Holistically defined theory of monetary relations. In the theory of money, separate trends and directions have been formed that develop on their own methodological foundations or compete with each other.
1. Quantity theory of money.
The first attempts to theoretically comprehend the essence of money were made by ancient thinkers Xenophon, Plato, Aristotle. Aristotle's studies contained hypotheses about the origin of money, the content of their functions, the justification of the place of monetary relations in the system economic relations.
Aristotle's ideas are reflected in the quantity theory of money, which was formed in 16-17 Art.
The original methodological principles of the quantitative theory of money were argued in most detail by the English scientist D. Hume (treatise On Money, 1752). The theory establishes a functional relationship between the level of commodity prices and the amount of money in circulation. The main postulate of this theory is that any change in the amount of money leads to a proportional change in the absolute level of prices for goods and services, and hence to a change in nominal GNP. Hume defined a relationship that has become classical: doubling the amount of money leads to a corresponding doubling of the absolute level of prices expressed in this money.
Hume's quantitative theory created a methodological basis for characterizing the principles of the formation of the value of money. The value of money in the concept of D. Hume is a conditional concept. As a circulation tool, they do not have their own value base. The value of money is representative (fictitious), that is, it is determined through the quantitative ratio of goods in circulation and the money supply serving this circulation.
At the end of the 19th - beginning of the 20th centuries. the ideas of the quantity theory of money continued to develop in the context of the rapid progress of the neoclassical school political economy. In its structure, 2 varieties of quantitative theory were formed:
Transaction option (I. Fisher "Purchasing power of money", 1921).
M - the amount of money in circulation
V is the velocity of money circulation, i.e. the average number of times a currency changes hands over a given period
Р - the average price of a unit of production (GNP deflator)
Y - the number of units manufactured for a certain period of production
This equation (I. Fisher's equation of exchange) shows a close relationship between the amount of money, the speed of their turnover and the price level.
Cambridge version (A. Pigou, A. Marshall).
k - Cambridge coefficient, which determines the ratio between nominal income and that part of the money that makes up cash balances. Therefore, the Cambridge version of determining the demand for money is called the theory of cash balances.
The Cambridge version is considered more flexible. Differences between the two options:
The Fisher equation considers the dynamics of cash flows at the macro level; the Cambridge school considers the motives for the accumulation of money by specific subjects market economy(microeconomic analysis).
In Fisher's equation, money is essentially a medium of exchange; in the Cambridge version, this function is supplemented by the function of a store of value.
The Cambridge version also takes into account the subjective foundations of the functioning of money, the psychological reaction of economic entities in relation to the use of cash.
Fisher only considers the money supply; in the Cambridge variant, the problem of the demand for money, the determination of the motives for their accumulation in cash desks and on the accounts of business entities, becomes central.
2. classical theory money.
Of particular importance for economic theory was the scientific substantiation in the works of A. Smith of the position on the spontaneous origin of money. A special section of his work “Investigations on the Nature and Causes of the Wealth of Nations” (in 1776) is devoted to the analysis of this issue, in which, based on broad factual material, the position that the development of money is connected with the historical process of the social division of labor and the socialization of production is argued. In accordance with this, Smith follows the concept that the progress of monetary relations is determined by the operation of objective economic laws. The legal norms and monetary policy of the state should reflect the requirements of these laws, create a mechanism for their implementation.
Smith and Ricardo argued several important points regarding the definition of the commodity nature of money. According to them, money is a commodity that is no different from other goods. At the same time, their theoretical positions on the nature of paper money. In particular, Ricardo, pointing out that essential condition increase in national wealth is the stability of monetary circulation, the achievement of which is possible only on the basis of the gold standard, while emphasizing that the functioning of the latter does not necessarily involve the circulation of gold money. In order to reduce unproductive expenditures, they can and should be replaced by paper money.
Another line in determining the nature of monetary relations: the essence of money was determined as a technical instrument for the circulation of goods. Representatives of the classical school paid attention only to the intermediary role of money, their performance of the function of a means of circulation. They ignored one of the main functions of money - their purpose to play the role of a universal value equivalent in commodity circulation. “Gold and silver are like kitchen utensils” (A. Smith).
The idea that gold and silver only function as a technical instrument of exchange was shared by later representatives of the classical school. J.S. Mill argued that money is a special mechanism for the quick and convenient implementation of what was done without them, although not so quickly and conveniently.
This shortcoming in the interpretation of the functions of money was eliminated by K. Marx. The most significant in his theory is the definition of the essence of money as a universal cost equivalent. Money began to be regarded as not just a commodity, but a special commodity that performs a specified function.
3. Modern theories of money.
Keynesian theory of money.
JM Keynes Treatise on Monetary Reform (1923), Treatise on Money (1930), General Theory of Employment, Interest and Money (1936).
All classical and neoclassical literature proceeded from the idea of the neutrality of money in the economic system. The neoclassical concept of the market economy was essentially a model of a barter economy, in which money performed mainly ancillary functions. In contrast to this, Keynes put forward the position that money plays its special, independent role in the process of reproduction, acting as a source of entrepreneurial energy, an intermediary link between current and future economic activity, production costs and its final results. Keynes believed that it is impossible to foresee the development of economic events, either for the short or for the long term, if you do not take into account what will happen to money during the corresponding period.
