Money, money circulation, money emission and inflation, rising prices. Inflation and issue of money Concepts of issue and issue of money

Most economists are of the opinion that inflation of up to five percent stimulates production growth and is considered a positive economic phenomenon.

To attract experienced employees, companies increase their wages, and the state does the same to stimulate employee productivity and achieve political goals. As a result, the purchasing power of the population increases and there is a shortage of certain categories of goods and services. Manufacturers increase their prices, and production profitability increases. This allows large sums to be invested in increasing gross production and technical modernization of facilities. The number of goods increases, the ratio of demand to supply in the market stabilizes, enterprises increase production, which simultaneously leads to an increase in profits. As a result, the opportunity again arises to stimulate employees by increasing their wages. And all processes in the economy repeat themselves in a circle.

But such a positive phenomenon is observed only in cases where inflation rates are moderate. With high rates of inflation, production growth does not keep pace with rising prices, the negative phenomena of shortages increase, and the standard of living of the population sharply deteriorates. To relieve tension, the government increases the money supply not backed by goods; the process becomes even more complicated and requires decisive measures to eliminate it. This negative phenomenon is present in both market and regulated economies. What is the difference between them?

• In a market economy, inflation manifests itself openly in the form of price increases. Moreover, prices can simultaneously increase for some goods and services and decrease for others. To determine the inflation rate, average values ​​from a specific list of goods are used.
• In a regulated economy, the state artificially restrains price increases; such a policy causes shortages.

In any form, inflation occurs for the same reason - the dominance of demand over supply. Purchasing power is increasing at an accelerated pace; production growth is not able to meet new market demands.

Reasons for appearance

Economic science distinguishes several factors of government behavior that catalyze the development of inflationary processes.

• Large budget deficit. Expenditure items increase; their amounts are not covered by revenues. The budget deficit is covered by the issue of money, the money supply increases sharply, and the commodity resource cannot provide it. The consequence is a sharp increase in prices for all goods and services.
• Artificial price regulation. Moreover, this can be done not only by government agencies, but also by large monopolies.
• Incorrect banking policy in the field of lending. Loans are issued to insolvent borrowers, and the amount of unreturned money increases. The resource for further lending is taken not from bank profits, but from unsecured government emissions.

These factors are monetary, but there are also psychological, so-called moments of expectation. Consumers react negatively to changes in the political system of states, to various events in the global economy, etc. As a result, there is a fear that high inflation will appear in the near future. Buyers strive to purchase the maximum number of goods at old prices in stock; this behavior provokes their shortage. As a result, the cost increases sharply, manufacturers are physically unable to saturate the market with their products in the shortest possible time, and inflation rates increase exponentially.

Hyperinflation

An extremely negative phenomenon, it almost completely paralyzes industry, the standard of living of the population is sharply deteriorating. During hyperinflation, price increases can be hundreds of percent per day, with annual rates reaching tens of thousands of percent. Why is production stopping?

Any technological process takes time; in addition, sales of products can take more than a month. During this time, the cost of raw materials exceeds the cost of finished goods, all production becomes unprofitable, enterprises go bankrupt en masse with all the further negative consequences for society.

Inflation is associated with disequilibrium in various markets and can be caused by various reasons.

Firstly, inflation is caused by an imbalance between government expenditures and revenues, expressed in the state budget deficit. If this deficit is covered by the emission of money (issue), the mass of money in circulation grows.

Secondly, the increase in military spending is one of the main reasons for chronic state budget deficits and an increase in public debt, to cover which the state prints new money. Also, military appropriations create additional effective demand, which leads to an increase in the money supply without adequate commodity coverage.

Thirdly, the general increase in the price level in the country is associated by various schools in modern economic theory and with changes in the structure of the market in the twentieth century. The modern market is a market of imperfect competition. An imperfect competitor has a certain degree of power over price. An imperfect competitor strives to maintain a high level of prices, for the purpose of which it reduces the production of goods and limits the influx of new producers.

Fourthly, with the growing “openness” of the economy of a particular country and its increasingly drawn into world economic relations, the danger of “imported” inflation increases. For example, the energy crisis of 1973 caused the price of imported oil to rise. Prices for other goods also increased.

Fifth, inflation becomes self-sustaining as a result of so-called inflation expectations. Many scientists in Western countries and in our country especially highlight this factor, emphasizing that overcoming inflationary expectations of the population and producers is the most important task of anti-inflationary policy.

Sixth, the cause of inflation is a reduction in real national output. It may be due to rising wages leading to higher production costs, a cyclical downturn in the economy, structural restructuring of industry, severance of economic ties, etc.

