a maximum or close to its load, that is, in the production of practically all in the country material and labor resources. 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 decline (recession) is characterized by a reduction in production volumes and a decrease in business and investment activity. As a result, unemployment increase increases. Officially, the phase of the economic recession, or recession, consider the fall in business activity, continuing over three months in a row.
Bottom
The bottom (depression) of the economic cycle is the "lowest point" of production and employment. It is believed that this cycle phase is usually no longer extensive. However, the story knows the exceptions to this rule. The Great Depression of the 1930s, despite periodic fluctuations in business activity, lasted 10 years (1929-1939).
A characteristic feature of cyclic development is that this is, first of all, development, and not oscillations around a certain permanent (potential) value. The cyclicity means the development of the spiral, and not by a closed circle. This mechanism of progressive movement in various forms. Economic literature emphasizes that cyclic oscillations occur near the trajectory of long-term growth (century trend).
The reasons
The theory of real economic cycles explains the decline and lifts to the impact of real factors. In industrialized countries, this may be the emergence of new technologies, changing prices for raw materials. In agrarian countries - harvest or cripples. Also, force majeure situations (war, revolution, natural disasters) can be a push to change. Anticipating the change in the economic situation in the best or worse, households and firms massively start saving or spend more. As a result, aggregate demand is reduced or increases, and the turnover is reduced. retail. Firms get less or more orders for the manufacture of products, accordingly the volume of production, employment is changed. Business activity is changing: firms are beginning to reduce the range of products or, on the contrary, launch new projects, take loans for their implementation. That is, the whole economy fluctuates, striving to come into balance.
In addition to oscillations of aggregate demand, there are other factors affecting the phases of the economic cycle: changes depending on the change of seasons in agriculture, construction, automotive industry, seasonality of retail trade, age-old trends in the economic development of the country, depending on the resource base, the number and structure of the population, the proper management.
Impact on the economy
The existence of the economy as a totality of resources for steadily growing consumption has a oscillatory nature. Economy fluctuations are expressed in the economic cycle. The "thin" moment of the economic cycle is considered to be a decline, which, at some, scale can go to the crisis.
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 is the removal of money supply (money) from the consumption and production of consumer goods (also 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;
- 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 sales volumes of food and clothing, as a rule, are also reduced, this reduction is usually less than a drop 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.
At the end of the 20th century, the American economy apparently joined the period of a long downturn, as 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.
It should be noted that along with the described economic cycles, long cycles are also distinguished in the theory. Long cycles in the economy - economic cycles with a duration of more than 10 years. Sometimes called their researchers.
Investment cycles (7-11 years) studied Clement Jewor (FR. Clement Juglar). Data cycles, apparently, makes sense to be considered as medium-term, not long.
Infrastructure investment cycles (15-25 years) studied nobel laureate Simon Blacksmith.
Condratyev cycles (45-60 years) described Russian economist Nikolai Kondratyev.
It is these cycles most often and denote as "long waves" in the economy.
Cycles Kitina
Cycles Kitina - short-term economic cycles with a characteristic period of 3-4 years, open in the 1920s by the English economist Joseph Kitchin. Kitchin himself explained the existence of short-term cycles by fluctuations in global gold reserves, but in our time such an explanation cannot be considered satisfactory. In modern economic theory The mechanism for generating these cycles is usually associated with retardations in time (temporary lags) in the motion of information affecting decision-making by commercial firms.
The improvement of the company's conjuncture responds with full capacity utilization, the market is injected with goods, after some time the warehouses are formed excessive stocks of goods, after which a decision is made to reduce capacity utilization, but with a certain delay, since information about the transaction over demand itself is usually With a certain delay, it also takes time to check this information; A certain time is required to accept and approve the decision itself.
In addition, a certain delay is observed between the decision-making and relevant reduction in capacity utilization (the time to bring the solution is also required). Finally, another temporary lag exists between the moment the level of reducing the level of production capacity and relevant resorption of excessive stocks of goods in warehouses. In contrast to Kitina cycles within the framework of Jewor's cycles, we observe oscillations not just at the level of loading existing production facilities (and, accordingly, in the volume of inventories), but also fluctuations in the volume of investment in fixed assets.