According to Keynesians, the velocity of money is changeable and unpredictable. It varies in direct proportion to the rate of interest and inversely in proportion to the money supply.
Based on the thesis “money matters”, Keynes developed theoretical concept“regulated money”, which is based on a system of their broad state regulation and use in order to stimulate effective effective demand, and, accordingly, the investment process. According to Keynes, money, on the one hand, is an object of state regulation of the economy, and on the other hand, it is a direct tool for implementing such regulation.
Keynes became the founder of one of the directions of the theory of money - the theory of state monetary policy. The main postulates of this policy were directly embodied in the system of state regulation of economic processes in the leading Western countries (especially the United States and Great Britain).
Of particular weight is Keynes' position on the principles of implementing the policy of "cheap money" and preferential loan. He developed the concept of managed pricing and controlled inflation. The central position of the theory: the insufficiency of money demand is one of the determining causes of development crisis processes, decline in production and rising unemployment. Therefore, the money supply must be stimulated through the application of the "cheap money" policy and the appropriate use of the rate of interest. Keynes' adherence to the policy of "cheap money" became the reason that he was called a "born inflationist." According to Keynes, inflation stimulates economic activity, acting as a means of weakening the positions of the economically passive layer of rentiers - it reduces the tendency of rentiers to save.
At the same time, Keynes not only did not deny, but even defended a tough credit and emission policy in the conditions of economic recovery. Thus, the policy of "regulated money" is flexible and adjusted in accordance with the development of the economic cycle.
modern monetarism.
The ideas of monetarism, as one of the forms of the neoclassical direction of Western economic thought, originated in the 1920s. XX century. As an integral system of economic views, monetarism was formed in the 60s. One of the most famous representatives of this theory is a professor at the University of Chicago, a laureate Nobel Prize in Economics 1976 M. Friedman.
Monetarism as an economic theory has ramifications, which gives rise to ambiguity regarding the definition of its main content.
In general (wide) application, monetarism is a theory that studies the influence of money and monetary policy on the state of the economy as a whole.
Monetarism in a narrow (more specific) definition is interpreted as a system of theoretical views, according to which regulation money supply is the determining factor influencing the dynamics of cash income.
Since monetarism has much in common with the quantity theory of money, it is considered to be a modern version of the latter.
Monetarism is a combination of two basic principles:
Money matters, i.e. changes in the monetary sphere have a decisive influence on the general economic situation.
Central banks are able to control the amount of money in circulation.
In the 80s. the attractiveness of monetarism began to decline sharply. Some of the fundamental methodological postulates of monetarism were revised, and several currents emerged from its composition.
Neoclassical monetarists(Friedman) stand on the positions of absolute flexibility of the price mechanism and the corresponding effectiveness of monetary policy (the most radical group).
Monetarist Gradualists(Leider) believe that the elasticity of the price structure is insufficient. It slows down the reaction market mechanism to changes in the money supply, causing a time lag between the implementation of monetary policy and the reaction of the economy. Therefore, the task is to reduce the rate of inflation stepwise (the policy of monetary gradualism).
Monetarist pragmatists believe that in the fight against inflation should be used and financial instruments containment of income. We are talking about the organic combination of a tight monetary policy with an income policy (a position close to Keynesian).
In the structure of modern economic thought, there are two more currents that belong to the new conservatism: supply-side economics and the new classical school of rational expectations . The positions of these currents in determining practical advice monetary policy largely coincide with the views of neo-Keynesians.
TOPIC 4. MONEY MARKET
The essence and structure of the money market.
According to Brew and McConnell, the money market is the market in which the demand for money and the supply of money determine the interest rate (or level interest rates).
The objects of the money market can be: money, capital, securities and currency. In accordance with this, the following segments can be distinguished in the structure of the money market:
directly the money market;
capital market;
market valuable papers;
currency market.
Formation of the relative value and price of money.
Ensuring a balance between the demand and supply of money.
Maintenance of business relations.
The demand for money and the factors that determine it.
McConnell identifies the following types of demand for money:
Demand for money for transactions.
Asset demand for money.
bid
percent, Dt
demand for money, c.u.
In this case, a simplification is made: the amount of money for transactions is not associated with a change in the interest rate. In fact, the amount of money intended for transactions is inversely proportional to the rate of interest. As interest rates rise, entities reduce the amount of money intended for transactions in order to invest more money in assets that generate income (interest).
The presence or absence of a relationship between the demand for money for transactions and the interest rate depends on the income received:
If the income received does not exceed the cost of the "consumer basket", the rate of interest does not affect the demand for transaction money (all income is spent on meeting current needs).
The relationship between the demand for money and the rate of interest arises only in the case of the formation of cash balances. In this case, the rate of interest acts as a factor in the division of money into transactional and speculative purposes. An inverse relationship is formed between the rate of interest and transaction money.
bid
P 
percent, Da Dt Dm
demand for money, c.u.
The total demand for money is equal to the sum of the demand for money for transactions and the demand for money from the asset side.
Formation of the money supply.
The money supply is closely related to the issue of money. Issue of money in their broad sense carried out at two levels: 1 - central banks, 2 - commercial banks and equivalent financial institutions.
In most countries, the exclusive right to issue banknotes belongs to central banks. Paper money is printed at state mark factories, coins are minted at mints.