A decrease in real output with a stable level of money supply leads to an increase in the rate of inflation, since a smaller volume of goods and services is opposed by the same amount of money. However, this reason, compared to the first two, does not play a significant role in the inflation process. So, if in Russia in the 1990s. production decreased by approximately 2 times, the increase in the price level during this period amounted to thousands of percent. This means that the main cause of inflation is the growth of the money supply and the velocity of money circulation. It causes so-called demand inflation. The fall in production causes cost-push inflation.

What is the mechanism by which inflationary expectations influence the economy? The fact is that people, faced with rising prices for goods and services over a long period of time and losing hope of their reduction, begin to purchase goods beyond their current needs. At the same time, they demand an increase in nominal wages and thereby push current demand to expand. Expansion of current demand contributes to rising prices. Savings and credit resources are reduced, which constrains the growth of investment and, consequently, the supply of goods and services. The economic situation in this case is characterized by a slow increase in aggregate supply and rapid growth in aggregate demand. The result is a general increase in prices.

Many causes of inflation are observed in almost all countries. However, the combination of various factors in this process depends on specific economic conditions. Thus, immediately after the Second World War in Western Europe, inflation was associated with an acute shortage of many goods. In subsequent years, government spending, the price-wage ratio, the transfer of inflation from other countries, and some other factors began to play a major role in promoting the inflation process.

In the former USSR, along with general patterns, the most important cause of inflation in recent years can be considered a unique disproportionality in the economy, which arose as a consequence of the command-administrative system. The Soviet economy was characterized by an excessive share of military expenditures in GNP, a high degree of monopolization of production, distribution and the monetary system, a low share of wages and other features.

The famous economist V. Novozhilov noted that the complexity of the problem of inflation and at the same time its “Achilles heel” is that it is extremely difficult to adapt the amount of money to the amount of goods, but producing paper money in the desired amount is not so difficult and - most importantly - practically nothing not worth it. This is a huge temptation for those who have the power to create money. The personal interest of everyone who creates “intangible” money is to create more and more of it; for money there is no limit to saturation, for it there is no limit to overproduction. True, Novozhilov continued, when there is an excess of money, money depreciates, but it also costs nothing. And if the entire national economy does not benefit from the excess money, then the issuer receives a very real increase in wealth, the source of which is the damage of those who are far from the issue.

Since inflation can be defined as an imbalance between supply and demand, inflationary processes are formed either on the demand side or on the supply side. Thus, the main sources of inflation are supply and demand. Demand-pushed inflation is called demand inflation, and supply-driven inflation is called supply inflation(or cost inflation).

At demand inflation a violation of the relationship between supply and demand occurs on the demand side. The main reasons here may be the expansion of government orders (military and social), an increase in demand for means of production in conditions of full and almost 100% utilization of production capacity, as well as an increase in the purchasing power of workers due to rising wages as a result of the concerted actions of trade unions. As a result, there is an excess of money in circulation relative to the quantity of goods, and prices rise.

In general, demand-side inflation is determined by the following factors:

Average annual economic growth rates;

The situation on the labor market and the current level of full employment;

Dynamics and growth rates of components of aggregate demand;

The ability of economic agents to predict future price increases.

Cost inflation means an increase in prices due to an increase in production costs. The reasons for the increase in costs may be oligopolistic pricing practices and the financial policy of the state, rising prices for raw materials, and the actions of trade unions demanding higher wages. Production costs rise, then they are transferred to the price of manufactured products. The increased price of goods is paid by the buyer. If a product serves as a resource for subsequent production for the buyer, his costs also increase, which forces the entrepreneur to compensate for losses with an increased price. A kind of inflationary transmission mechanism emerges.

In general, cost-push inflation is determined by the following factors:

The presence of imbalances and bottlenecks in production (structural inflation);

Changing the structure of the market towards its greater monopolization;

Violation or disruption (shock) of the proposal;

An increase in wages that outpaces the growth rate of labor productivity.

Since a general increase in prices leads to a decrease in real incomes of the population, both the demands of trade unions to increase the nominal wages of workers and the state policy of compensating monetary losses from inflation are inevitable. A vicious circle arises, the so-called inflationary spiral: rising prices cause demands for increased incomes of the population. And rising wages lead to rising costs for entrepreneurs, and hence prices for goods.

). The Treasury issues treasury notes and change coins.

The main passive operation of the central bank and one of the forms of emission is the issue of banknotes, the acceptance of deposits of commercial banks and the treasury, and operations for the formation of equity capital.