Jewrara cycles
Jewrara cycles - Medium-term economic cycles with a characteristic period of 7-11 years. Named by the name of the French economist Cleleman Zhulyrara, one of the first described these cycles. In contrast to Kitin cycles within the framework of Zeylur cycles, we observe oscillations not just at the level of loading of existing production facilities (and, accordingly, in the volume of inventories), but also fluctuations in the volume of investment in fixed assets. As a result, time delays between the adoption of investment solutions and the construction of appropriate production facilities (as well as between the construction and the relevant launch of the appropriate capacities are added to temporary delay, characteristic of Kitchin cycles.
Additional delay is formed between the decline in demand and the elimination of the corresponding production facilities. These circumstances are determined by the fact that the characteristic period of Jewor's cycles is noticeably longer than the characteristic period of Kitin cycles. Cyclic economic crises / recessions can be viewed as one of the phases of the Zhuyaror cycle (along with the phases of revitalization, lifting and depression). At the same time, the depth of these crises depends on the Kondratyev wave phase.
Since not a clear periodicity is observed, the average value of 7-10 years has been taken.
Phase cycle Jugulrara
In the cycle of Juléra, four phases often distinguish themselves, in which some researchers identify subphaluses:
- the phase of revival (start and acceleration subfasses);
- lifting phase, or prosperity (phases of growth and overheating, or boom);
- phase of recession (diaphounds of collapse / acute crisis and recession);
- phase Depression, or stagnation (stabilization and shift subfasions).
Cycles (rhythms) of the blacksmith have a duration of about 15-25 years. They received the name of the Cycles of the Blacksmith named American economist of the future laureate of the Nobel Prize Simon Kuznez. They were opened in 1930. The blacksmith tied these waves with demographic processes, in particular, the influx of immigrants and construction changes, so he called them "demographic" or "building" cycles.
Currently, a number of authors of the rhythm of the Blacksmith are considered as technological, infrastructure cycles. In these cycles, there is a mass update of basic technologies. In addition, there are well coincided with the Cycle of the Blacksmith Large cycles of real estate prices on the example of Japan 1980-2000. And the duration of a large half-wave of price lift in the United States.
The proposal to consider the rhythms of the Blacksmith as the third harmonic of the Kondratyevskaya wave was also expressed. It is not observed with a clear periodicity, so the researchers take the average value of 15-20 years.
Condratyev cycles
Condratyev cycles (K-cycles or to-waves) - periodic cycles of a modern world economy with a duration of 40-60 years.
There is a certain relationship between the long Condratyev cycles and the medium-term cycles of Zhulura. Such a connection was noticed by Kondratyev himself. Currently, it is expressed that the relative correctness of the alternation of the upper and lower phases of Kondratyevsky waves (each phase of 20-30 years) is determined by the nature of the group of nearby medium-term cycles. During the rising phase of the Kondratyevskaya wave, the rapid expansion of the economy inevitably leads society to the need to change. But the possibility of changing the society is lagging behind the requirements of the economy, so the development goes into a decrease in the phase during which crisis-depressive phenomena and difficulties are forced to rebuild economic and other relations.
The theory was developed by the Russian economist Nikolai Kondratyev (1892-1938). In the 1920s. He drew attention to the fact that in the long-term dynamics of some economic indicators there is a certain cyclic regularity, during which the phases of the growth of the corresponding indicators comes to the phases of their relative decline with the characteristic period of these long-term fluctuations of about 50 years. Such oscillations were marked as large or long cycles, subsequently called by Y. Schumpeter in honor of the Russian scientist Kondratyevsky cycles. Many researchers began to call them with long waves, or Kondratyevsky waves, sometimes to the waves.
The characteristic period of waves is 50 years with a possible deviation of 10 years (from 40 to 60 years). Cycles consist of alternating phases with respect to high and relatively low economic growth rates. Many economists do not recognize the existence of such waves.
N. D. Kondratyev noted four empirical patterns In the development of large cycles:
Before the rise of the boost wave of each large cycle, and sometimes at the very beginning there are significant changes in the conditions of the economic life of society.
Changes are expressed in the technical inventions and discoveries, in changing the conditions of money circulation, in strengthening the role of new countries in world economic life, etc. Specified changes In one degree or another, it is constantly, but, according to N. D. Kondratyev, they proceed unevenly and most intensively expressed before the start of raising waves of large cycles and in their early.