In the economic literature, central bank notes are referred to as "high performance money". Banknote issue has a credit character. Each issuance of a certain amount of banknotes in the financial report of the central bank must correspond to a corresponding credit position - a loan to the government, a commercial bank, or foreign assets. central bank with the help of economic instruments at his disposal, he is able to influence the formation of these debt obligations and thus regulate the issue of banknotes.
The money supply that is formed on state level, is not limited to banknote issue. In many countries, the means of payment of state treasuries are preserved: coins and a certain amount of paper money.
In countries with administrative economy treasury issue was directly related to financing budget deficit. In countries with a market economy, there is another system for servicing the budget deficit, which is based on the placement of government debt on the open financial market. The placement of state debt obligations on the open market affects the issuance processes, and hence the money supply. The direct issuance effect occurs only when government securities are placed in bank deposit institutions, including the central bank. By purchasing government bonds, the central bank creates a basis for further deposit-check emission, which leads to an increase in the money supply in circulation.
When the mechanism for creating money is considered not only in their function as a means of circulation, but also in the function of accumulation, and means not only cash, but also non-cash payments, then along with the central bank, commercial banks become the direct subject of the issuing process. They create bank money by making loans to their customers. When banks lend, the money supply increases; when the loan is returned to the bank, it decreases.
The specific nature of the value of money.
The relative value of modern money is related to its economic utility. The usefulness of a good is characterized by its ability to satisfy the corresponding needs of a person. The usefulness of money is determined indirectly - through the usefulness of other goods and services that can be obtained with this money.
The nature of the value of money depends on its functions:
If money is used in the function of a medium of exchange, then the value of money is its purchasing power.
If money is used in the function of a store of value (money as financial assets), then their value is determined through the amount of remuneration in the form of a percentage. The rate of interest is an indicator of the value of bank money.
Equilibrium in the money market.
Destructive for the economy as a whole, including the monetary system, is not only the excess of money emission, but also its lack, the dissatisfaction of money demand. Thus, the deepening of crisis processes in the United States during the years of the Great Depression of 1929-1933. stimulated by the erroneous actions of the Federal Reserve System, aimed at artificially reducing the money supply.
Restoration of equilibrium in the money market occurs as follows. A decrease in the money supply creates a temporary shortage of money in the money market. People and institutions are trying to get more money by selling bonds. The supply of bonds increases, which lowers their price and raises the interest rate. At a higher interest rate, the amount of money people want to have on hand decreases. Therefore, the amount of money offered and demanded is again equal at a higher interest rate. Similarly, an increase in the money supply creates a temporary surplus of money, which increases the demand for bonds and makes them more expensive. The interest rate falls and the money market returns to equilibrium.
In a developed market economy, there is an automatic mechanism for self-regulation of money supply and demand. We are talking about protective stabilizers that direct the development of the monetary system towards the establishment of equilibrium:
Price Stabilizer: An excess supply of money generates, through a price multiplier, an inflationary depreciation of money, a decrease in its relative value and a corresponding adjustment of the overvalued money supply to existing demand. In this way. Equilibrium in the money market is achieved by changing the inflation rate, which is balanced with the growth rate of the nominal money supply.
Credit multiplier: since credit emission is based on debt obligations determined by the real demand for money, this already regulates the quantitative parameters of the money market accordingly.
Substitution mechanism: with an increase in the money supply, participants in the economic process come to the conclusion that part of the assets that they held in cash is excessive. From this it can be predicted that they will give preference to the replacement of money by other assets (securities, durable goods, jewelry).
Velocity of circulation of money: in the case of a decrease in the amount of money, the velocity of circulation of each monetary unit increases.
TOPIC 8. LOAN IN A MARKET ECONOMY
Loan capital and loan interest.
Essence and functions of credit. Lending principles. Loan forms.
Credit relations and credit system.
1. Loan capital and loan interest.
Loan capital is a form of money capital, which is provided by its owner for the purpose of making a profit in the form of loan interest for temporary use by an entrepreneur. Loan capital is not directly invested by its owner in production or trade. This is carried out by another person - an entrepreneur, to whom the capital is transferred for temporary use. As a result, capital is divided into capital-property and capital-function: ownership of capital remains with the creditor even after it has passed from his hands to the borrower.
Sources of accumulation of loan capital:
Money capital, which is temporarily released in the process of circulation of industrial and commercial capital. This release is:
accumulation in the form of depreciation charges;
temporarily free funds are created due to the fact that the sale finished products and the purchase of new raw materials, fuels and materials do not coincide in time;
accumulation is carried out as a result of the accumulation over a certain time of the wage fund, as well as part of the income, which is distributed among the owners of the means of production.
Rentier capitals - money capital persons who do not themselves entrepreneurial activity, but live by receiving interest from the use of capital as property - issuing accumulated funds in the form of a loan.
The part of the population's money income and savings that temporarily exceeds their current consumption fund. These funds are concentrated in deposit accounts of banking and credit institutions and are converted into loan capital.
Free funds of state and local budgets, insurance companies, pension funds, other institutions.
1) the price of capital taken on credit (the classical direction of monetary theory);
2) payment for the sacrifice or the refusal of the owner of the money to immediately use them to acquire certain values (neoclassical school);
3) payment for parting with liquidity (Keynesian school).
The source of loan interest is the profit that the entrepreneur receives in the process of productive use of loan capital.
The loan capital market includes 4 main segments: the money market (short-term credit operations serving the movement working capital); capital market (medium-term and long-term credit operations serving the movement of fixed assets); stock market; mortgage market (credit operations, serving the market real estate).