1. Fiduciary issue - issue of banknotes, banknotes, unsecured by the reserve of precious metals (primarily gold) of the issuing bank. Historically, the issue of banknotes was allowed only if there was a gold reserve, however, this rule was gradually abandoned. Nowadays fiduciary emission is dominant.

The main source of central bank resources in most countries is the issue of banknotes. At the present stage, the issue of banknotes is not backed by gold. Gold backing of banknotes has been abolished, although in some countries it formally continues to operate.

Central bank loans can be credited to commercial bank and treasury accounts maintained at the central bank. In this case, it is not the banknote issue, but the deposit issue of the central bank.

The source of resources for central banks are deposits from the treasury and commercial banks. Commercial banks can deposit part of their cash reserves, including mandatory ones, into interest-free accounts with central banks. In a number of countries, required reserves are credited to special accounts, usually interest-free. This procedure applies, in particular, in Russia. Central banks can also open time accounts with fixed interest rates for commercial banks. Typically, the bank's equity capital accounts for no more than 4% of liabilities.

2. Another form of issue is deposit-check issue. Produced by commercial banks and serves as the basis for non-cash payments. In terms of volume, deposit-check emission significantly exceeds the emission of cash.

3. Also one of the forms of issue is the issue of securities.

The procedure for issuing equity securities, unless otherwise provided by the legislation of the Russian Federation, includes the following stages:

There are two types of inflation.

1. Demand inflation. Traditionally, inflation occurs when there is excess demand. The demand for goods is greater than the supply of goods due to the fact that the manufacturing sector is not able to meet the needs of the population. This excess demand causes prices to rise. A lot of money with a small number of goods.

2. Cost inflation. This phenomenon is expressed in rising prices due to rising production costs. Depending on the rate of price growth in the market, inflation is distinguished:

Creeping, with an annual rate of price growth of 3-4%. Such inflation is typical for developed countries, which view it as a stimulating factor;

Galloping, with an average annual rate of price growth of 10-50% (sometimes up to 100%), which prevails in developing countries;

Hyperinflation, with annual rates of price growth exceeding 100%, is characteristic of countries in certain periods when they are experiencing a radical change in their economic structure.

Under the influence of inflation, the economic situation in the country is worsening, because:

Production volume decreases as price fluctuations and increases make production development prospects uncertain;

There is a flow of capital from production to trade and intermediary operations, where the turnover of capital is faster and there is more profit, and it is also easier to evade taxation;

Speculation is expanding as a result of sharp and uneven price changes;

State regulation of the inflation process means a set of government measures aimed at limiting price increases and stabilizing the monetary system through deflationary and income policies.

Deflationary policy includes methods of limiting money demand by reducing government spending, increasing interest rates on loans, increasing tax pressure, and limiting the money supply. But it does not contribute to economic growth. Income policy involves control and complete freezing of prices and wages or the establishment of strict limits on their growth.

Polesie State University, Belarus

The relationship between emissions and inflation.

The influence of the real sector of the economy on these processes

The role of emissions in the economy of any state, since money arose, has been very controversial. It affects the strengthening and weakening of the economy, increasing state budget revenues and covering their deficits, changing purchasing power and exchange rates of national currencies. In this regard, naturally, the attention of a number of economists is drawn to the issue of money issue.

The exclusive right to issue money in both non-cash and cash forms in the Republic of Belarus belongs to the National Bank of the Republic of Belarus.

Money emission, by definition, entails a change in the amount of money in circulation. Within reasonable limits, this change does not pose a threat to the economy, but if the rate of emission is excessive or insufficient, a number of problems arise.

The issue of money is the main cause of inflation. In modern monetary theory, the main cause of inflation is always and everywhere one issue. An increase in central bank assets entails high rates of growth in the money supply, which inevitably leads to inflation. Dozens of authors, using the example of high inflation in a variety of countries, have convincingly proven that the root cause of inflation is emission.

Typically, inflation is a product of incorrect monetary (monetary) policy of the state. It is necessary to tighten monetary policy and the situation will improve. Such monetary actions are calleddeflation . The entire set of these actions can now be observed in the Republic of Belarus. It is worth specially noting that with inflation, in addition to prices, macroeconomic parameters also change - the exchange rate of the national currency and/or the volume of the money supply (MS), and one of the macroeconomic signs of stabilization is the stabilization of the exchange rate and/or the stabilization of the money supply. Such a monetary policy must be carried out extremely carefully and limitedly, because at a certain stage of its application, it will already lead to bankruptcies and increased unemployment, which will reduce tax revenues and force the budget to incur additional expenses on social programs for the unemployed, which will force the state to launch emissions, which will start inflation again.