Periods of raising waves of large cycles are usually significantly richer by large social shocks and coups in the life of society (revolution, war) than periods of lower waves.
In order to make sure that this approval is enough to look at the chronology of armed conflicts and coups in world history.
Lower waves of these large cycles are accompanied by a long depression of agriculture.
Large cycles of economic conjuncture are detected in the same single process of economic development dynamics, in which the average cycles with their lifting phases, crisis and depression are revealed.
Studies and conclusions of Kondratyev were based on the empirical analysis of a large number economic indicators different countries At fairly long intervals that covered 100-150 years. These indicators: price indices, government debt papers, nominal wages, indicators of foreign trade turnover, coal mining, gold, lead production, cast iron, etc.
Opponent Kondratieva, D. I. Oparin, indicated that the time series of studied economic indicators, although they give large or smaller deviations from middle size In one way or another different periods Economic life, but the nature of these deviations, both in a separate indicator and the correlation of indicators, do not allow to highlight strict cyclicity. Other opponents indicated N. D. Kondratyev's retreat from Marxism, in particular the use of cycles to explain the cycles " quantitative theory money".
Over the past 80 years, the theory of long waves of Nikolai Kondratyev, I. Schispeter, theories of the creative destruction of I. Schumpeter, the theory of technical and economic cenosis of L. Badalyan and V. Krivorotov, the theory of technological devices developed by Academicians S. Glazyev and Lvov, the theory of the evolutionary cycles of Vladimir Panutin.
The theory of long waves, as well as Nikolai Kondratyeva himself, rehabilitated the famous Soviet economist S.M. Menshikov in their work "Long waves in the economy. When society changes the skin "(1989).
Dating Kondratievsky waves
For the period after the industrial revolution, the following Kondratyevsky cycles / Waves are usually allocated:
- 1 cycle - from 1803 to 1841-43. (marked moments of minima of economic indicators of the world economy)
- 2 cycle - from 1844-51 to 1890-96.
- 3 cycle - from 1891-96 to 1945-47.
- 4 cycle - from 1945-47 to 1981-83.
- 5 cycle - from 1981-83 to ~ 2018 (forecast)
- 6 cycle - from ~ 2018 to ~ 2060 (forecast)
However, there are differences in the dating of "Postconte'evsky" cycles. Analyzing a number of sources, Grinn L. E. and Korotaev A. V. lead the following borders of the beginning and end of the "postconte'ev" waves:
- 3 cycle: 1890-1896 - 1939-1950
- 4 cycle: 1939-1950 - 1984-1991
- 5 cycle: 1984-1991 -?
The ratio between Kondratyevsky waves and technological devices
Many researchers associate wave shifts with technological devices. Breakthrough technologies reveal opportunities for expanding production and form new sectors of the economy that form a new technological way. In addition, Kondratyevsky waves are one of the most important forms of the implementation of industrial principles of production.
The consolidated system of Kondratievsky waves and the corresponding technological instructions is as follows:
- 1st cycle - Textile factories, industrial use Stone coal.
- 2nd cycle - coal mining and ferrous metallurgy, railway construction, steam engine.
- The 3rd cycle is heavy engineering, electric power, inorganic chemistry, steel and electric motors.
- The 4th cycle is the production of cars and other machines, chemical industries, oil refining and internal combustion engines, mass production.
- The 5th cycle is the development of electronics, robotics, computing, laser and telecommunications equipment.
- The 6th cycle is possibly NBic-convergence EN (convergence of nano-, biocoing, information and cognitive technologies).
After the 2030s (2050s according to other data), the onset of technological singularity is possible, which is currently analyzing and the forecast. If this hypothesis is true, then Condratyev cycles can break closer to 2030.
Restrictions Model Kondratyev
Kondratievsky waves have not yet received final recognition in world science. Some scientists are building calculations, models, forecasts based on K-waves (all over the world and especially in Russia), and a significant part of economists, including the most famous, doubt their existence or are denying them at all.
It should be noted that, despite the importance of the N.D. Condrase cyclicity of the development of society for forecasting tasks, its model (as well as any stochastic model) only studies the behavior of the system in a fixed (closed) environment. Such models do not always respond to questions related to the nature of the system itself, the behavior of which is being studied. It is well known that the behavior of the system is an important aspect In her study.