2. Essence and functions of credit. Lending principles. Loan forms.
The functional form of the movement of loan capital is a loan.
Loan features:
Redistribution of monetary and financial resources available in the economy and their concentration in priority areas of economic activity.
Creation of additional to the existing in the economy purchasing power.
Capitalization of free cash income (accumulation of loan capital at the expense of real savings of individuals and legal entities. Through the mechanism of credit, these monetary resources are withdrawn from the state of temporary inactivity and are transformed into the form of loan capital).
Monetary service of circulation of capital in the process of its reproduction.
Accelerating the concentration and centralization of capital through the use of shares and bonds of corporate ownership.
Maintenance of the innovation process.
Ensuring the growth of the efficiency of money circulation (setting off payments, accelerating the circulation of money, creating various forms of bank money).
The use of credit as a tool for macroeconomic regulation of economic processes.
Recurrence.
Urgency (violation of this condition is a sufficient reason for the creditor to apply economic sanctions to the borrower in the form of an increase in interest or presentation financial claims judicially).
Payment.
Security.
Target nature of the loan.
Differentiated nature of the loan (differentiated approach to different categories of borrowers, for example, preferential lending terms for certain entities or areas of activity).
Commercial, commodity or trading (its traditional instrument is a bill of exchange).
Bank:
short-term, medium-term, long-term and on-call transactions;
targeted and general purpose;
secured, blank and under financial guarantees of third parties.
Consumer.
State.
International.
3. Credit relations and credit system.
Credit relations arise between the lender and the borrower regarding the mobilization of temporarily free Money and their use on the terms of repayment and payment.
The credit system is a set of credit relations, institutions regulating them, a credit mechanism and credit policy.
A credit mechanism is a certain set of principles, organizational forms, methods and rules that are regulated by the current legislation and provide the necessary conditions realization of credit relations.
Credit policy covers the system of financial and credit measures of the state aimed at achieving certain economic goals. The lending policy is based on relevant institutional institutions and a functioning lending mechanism.
An integral part of the credit system is the banking system - a set various kinds banks existing in a particular country in a certain historical period.
At various stages of the development of society, the composition of credit institutions changed in accordance with the evolution of the historical conditions for the development of national economies. However, there are some general principles building credit systems at the present stage:
distribution of functions of the central and other banks;
control and regulation of the activities of second-tier banks by the central;
the central bank does not participate in competition in the money markets within the state.
The rapid development of capitalism after the industrial revolution was accompanied by the expansion of the functions and operations of commercial banks, the emergence of specialized credit institutions. In many countries, central issuing institutions were created, savings banks and savings and credit associations appeared.
Intensive development of joint-stock companies from the second half of the 19th century. led to the emergence of new functions of existing banks and specialized lending institutions such as investment banks and companies. At the beginning of the 20th century a number of new credit institutions appear: foreign trade banks, institutions consumer credit etc.
The development of the credit system is also accompanied by the universalization of commercial banks, which currently perform almost all functions, with the exception of the issue of banknotes. Therefore, commercial banks are banks of a universal type.
By the nature of the functions performed, all credit institutions can be divided into emission, which are central in the credit system, commercial - banks of a universal type, specialized financial and credit institutions that perform certain functions or serve certain sectors of the economy.
CREDIT SYSTEM
Central Issuing Bank
Rice. The structure of the credit system.
In their structure, the banking systems of individual countries differ significantly. At the same time, there are a number of features inherent in all banking systems operating in a market economy. This is primarily a two-level structure. At the first level there is one bank (or several banks, as in the USA), which acts as a central bank of issue. All other banks are located at the second level of the banking system: universal and specialized.
Banking system requires constant monitoring by special authorities. Each country has a system of legal acts that regulate various aspects of banking. The activity of non-banking financial and credit institutions makes it possible to fill certain niches in the market banking services which for some reason remained unoccupied. Such institutions do not have the status of a bank, since they do not perform a set of basic money market operations; their activities, unlike banks, do not change the money supply in circulation.
The evolution of credit systems.
Credit institutions are not a modern invention. Over a long historical period, they developed in all countries, forming one or another national credit system, the main link of which is the banking system. The stability of the functioning of the entire economy largely depends on its functioning.
The evolution of the development of credit systems has proved the need for effective supervision of the activities of banks. The tasks of the supervisory authority are to guarantee the safety and sound functioning of banks. To do this, they must have at their disposal adequate capital and reserves necessary to cover the risks arising in the course of implementation banking operations.
The internationalization of banking and the objective process of strengthening relationships between banks from different countries of the world led to the intensification of the activities of the Basel Committee on Banking Regulation. The committee consists of the UK, Germany, France, the Netherlands, Sweden and Luxembourg.
Each country has a system of legal acts regulating various aspects of banking. Peculiarities historical development and the effect of various political and economic factors determined the specifics of the forms and methods of control over the work of banks. In many countries, not only central banks, but also specially created state bodies are involved in the supervision and control of the activities of banks.