It should be emphasized that in the current situation, the government of our country must put the implementation of anti-inflationary policy in first place. Any attempt in the current Belarusian conditions to increase the money supply will lead to a depreciation and a new round of inflation. What we already observed in 2011, inflation for the year was 108.7%.

Analyzing the dynamics of money supply aggregates for 2010-2011, it is possible to justify such a high level of inflation.

Table 1 - Dynamics of money supply aggregates

Billion rubles

Note –

Fig.1. Diagram of the duality of money

Functions of money : 1) measurement all economic benefits, as well as natural substances drawn into the economy from nature; 2) mediation in the exchange of goods based on the universality of the commodity-money; 3) establishment and redemption debts, debt relations; 4) accompaniment economic acts in statics (creation of a company) and in dynamics (promotion of values ​​in the chain of economic redistribution - from subject to subject); 5) fixation of wealth, concluded in property objects and in income accruals; 6) simple (non-capital) accumulation, saving- accumulation of mass for large one-time expenses; 7) representation of the subject in socio-political economics.. The latter is a generalized characteristic of a subject, showing the whole world its success in economic activity. The list of the richest people is published annually in the open press.

In part 1), 2), 4) the universality of money as a measure of objects and accompaniment of their movement is associated with the phenomenon of value from nature - with the involvement of natural valueless substance in the economy. A massive wave of a product arriving from nature, when registering its value in the economy, will require a corresponding amount of money. And only then, with the help of money, the current promotion of value is carried out across the redistribution of the economy - from owner to owner.

However, money are not a direct consumer benefit - they only provide access to any benefit in the economy. Moreover, they are relatively independent of the values ​​in their separate movement. Such detachment and isolation creates conditions for possible inconsistencies, inflation, and crises.

Money can be represented in the coordinates “subjects-space-values” - see Fig. 2.

Fig.2. Money in the coordinates “subjects-space-values”

From diagram_2 it is clear that all the values ​​contained in the economy and drawn into it from nature are commensurate in money, that money serves the market, ensures the operation of business and overcomes state borders..

Types of money – planned and real. Plan money exists in financial plans - funds, budgets, reserves, as well as in accounting entries, for example, when calculating earnings. Real money exists in two forms - cash and non-cash; the first ones are in the hands and in the cash registers of the subjects, and the second ones are in the subjects’ bank accounts. Planned money is always scheduled and distributed in private amounts in the cells of tables of financial plans. Based on the formula of economic relations “ who owes whom, for what reason and how much ", each amount in the financial plan shows the tension in the relationship between the payer (source) and the recipient (budget). This tension set by the plan is relieved by the movement of real money in the process of economic activity, during the execution of the plan. Real money can be concentrated in the same hands in any uneven quantities, and non-cash money can be concentrated in huge amounts in any bank account and in the shortest possible time. Wherein moving real money in space, from account to account and from bank to bank occurs almost instantly and the entire amount at once, and not per penny, ruble, eureka... Money in real circulation exists in cash and non-cash forms. Non-cash is a form of existence of money in computer memory cells, or in bank accounts. The owner can manage such money remotely - using bank electronic cards.

Final Definition money: universal economic essence in the unity of opposites - the measure of all values ​​and the carrier of energy in the economy; is revealed in the functions - measurement of goods, mediation in the exchange of goods, establishment and repayment of debt relations, support of economic acts, recording of wealth, simple accumulation and representation of the subject in the socio-political economy.

The presence and movement of money in the economy gives rise to the problem of the size of the money supply, which ensures the normal running of the national economy. The relationship between the value of natural goods and money raises the issue of adding money into circulation, or issuing it, withdrawing it from circulation, as well as the issue of depreciation of money, or inflation.

Money supply- this is a set of cash and non-cash money, means of payment that ensure the movement of goods, services, and work in the national economy of the country. The amount of money needed for the normal operation of the economy can be calculated in different ways. According to one approach, this calculation is carried out based on annual average statistical indicators relating to past periods or for the future:

Dp = (Stov.prod. – Stov.kr + From pl. – Svsp) / Ob.d, where (1)

Dp – amount of money required

Stov.prod – the amount of commodity sales (goods, works, services)

Stov.kr – amount of commodity sales on credit

Spl – amount of payments to fulfill obligations

Svzp – the amount of mutually extinguishing payments

Ob.d – number of money turnovers

According to another approach, the formula for the mass of money required for the normal operation of the economy: Dp = Dn + Dt – Ds, where (2)

DP – the economy’s normal need for money

Dn - new money, in demand by the mass of natural substances involved in the economy and received a monetary value

Дт – money of current economic turnover

Ds is “old” money, corresponding to a product that has been retired from circulation for final consumption.