However, aspects of the system associated with its genesis, structural (gestal) aspects, aspects of complementing the logic of the system with its subject, etc. may even be the most important aspects of the system with its subject, etc. Systems depending, for example, from the external environment in which it functions.
Condratyev's cycles In this sense, only the consequence (result) of the system reaction to the external environment. The question of the opening of the nature of the process of such response today and the opening of factors that affect the behavior of the systems is relevant. Especially when many, relying on the results of N. D. Kondratieva, A. V. Korotheev and S. P. Kapitsa about the sealing time, predict more or less quick transition of society by the permanent crisis period.
When studying the fundamental factors of the price movement, it is important to take into account the overall state of economic development of this or that state at the current time, since the National Bank will rely on it when planning its further action. Among the popular states, the recession in the economy is listed, which is currently observed in a number of countries.
Therefore, it will be described below, which represents this phase of the country's economic situation and what measures on its background should be expected from Central Banks whose task is supported by support national currency and domestic manufacturers. Theoretical material and examples will be filed simple wordsnot to leave shortness.
Clarification of the term and specificity of its use
History shows that the economy of any country always passes through the cycles of growth and recession, developing along the cyclical scheme. In this regard, there are four main stages, namely:
- active development;
- location at the peak of development;
- attenuation;
- achievement of the bottom (crisis).
The attenuation period, when the economy is experiencing problems, and the situation inside the country worsens, moving from the peak of its development to the bottom, and is called a recession.
If you appeal to the morphology of the word, then it originated from the recessus that translated from Latin is translated as a retreat. The main signs will be the slowdown in economic development, reducing production volumes, decreased wage size, reduction of the working day and so on. Moreover, this process is usually quite protracted and stretched at least for a year, or even more. If the crisis is unfolded by an intense tempo, the word recession is not used, then they say - decline, collapse, etc.
The periods of recession in the economy are inevitable, as the economy, like the ocean, is also experiencing their peculiar tides and flows. Therefore, economists are always ready for the new turn of the recession in advance, and the Central Bank in his arsenal has a number of mechanisms that help him withdraw the country from this period, spurring development.
Ending the introductory part, it should be noted - the most developed States The world is so closely woven among themselves, that the recession of one inevitably leads to problems in another. Therefore, in the case of stagnation of the economy of one of the key countries, a chain reaction is usually begins, which soon causes a recession due to certain reasons in other states. One of the bright examples recent years - China. As soon as the PRC entered the recession phase, other countries immediately felt the negative of this phenomenon.
What phenomena are characteristic during this period
Financiers are easy to see the starting slowdown, as they can observe very characteristic phenomena during the recession in the economy, which are difficult to skip. If it was above briefly designated, for what signs you can notice attenuation, now we describe the main signs in more detail.
- Common macroindicator that reflects the set of economic factors is the volume gross Product, famous for its abbreviation - GDP. If its indicators fall, then you can not doubt - the country's economy is in the recession phase.
- The second factor will be the slowdown in production volumes, as well as a decrease in the activity of consumers, which begin to save more and postpone about the reserve than spending. These signs well reflect the macroeconomic indicator - the level of business activity.
- As soon as the business begins to experience problems, there is a reduction in workers. As a result, the number of unemployed is growing, and the corresponding macropochelters are clearly noted.
- The slowdown in growth raises another negative phenomenon - manufacturers and service providers start saving, cutting wages To its employees. This leads to a decrease in profits from the population, which is again forced to reduce their expenses, which aggravates the general situation in the state.
- Last characteristic sign There will be inflation. Her change is well reflecting the presence or absence of economic problems within the country.
Usually all these phenomena are interconnected, since the appearance of one of them causes a chain reaction. Therefore, any of the signs described above eloquently talks about the diverse problem.
Because of which the economy enters the stage of attenuation
Despite the fact that the state's economy enters the stage of recession regularly, obedience to cyclical development - the reasons that lead to this are usually completely different. Moreover, they can be both internal and external. Below are the most common negative factors leading to the fact that the recession occurs in the economy, the reasons that are damaged to the state and lead to a stop of economic development.