The last few decades have been a period of profound change in credit systems around the world. These changes are primarily associated with the following processes:
deregulation of financial markets is a process of legislative reforms that have been carried out since the late 60s. and covered most of the countries with market economies. They were aimed at mitigating or completely abolishing restrictions and prohibitions in financial activities;
strengthening the role of non-banking financial and credit institutions - salient feature 70-90s;
increased competition in banking;
technological revolution - in banking, first of all, is associated with the process of computerization;
financial innovations - imply the emergence of operations that were not previously used (new types of deposits, loans, new money market instruments, securitization);
financial globalization - the expansion of the scope of activities of large banks beyond national borders, accompanied by the creation of a network of foreign branches and an increase in the share foreign operations in the banking business.
TOPIC 9. FINANCIAL INTERMEDIARIES OF THE MONEY MARKET.
Functions of financial intermediaries.
Types of intermediaries in the money market.
1. Functions of financial intermediaries.
Representatives of both demand and supply of money can enter the market on their own or using the services of financial intermediaries. Their main function is to assist in the transfer of funds from potential subjects of accumulation to potential investors and vice versa. Financial intermediaries create their funds by borrowing money from those who have savings, for which the latter are paid interest income. By accumulating funds in this way, they provide them at a higher percentage to investors. The difference between the received and paid interest income is used to cover the expenses of financial intermediaries and their profit. The activities of financial intermediaries are beneficial to all subjects of the money market:
There is no need to search for each other.
Reduces the risk of loan default or inefficient investment.
Increasing the interest income of depositors.
The total costs of the borrower for obtaining a loan are reduced by reducing the moral, physical costs and time spent searching for several persons with savings to obtain the required loan amount.
Individuals with little savings have the opportunity to take part in a business that yields higher returns (compared to lending a small amount), but which was not available to them due to the need for significant investments.
Often, for those who have savings, it is more attractive to receive a guaranteed income on their capital (in the form of bank interest, income on bonds, receiving pension rights) than the risk of participating in not always reliable projects (buying shares).
Financial intermediaries reduce the cost of financial transactions, which is achieved through unification and specialization (in this case, there is an effect of scale).
The risk of incomplete information is reduced.
For most savers and borrowers, it is more beneficial to deal with financial intermediaries who are professionals in their field than with small, obscure partners.
2. Types of intermediaries in the money market.
Differences in the financial systems of different countries also cause a somewhat different division of financial intermediaries into groups. The most extensive is the classification of financial intermediaries in the United States, where financial intermediaries are divided into three main categories: depository institutions, contract-type savings institutions,
depository institutions.
A depository institution is a financial institution that has the right to accept contributions and deposits. Their main functions are to attract funds from individuals and legal entities in the form of deposits and provide loans to the population and enterprises. From the point of view of money circulation and control over it, this category of financial intermediaries is the most important, since it is they who, by opening and closing deposits, influence the money supply in the economy. Types:
commercial banks.
savings institutions.
Savings and credit associations - financial institutions whose sources of income are savings, term and checking deposits; the accumulated funds are mainly used to provide loans secured by real estate. Since secured loans are provided for a sufficiently long period, the change in interest rates during this time significantly affects the financial position of the association.
Mutual savings banks are similar to savings and credit associations in functioning, but differ in organizational structure: mutual savings banks are always organized on a cooperative basis, and bank depositors are its co-owners.
Credit unions are cooperatives organized for the purpose of accumulating the savings of their members and their mutual lending (mainly for consumer purposes) in a certain social group. They unite persons who work in the same enterprise, are members of the same trade union organization or live in the same locality. Their funds consist of membership fees and loans from commercial banks.
Attract long-term savings on a contract basis. They form their funds through periodic contributions in accordance with contracts. A significant number of concluded contracts makes it possible, using the theory of probability and economic risk, to fairly accurately determine the total volume of future payments under contracts. This, in turn, enables contract-type institutions to control possible losses. Types:
Insurance companies raise funds by selling insurance policies and compete with other lending institutions when placing funds.
Pension funds are specialized institutions that accumulate funds intended for pension provision citizens after they reach a certain age. Pension fund assets are invested in corporate and government securities.
An investment bank raises long-term loan capital and transfers it to borrowers through the issuance and placement of bonds or other debt instruments. Acts as an organizational intermediary (ascertains the needs of borrowers, agrees on loan terms, the choice of the type of securities, their placement, organizes bank syndicates if necessary) and a guarantor between borrowers and investors.
Investment companies (funds) are companies that reduce the degree of risk for their clients. They act as an intermediary between investors and joint-stock companies. Investment companies issue their shares and list them on stock market, and the funds received are placed in stocks and bonds of many different companies, thereby reducing the risk of bankruptcy. They differ from investment banks in that they express the interests of individual investors. Distinguish investment companies open type, which undertake the obligation to redeem their shares on demand, and closed type, which do not undertake such an obligation.
Mortgage bank - a bank specializing in mortgage operations: issues long-term mortgage loans; accumulates resources through the issuance and placement of mortgage bonds; performs functions related to the packaging of mortgage loans.
Housing Bank - a bank that specializes in lending and financing housing construction.
A financial company forms its funds by selling commercial paper and issuance of shares and bonds. The proceeds are provided to consumers in the form of loans or credits for the purchase of expensive goods, home repairs and small business needs. Financial companies emerged in connection with the mass production of expensive durables. They tend to provide credit to consumers indirectly, that is, by purchasing consumer debt from trading firms. Distributed in the USA, Germany, Great Britain, Japan.