The need for cash is determined by the amount of earnings accrued for distribution to employees. But at the same time, non-cash turnover of payment transactions is expanding - using electronic credit cards.

Thus, the intrinsic value of money is deceptive– the value of money in economics is related to the value of the product. Therefore, we can talk about different qualitative values money-currencies different countries. Indeed, if Behind the American dollar or the British pound sterling, the European euro is a hard-won history, engineering, technology, focus on consumer needs product , then the “field” of this currency, its purchasing power is much stronger than the ruble, behind which stands a product closer to “free nature” and less subject to mental, engineering, technical and technological processing by living human energy, less focused on human needs - the last resort recognizing the value of the product.

To analyze quantitative changes in money flow and circulation, indicators of “monetary aggregates” are used - in Russia these are M0, M1, M2 and M3.

M0 – includes all cash in circulation – paper and coin;

M1 – includes M0 + money in all bank accounts of a current nature + deposits of the population “on demand”;

M2 – includes M1 + time deposits of the population;

M3 – includes M2 + deposit and savings certificates + government loan bonds.

Natural relationships are the excess of each subsequent monetary aggregate over the previous one.

Money emission and inflation. Money moves in the economy - towards goods and services, work. However, with an increase in the commodity mass and its value, the old money may be missing. In addition, the expansion of the economic sphere gives rise to new needs for the capital development of nature and its involvement in the economy. These circumstances will require an additional amount of money.

Money emission is the release of additional money into circulation, which is undertaken due to various circumstances, and leads to an increase in the money supply in the economy. In accordance with the types of money, the issue of cash and non-cash money is undertaken. Cash emission is the prerogative of the Central Bank; it makes decisions on the timing and scale of the issue based on macroeconomic and technical analysis of money circulation in the country.

The issue of non-cash money is carried out in the system of commercial banks, has the property of a “multiplier” and leads to the creation of additional “credit money” aimed at capital applications. non-cash money at all levels of multiplication. If the project does not give the expected return, no real values ​​are created, then a “failure” is created in the monetary field of the economy, which leads to inflation - the depreciation of money, with which less and less real values ​​can be bought.

In addition, in the banking system, often in connection with the implementation of financial plans that are not backed by real revenues, the phenomenon of money generation manifests itself - namely bank money- with the dangerous possibility of the total money supply exceeding those limits that are limited by the commodity mass. In this case, it may occur inflation effect, that is, the depreciation of money, since the value of the excess mass becomes fictitious. The banking system also plays an important role in the processes of real money circulation - non-cash payments between economic entities are carried out through its network. But in credit relations, money performs a special function (see below).

Inflation also has a natural basis - the depletion of natural resources, the extraction of which is being moved to hard-to-reach areas and is becoming more and more expensive. Such natural inflation throughout the world is estimated at 1-2% of the money supply. That is why owners of money are looking for a profitable application of money that will maintain its value by increasing the amount of money in the property.

Money waves- the phenomenon of demand for money to meet the waves of new natural values ​​arriving from natural nature, as well as movement through communication channels in the banking system network.

Money turnover can be considered based on the movement of a product-commodity, which begins its circulation in the economy with raw materials from a free, non-monetary nature - which requires monetary valuation and monetary support from subject to subject, and ends in unproductive consumption that does not require money. At the same time, money is freed from accompanying the goods and can be opposed in a “wave” to new portions of natural resources involved in the economy - formula (2).

Usually in economics the so-called “ cash flows “- an idea of ​​some “movement” of money through financial distribution channels.. However, such an idea is valid only for cash circulation, in which real banknotes, banknotes “move” and are transferred from one person to another. For non-cash payments, more precisely, not in-line, but wave movement of money in a network of banking and accounting accounts. That is, absent ruble-by-dollar flow money from one place to another, but there is a wave movement - the movement of the entire money supply, as a rule, corresponding to the movement of the mass of material and intangible goods - in some equilibrium (taking into account inventory and cash deposits outside of circulation). As soon as natural material-wave equilibrium in the economy is violated - by the discrepancy between virtual money and the value of produced real goods, unaccounted for real money, arbitrary emission of money - corresponding crisis situations arise that destroy the economic system.