Scientific and technical progress
It seems strange, but the revolution in the world of NTP is not always a joyful phenomenon. Often, progress becomes the cause of the recession, since the introduction of new solutions can cause the absence of the need for old habitual products or services. Accordingly, some industries or services sectors may stop their existence that it will cause the appearance of a large number of unemployed, reducing revenues to the state budget and so on.
Reducing the cost of commodity
For a number of countries, whose budget is filled by exporting raw materials to the global market, the reduction in the cost of energy carriers leads to the stage of recession. A very good example is the fall in oil prices in 2013-2015. Against the background of the reduction of black gold, a number of states, among whom Canada, Russia, Mexico, etc., experienced a strong budget deficit, which led to a deterioration in the country's economic condition.
Crisis of banking segment
It is enough to recall the 2008 crisis in the United States, when American banks seemed unshakable and implaced financial stability, suddenly caused the strongest economic crisis In one of the most developed economies of the world. The reason was that they easily provided loans to everyone, especially for real estate, resulting in the volume of issued credit funds broke the natural balance. At some point, credit holders lost their opportunity to pay them, which caused the bankruptcy of small financial structuresWhile major institutions were forced to insure their risks and tighten the requirements. As a result, business began to receive extremely bad conditions for work, which served as the reason for the general slowdown in the production, services sectors, trade, etc.
Circumstances of force majeure
In some cases, the recession becomes a consequence of force majeure. A good example serves as a strong earthquake that occurred a few years ago in Japan. It was impossible to predict it, but caused by the destruction were so significant that investors who use Ian, as currency-refuge for their capital, began to withdraw them. The rapid outflow of finance caused a sharp drop of yen and as a result of the prolonged period of recession.
Consequence of recession for the country's economy
If we talk about the consequences that recession causes, many of them are already described above, where it is described about the recession in the economy and the phenomena that it is accompanied. Nevertheless, the list of moments that need to be borne in mind is given, since they largely provide chances for currency speculators that can be used in their own interests.
- The decrease in production volumes will lead to profit by enterprises of profits, as a result of which the value of their shares falls.
- Reducing the consumption of goods and services. This factor leads to the cheaper of the national currency, as the Central Bank will mitigate the monetary policy rate to level negative consequences This phenomenon.
- Increase the number of unemployed. Little trader does not know how much influences the US dollar monthly publication from the labor market - NFP. The same applies to other countries - the unemployment rate is a significant guideline for investors, so the growth of the unemployed weakens the currency, and the decrease is strengthened.
- The drop in the number of loans issued by banks and an increase interest rates According to loans, it also suggests that the conditions for the development of the country's economy deteriorate, and therefore its currency will be cheaper.
- If any factors indicate a recession that began, then you can expect a fall stock market states. At this point you can play down, selling stocks of blue chips or opening short positions on stock exchange index.
Actions of the National Bank in a decline
As soon as the first signs of the recession appear, the National Bank of the state begins to gradually lead to certain mechanisms that stimulate the economy and improve the conditions for business.
The most common option to which the Central Bank resorts is to reduce interest rates. This lowers the course of the national currency, and quite strongly, which allows traders to make money well at the distance, opening short positions.
In addition, the Central Bank can hold on currency market intervention, stopping the development of especially protracted and strong trends, when the quotes are national monetary unit Start hard to weaken. So, for example, the Central Bank of the Russian Federation was received in 2014-2015, pouring large amounts of money to stop the fall of the Russian ruble against the American dollar.
Knowing the features of the development of events in recession, skillful speculators and investors may find many opportunities for themselves, allowing them to earn money.
In fact, the economy is not developing in a straight line (trend), which characterizes economic growth, but through constant deviations from the trend, through the decline and lifts. The economy develops cyclically (Fig. 1.). Economic (or business) cycle (Business Cycle) is periodic decals and lifts in the economy, vibrations of business activity. These oscillations are irregular and unpredictable, therefore the term "cycle" is quite conditional. Severe two extreme points of the cycle: 1) Pick point (PEAK), corresponding to the maximum of business activity; 2) DNA point (Trough), which corresponds to a minimum of business activity (maximum decay).
The cycle is usually divided into two phases (Fig. 1. (a)): 1) the phase of the decline or recession (recession), which lasts from the peak to the bottom. A particularly long and deep recession is called Depression (Depression). It is not by chance that the crisis of 1929-1933 received the name of the Great Depression; 2) the lifting phase or revival (recovery), which continues from the bottom to the peak.