The mutual fund sells its shares to many small investors and builds a diversified portfolio of securities (mainly stocks and bonds) with the funds raised. This enables the fund's depositors, by pooling their funds, to gain, primarily by reducing unit costs for the purchase of shares or bonds in large blocks, as well as by diversifying the portfolio of securities, which would be impossible for each individual investor.
A money market mutual fund is a type of mutual fund that has emerged recently, has the features of mutual funds and at the same time somewhat advanced functions inherent in depository institutions (fund shareholders have the right to write checks with certain restrictions on their amount). The attracted funds of investors are invested in short-term (up to 60 days) high quality securities. The interest earned is paid to the shareholders of the fund. The ability to write checks ensures that the fund's shares function in the financial market like interest-bearing checking deposits.
The classical quantitative theory was formed in the 16th-17th centuries. and became the basis for the development of monetarist theory. The quantity theory of money, which states that the prices of goods are determined by the amount of money in circulation, belongs to the oldest doctrines in the history of economic thought. The first representatives of this theory were Aristotle, Xenophon, Plato, J. Bodin, Montesquieu, D. Hume, J. Mill. The period of origin dates back to the 16th century, when the rapid growth of commodity prices in Europe insistently demanded an explanation of the causes of this phenomenon. In addition, it was a period of domination in economic treatises of the ideas of mercantilism with its reverent belief in the special properties of precious metals as an important element of social wealth.
Boden put forward a hypothesis about the dependence of the price level on the amount of precious metals. PI. Montesquieu, D. Hume, J. Mill made generalizations based on a misunderstanding of the "price revolution" that took place in Europe. This theory got its name quantitative because its founders explained the influence of money on economic processes exclusively by quantitative factors, primarily by changing the amount of money in circulation.
According to the most common in the XVIII-XIX centuries. version of the quantity theory, provided that other conditions remain unchanged, the level of commodity prices, on the average, changes in proportion to the change in the quantity of money. This provision was first applied to metallic (gold and silver) money, and after the publication of the works of D. Ricardo - to paper (non-changeable).
At its inception, the quantity theory did not claim to explain the causes of price changes. Its main task was to substantiate the point of view that money is fundamentally different from other representatives of the commodity world due to the fact that they have no intrinsic value. And only with time did the thesis about the connection between the state of money circulation and price dynamics begin to dominate in the quantitative theory.
The first to suggest that the price level depends on the amount of precious metals was the French philosopher Jean Bodin. However, he did not put forward a statement about a direct, much less proportional relationship between changes in the amount of money and changes in prices.
Separate provisions of this theory were formulated in general terms by J. Locke (1632-1704). It was expounded in a more detailed form by J. Vanderlint (died in 1740), PI. Montesquieu (1689-1755) and D. Hume (1711-1776). D. Ricardo (1772-1823) was also a supporter of the quantitative theory.
Thus, the early quantitative theory was characterized by three postulates:
Causality (prices depend on the amount of money)
Proportionality (prices change in proportion to the amount of money)
Universality (changes in the amount of money have the same effect on the prices of all goods).
So, the leading place in the theory of money was occupied by the quantitative theory, the main methodological principles of which were the following:
The purchasing power of money and the prices of commodities are established on the market, which contradicted the theory of value, but explained the changes in the prices of commodities depending on the amount of money in circulation;
All money is in circulation, which ignored the function of accumulation and its role in regulating the money supply;
The purchasing power of money is inversely proportional to its quantity, and the price level is directly proportional to the quantity of money;
The concept of the value of money is purely conventional, since money receives it only in the process of exchange * 195.
* 195: (Yaremenko O.R. Money and credit: lecture notes / A.R. Yaremenko. - X .: KhGZU Publishing House, 2002. - 64 p.)
At the same time, it is obvious that as the forms of money develop, the structure of the money supply becomes far from homogeneous, since it attracts not only cash, but also bank deposits. React differently to an increase in the money supply and prices for various groups goods that grow unevenly. Further development of the quantitative theory of money is associated with the inclusion of the apparatus of econometric analysis and elements of the microeconomic theory of price.
The neoclassical version contains two theories of development: the transactional and the Cambridge versions.
Modern supporters of the transactional version of the quantitative theory of money were I. Fisher and M. Friedman.
A significant contribution to the modernization of the quantitative theory was made by I. Fischer (1867-1947) - an outstanding representative of the mathematical school in modern economic theory, one of the founders and the first president of the International economic society(1931-1933). In "The purchasing power of money, its definition and relation to credit, interest and crises" (in 1911) he tried to formalize the relationship between the mass of money and the level of commodity prices.
Equation of exchange- this is an equation that relates the statistical amount of money in the economic system with its other parameters (price level, level of real production or goods that are in circulation, velocity of money circulation) * 196:
* 196: (Ibid.)
where (Money) - the average amount of money in circulation in a particular society during the year;
(Velocity) - the average number of turnovers of money in their exchange for goods;
(Price) - the average selling price of each individual product purchased in a particular company;
(Quantity) - total quantity of goods.
It follows from the equation of exchange that any change in the static (i.e., unchanged) quantity of money must lead to corresponding changes in the price level, real output, velocity of circulation, or a combination of these variables.