There is another approach in which four phases are isolated in the economic cycle (Fig. 1. (b)), but extreme points are not highlighted, as it is assumed that when the economy reaches a maximum or a minimum of business activity, then a certain period of time (sometimes enough Prolonged) It is in this state: 1) I phase - boom (boom), in which the economy achieves maximum activity. This is a period of supervaluation (the economy is above the level of potential production, above the trend) and inflation. (Recall that when in the economy, the actual GDP is higher than potential, it corresponds to the inflationary break). The economy in this state is called "overheated" ("Overheated Economy"); 2) Phase - recession or slump. The economy is gradually returning to the level of trend (potential GDP), the level of business activity is reduced, the actual GDP comes to its potential level, and then begins to fall below the trend, which leads to the economy to the next phase - crisis; 3) W Phase - crisis (CRISIS) or stagnation (stagnation). The economy is in a state of recession gap, since actual GDP is less potential. This is a period of short-use economic Resources. high unemployment; 4) IV phase - revival or lifting. The economy gradually begins to emerge from the crisis, the actual GDP approaches its potential level, and then surpasses it until it reaches its maximum, which will lead to the boom phase.
Causes of economic cycles
In economic theory, the causes of economic cycles showed the most different phenomena: stains in the sun and the level of solar activity; war, revolution and military coups; presidential elections; insufficient consumption level; high population growth rates; optimism and pessimism of investors; changing money supply; technical and technological innovations; Price shocks and others. In fact, all these reasons can be reduced to one. The main cause of economic cycles is the inconsistency between the cumulative demand and the cumulative proposal, between the total costs and the total production volume. Therefore, the cyclic nature of the development of the economy can be explained: either by a change in total demand with the unchanged value of the cumulative supply (the growth of aggregate expenditures leads to the rise, their reduction causes a recession); either by a change in the aggregate supply with the unchanged value of total demand (the reduction of the aggregate supply means the decline in the economy, its growth is a rise).
Consider how the indicators on different phases of the cycle behave, provided that the cause of the cycle is the change in the total demand (total costs) (Fig. 2. (a)).
In the boom phase, the moment comes when the entire production volume produced cannot be sold, i.e. Cumulative expenses are less than the release. There is an overview, and at first the firms are forced to increase stocks. Inventory growth leads to coagulation of production. The reduction of production leads to the fact that firms are dismissed by workers, i.e. The unemployment rate is growing. As a result, aggregate income (consumer - as a result of unemployment, investment - due to the meaninglessness of the expansion of production in the conditions of falling aggregate demand), and, consequently, aggregate costs. Households, first of all, reduce the demand for long-term goods. Due to the fall in the demand of firms on the investment and demand of households on durable goods, the short-term interest rate is reduced (price for investment and consumer loan).
The long-term interest rate, as a rule, grows (in conditions of revenue and shortage of cash, people begin to sell bonds, the bond offer increases, their price falls, and the lower the price of the bond, the higher the interest rate). Due to the reduction of cumulative income (taxable base), tax revenues to the state budget are reduced. The value of state transfer payments increases (unemployment benefits, poverty benefits). Growing a state budget deficit. Trying to sell its products, firms can reduce prices for it, which can lead to a decrease in the overall level of prices, i.e. To deflation (in Fig. 2. (a), the release is reduced to Y1, and the price level falls from P0 to P1).
Faced with the inability to sell its products even at lower prices, firms (as rational existing economic agents) can either buy more productive equipment and continue the production of the same type of goods, but with less costs, which will reduce product prices, without reducing the profit (it is advisable to do if the demand for goods, manufactured firms is not saturated, and lower price reduction low income will provide an opportunity to increase sales); Either (if the demand for goods produced by the firm is fully saturated and even decline in prices will not lead to an increase in sales) to proceed to the production of a new type of goods, which will require technical re-equipment, i.e. Replacement of old equipment fundamentally different new equipment. Both, and in another case, the demand for investment goods is increasing, which serves as an incentive to expand production in industries producing investment goods. There begins the revival, employment increases, firms arrived, aggregate income increases. Revenue growth leads to an increase in demand in industries that produce consumer goods, and to expand production there. Revitalization, employment growth (reducing unemployment) and income growth covers the entire economy. The economy begins ascent. The growth in demand for investment and for durable goods leads to the increase in the cost of the loan, i.e. Growth of the short-term interest rate. The long-term interest rate decreases, since the demand for bonds increases and the price (market course) of securities increases. Price level is growing. Tax revenues increase. Transfer payments are reduced. The deficit of the state budget decreases, and the surplus may appear. Lifting in the economy, the growth of business activity is converted to the boom, in the "overheating" of the economy (y2 in Fig. 2. (a)), after which the next decline begins. So, the basis of the economic cycle is a change in investment costs. Investments are the most unstable part of the aggregate demand (cumulative expenses).