Fisher's formula is incorrect for the terms of the gold standard, because it ignores the intrinsic value of money. However, with the circulation of paper money, inexchangeable for gold, it acquires a certain rational content. Under these conditions, a change in the money supply affects the level of commodity prices (although, of course, he somehow idealized the price mechanism, because he had in mind the absolute elasticity of prices). Fisher, like other neoclassicists, started from the model of perfect competition and extended his conclusions to an economy in which monopolies existed and prices had already significantly lost their elasticity. There are other flaws in Fisher's concept that are characteristic of quantity theory, in particular, the exaggeration of the influence of money on commodity prices. From his formula it follows that the money supply plays an active role, and prices - a passive one, and only the money supply is an independent variable, while in fact there is a corresponding relationship. In conditions of monopolistic pricing, the growth of commodity prices is often the cause of the expansion of money circulation.
Many modern economists characterize the equations of exchange as the equality MV = PQ, which, in their opinion, expresses the act of exchange "M - C" over the entire mass of goods, that is, the amount of money with which the goods are bought is equal (identical) to the sum of the prices of the goods bought. However, this is a tautology, so the exchange formula cannot be an explanation for the aggregate (absolute) price level (Fig. 9.2). The exchange formula, according to quantity theorists, explains the absolute value of EQo, while the mechanism of supply and demand determines only relative deviations from it.
Rice. 9.2. Absolute price level from the point of view of quantity theory
On the basis of the equation of exchange, inflation has the following form: a violation of the laws of money circulation turns out to be an excess of the money supply in circulation compared to the real needs for it, or in the depreciation of money, which is accompanied by an increase in commodity prices without any improvement in the quality of products.
In I. Fisher's equation, there is a dependence in which the amount of money in circulation is the cause, and the price level is the effect. This is money supply inflation. Thus, it can be seen from the Fisher equation that the balance between the money supply and its commodity coverage occurs due to changes in prices. Prices are higher, the more money in circulation and the smaller the supply of goods.
I. Fischer represented inflation in the form of a simplified concept, according to which the fall in the purchasing power of money occurs in proportion to the growth of their quantity in circulation * 197.
* 197: (Yaremenko O.R. Money and credit: lecture notes / A.R. Yaremenko. - X .: Publishing House of KhGEU, 2002. - 64 p.)
One of the mistakes of I. Fisher is that, considering long periods of time, he conditionally accepted the variables V and Q as stable, after which only two remained dependent variables - the amount of money and prices. Although in fact the number of goods and the speed of circulation monetary units change and significantly affect money turnover and pricing.
The concept of M. Friedman is expressed by a formula that differs only outwardly from the formula of I. Fisher, but, in essence, is called upon to substantiate the same one-sided relationship between the money supply and prices * 198:
* 198: (Money and credit: textbook / M.I. Dump, A.M. Moroz, M.F. Pukhovkina and others; under the general editorship of M.I. Savluk. - M .: Finance, 2001. - 604 p. .; Demkovsky A.V. Money and credit: study guide. / A.V. Demkovsky. - M.: Dakor, 2005. - 528 p.)
where is the price index;
Amount of money;
The ratio of money supply to income;
National income at constant prices (or its physical volume).
A change in the money supply (M) can be accompanied by a corresponding change in each of the three values of the right side of the equation, that is, an increase in the money supply can lead either to an increase in prices (P), or to an increase in real national income (), or to a change in the coefficient reflecting the ratio money supply to income (K).
Fisher and his followers sought to explain that the velocity of money (V) and the level of production (Q) did not depend on the amount of money (M) and the price level (P). The speed of circulation of money, in their opinion, depends primarily on demographic (population density, etc.) and technical and economic ( public division labor, the availability of natural resources, the development of transport, etc.) parameters. The level of production is determined mainly by the conditions established in the labor market, and does not depend on the level of prices and the amount of money in circulation. Obviously, in a market economy, such references are unrealistic. The appearance of credit money contributes to the economy of circulation funds.
The founders of the Cambridge version of the quantity theory of money are economists A. Pigou, D. Robertson and D. Patinkin.
If in the transactional version of I. Fischer money performs only the functions of a means of circulation and a means of payment, then A. Pigou attached special importance to the functions of accumulation. At the same time, both versions of the quantity theory of money ignore the function of money as a measure of value and their role as a general cost equivalent. If I. Fisher's quantitative theory of money was based on the analysis of the money supply, then the Cambridge school put the demand for money on a par with the demand for goods and services as the basis for the study. Moreover, if for I. Fischer the determining factor is the presence of money in circulation, then for the Cambridge school, money is in special demand and they remain out of circulation in individuals and enterprises in the form of "cash balances". A. Pigou refers to the latter as cash and balances on current accounts, that is, he determines the amount of money, since he sees a direct connection between money and prices. This is confirmed by the Pigou formula * 199, which is close to Fisher's "exchange equation" MV = PQ:
* 199: (Demkovsky A.V. Money and credit: textbook. / A.V. Demkovsky. - M .: Dakor, 2005. - 528 p.; Shchetinin A.I. Money and credit: textbook / A. I. Shchetinin - 2nd ed., Revised and complete - M.: Center for Educational Literature, 2006. - 432 p.)
M = PRQ, or P = -, (9.3)
where M is the money supply;
R - the share of annual incomes of individuals and firms that they are willing to keep in cash;
P - price level;
Q - commodity mass (or the physical volume of trade, included in the final product).
The differences in the formulas of I. Fisher and A. Pigou is that the first one uses the rate of circulation of the monetary unit (V), and the second one uses the coefficient R, is the opposite in value to the indicator V, and if replaced in the formula by A. Pigou coefficient R, then we get the formula of I. Fisher.