In fig. 2. The cycle is presented graphically using the AD-AS model. In fig. 2. (a) The economic cycle is shown due to changes in total demand (total expenses), and in Fig. 2. (b) - changes in the cumulative supply (total release).
In conditions when the decline in the economy is not caused by a reduction in total demand (total expenses), but by a decrease in the aggregate supply, most of the indicators behave in the same way as in the first case (real GDP, the unemployment rate, the magnitude of total income, stocks of firms, sales , profit of firms, tax revenues, the volume of transfer payments, etc.) The exception is an indicator of the total price level, which increases as the recession is deepened (Fig. 2. (b)). This is the situation of "stagniflations" - the simultaneous decline in production (from Y * to y1) and growth rate growth (from P0 to P1). The basis for exiting such a recession also make up investments, as they increase capital reserve in the economy and create conditions for the growth of the aggregate supply (shift of the SRAS1 curve to the SRAS0).
Indicators of the economic cycle
The main indicator of the cycle phases is the rate of economic growth (RATE OF GROWTH - G), which is expressed as a percentage and is calculated by the formula: G \u003d [(YT - YT - 1) / YT - 1] x 100%, where YT is real GDP of the current year, and YT - 1 is the real GDP of the previous year. Thus, this indicator characterizes the percentage change in real GDP (total release) in each next year compared with the previous one, i.e. In fact, a growth rate (Growth), and the growth rate of GDP. If this is a positive value, this means that the economy is in the lifting phase, and if negative, then in the recession phase. This indicator is calculated in one year and characterizes the rate of economic development, i.e. Short-term (annual) fluctuations in actual GDP, in contrast to the average annual growth rate used by counting the speed of economic growth, i.e. Long-term trends in potential GDP.
Depending on the behavior of economic quantities at different phases, the cycle identifies indicators:
- procyclic, which increase in the lifting phase and decrease in the recession phase (real GDP, the amount of total revenues, sales, profit of firms, the amount of tax revenues, the volume of transfer payments, the volume of imports);
- counter-cyclic, which increase in the decline phase and decrease in the lifting phase (the unemployment rate, the magnitude of the stocks of firms);
- acyclic, which do not have a cyclic nature and the magnitude of which is not associated with the cycle phases (export volume, tax rate, depreciation rate).
Types of cycles
Allocate different types of cycles by duration:
- centenary cycles lasting hundred and more years;
- Condratyev's "cycles", the duration of which is 50-70 years old and which are named after the outstanding Russian economist N.D. Kontreyeva, who developed the theory of "long waves of economic conjuncture" (Kondratyev suggested that the most destructive crises occur when the maximum fall points coincide the business activity of the "long-wave cycle" and classical; examples can serve as a crisis of 1873, the Great Depression of 1929-1933, stagflation of 1974-1975);
- classic cycles (the first "classic" crisis (overproduction crisis) occurred in England in 1825, and since 1856 such crises became world), which last 10-12 years and are associated with a massive update of fixed capital, i.e. equipment (due to the increasing value of moral wear of fixed capital, the duration of such cycles in modern conditions decreased);
- kitchin cycles lasting 2-3 years.
Selection different species Economic cycles are based on the duration of the functioning of various types of physical capital in the economy. Thus, the centers of cycles are associated with the advent of scientific discoveries and inventions that produce a real coup in production technology (remember, the "age of the pair" was replaced by the "age of electricity", and then the "century of electronics and automation"). Condratyev's long-wave cycles are the duration of the service life of industrial and non-industrial buildings and structures (passive part of physical capital). After about 10-12 years, physical wear of equipment (active part of the physical capital) occurs, which explains the duration of the "classic" cycles. In modern conditions, it is not physical, and its moral wear, occurring due to the advent of more productive, more advanced equipment, and since fundamentally new technical and technological solutions appear with a periodicity of 4-6 years, the duration of cycles becomes less . In addition, many economists associate the duration of cycles with a mass renewal of consumers of long-term goods (some economists even offer them to investment goods purchased by households), which occurs with a periodicity of 2-3 years.
IN modern economy The duration of the phases of the cycle and the amplitude of oscillations can be the most different. It depends primarily on the cause of the crisis, as well as on the characteristics of the economy in different countries: the degrees of state intervention, the nature of the regulation of the economy, share and the level of development of the service sector (non-production sector), the conditions of development and use of the scientific and technical revolution.
Cyclic oscillations It is important to distinguish from non-cyclic oscillations. For the economic cycle, it is characteristic that all the indicators change, and that the cycle covers all industries (or sectors). Non-cyclic oscillations are reflected:
- changes in business activity only in some industries that have a seasonal nature of work (an increase in business activity, for example, in agriculture in the fall during harvest and in construction in spring and summer and a decline in business activity in these sectors in winter);
- in the change of only some economic indicators (for example, a sharp increase in retail sales before holidays and the growth of business activity in the respective industries).
Recession is a cyclic decline in the economy, accompanied by a long-term decline in business activity and levels) for two quarters. This definition denotes the phase of the economic cycle, next after the period of economic lift (boom) and the replacing phase of the economic crisis and depression.
You can explain this term on the example of a situation where the country's enterprises began to produce less products, and people, respectively, to buy less. Such a fall is not critical, and the state can reduce its scope and consequences by introducing the necessary measures. Another question is how effective they are and will affect at all.
Possible effects of the economic downturn:
- increase in unemployment;
- inflation growth;
- fall of stock indexes;
- production decline;
- abroad.
Do not confuse this definition with depression. In the environment of economists there is a joke, simple language explaining the difference between these economic terms: "If the work has lost your neighbor, then this is a recession if you have lost work, then this is depression."
Types and causes of occurrence
The economic downturn can be caused by several reasons, which determine the type of recession, as well as means of dealing with it.
- The first type - the fall in the economy is caused by sharp and unplanned changes market conditions (Military actions, fluctuations in world prices for natural fossils, such as oil and gas). The level of development of many countries, including Russia, is closely connected. Their decline will certainly lead to a decrease in the state budget and, consequently, the level of GDP. According to experts, such an economic downturn is very dangerous, since the appearance of these reasons cannot be predicted and measures warning large-scale changes in the country;
- The second type - the reasons for the fall in the economy lift in reducing the volume of investments, reducing the purchasing power and the level of confidence of citizens. To resolve this situation, the state creates an artificial stir (changes the course of securities or prices for goods) and reduces interest rates;
- The third type - the economic downturn is caused by large public debts, the fall in quotations in the capital markets and shares, as well as cash outflow.
There is a certain paradox: as the data on a quarterly change of GDP is credited
Russian crisis - a consequence of recession?
With a large delay and can be significantly revised, official information about the occurrence of recession is often voiced when the country is either at the stage of the new lift, or in a state of a strong crisis (depression). Therefore, it is very important to accurately predict any fluctuations in GDP, as well as factors affecting such changes. Many developed countries create special bodies dealing with this issue. For example, in the UK, such an authority is the National Statistical Service.
World experience
Studying the world history, it can be concluded that this term is a non-usable phenomenon in the economy of many countries. Only in the United States after World War II, the decline in the economy was indicated by this definition of more than ten times, in the UK - at least 5 times. At the current period of globalization, the economies of many countries are so closely related that the economic downturn in a particular country can lead to a fall in the economy not only in other countries, but also to collapse on world stock exchanges. The longest economic decals affecting several countries at the same time occurred in 1998, from 2000 to 2001 and in 2008-2009.
It is impossible to avoid economic recession, its appearance is natural and is a way to verify not only the financial system of the country, but also the effectiveness of the state's action. Very often, the fall in the economy leads to a change in power in the country.
The recession period is a message to the state for the operational application of measures for the "revival" of the economy. It is worth noting that different countries Differently overcome the decline in the economy, and this means that there is no single mechanism to combat such a situation.