The similarity of the two equations lies in the fact that I. Fisher relied on the constancy of the indicators V and Q when analyzing long periods of time, and A. Pigou considered the constant indicators R and Q, that is, both economists substituted the same variables M and P and derived causality of price increases (P) by changes in the money supply (M) * 200.
* 200: (Borinets S.Ya. International monetary and financial relations: textbook / S.Ya. Borinets. - 4th ed., Revised and complete. - M.: Knowledge, 2004. - 409 p.)
The main aspects of the problems under consideration are summarized in Table. 9.1*201.
* 201 (Demkovsky A.V. Money and credit: study guide. / A.V. Demkovsky. - M .: Dakor, 2005. - 528 p.)
|
Fisher's concept of quantity theory |
Cambridge variant |
|
The dynamics of cash flows in the Fisher equation is considered at the macroeconomic level |
Focuses on the motives for the accumulation of money by specific individual participants in the production |
|
Methodological basis of the equation of exchange - money as a means of circulation |
Money is not only a means of circulation, but also of preservation and accumulation |
|
The emphasis is on the objective principles of money circulation |
The psychological reaction of the enterprise to the use of cash is taken into account |
|
The transaction equation only deals with the supply of money. |
The central issue is the demand for money. |
In add. D in the table. D1 shows the main characteristics of the theories of money.
One of the first who realized this need and subjected to a significant revision the basic theories of money, including the quantity theory, was the Ukrainian economist M.I. Tugan-Baranovsky.
M.I. Tugan-Baranovsky (1865-1919) - Ukrainian economist, a native of the Kharkiv region, who at the age of 23 graduated from the Kharkov University course in two faculties at once: natural and legal.
However, the scope of M.I. Tugan-Baranovsky chose political economy. U1894 p., By publishing the work "Industrial crises in modern England, their causes and impact on people's life", he became the first Ukrainian scientist with a worldwide reputation (the book was translated into German in 1901, and then into French). For this work, M.I. Tugan-Baranovsky in 1894 was awarded a master's degree from Moscow University, and in 1895 he became a private assistant professor at St. Petersburg University and was accepted as a member of the Imperial Free Economic Society.
As a representative of "legal Marxism" M.I. Tugan-Baranovsky participates in the editing of Marxist journals, such as Novoye Slovo, Nachalo, Mir Bozhiy. U1898. The scientist publishes the book "Russian Factory", where he develops ideas about the development of capitalism in Russia, which became the basis of his doctoral dissertation, which he defends in the same year.
In the XX century. M.I. Tugan-Baranovsky, known as a disgraced scientist, was expelled from the capital for participating in student unrest. With the permission of the authorities, he returned to St. Petersburg in 1905. During this period, he was interested in the problems of the development of the cooperative movement. Since 1908, he became a member of the "Committee of Rural, Credit and Industrial Societies". In 1909 M.I. Tugan-Baranovsky began to publish the journal "Bulletin of cooperation", and in 1916. - One of the most famous - "Socialism as a positive doctrine."
Before the revolution, the work of M.I. Tugan-Baranovsky was published repeatedly, in particular his work "Fundamentals of Political Economy", where he most fully outlined his economic views. Also known is his work "Paper Money and Metal", published in 1916, in which the author argued submits his views on monetary problems.
M.I. Tugan-Baranovsky wrote that the theory of marginal utility and the labor theory of value are not mutually exclusive, but, on the contrary, complement and confirm each other * 202. He formulated the famous law according to which the marginal utilities of freely reproducible goods are proportional to their labor values. Considering these questions, the scientist proved that the correctly understood theory of marginal utility not only does not refute the labor theory of value of D. Ricardo and K. Marx, but is also an unexpected confirmation of these economists' doctrine of value. Like most Russian economists, M.I. Tugan-Baranovsky did not confine himself to a one-sided opposition of utility and cost as the two main factors of value. Considering that Ricardo's theory emphasizes objective factors of value, and Menger's theory emphasizes subjective factors, the scientist tries to prove that Ricardo's theory does not exclude, but only supplements the theory of marginal utility.
* 202: (Tugan-Baranovsky M.I. The doctrine of the marginal utility of economic goods as the reason for their value / M.I. Tugan-Baranovsky // Legal. Vestn. - 1890. - No. 10. - 24 p.)
The logic of M.I. Tugan-Baranovsky is as follows: "Marginal utility - the utility of the last units of each kind of product - varies depending on the size of production. We can either reduce or increase marginal utility by expanding or reducing production. The labor cost of a unit of product, on the contrary, is something objectively given, which does not depend on our will. economic plan the defining moment should be the labor value, and the determinable moment should be the marginal utility. If the labor value of the products is different, but the utility obtained in the last unit of time is the same, then we conclude that the utility of the last units of freely reproducible products of each kind - their marginal utility - must be inversely proportional to the relative quantity of these products per unit of labor time. In other words, it should be directly proportional to the labor cost of the same products." So, according to M.I. Tugan-Baranovsky, both theories are in perfect harmony.
The theory of marginal utility finds out subjective, and the labor theory of value - objective factors economic value. It was M.I. Tugan-Baranovsky substantiated the position that the marginal utility of freely reproducible economic goods is proportional to their labor values, which in the economic literature is called M.I. Tugan-Baranovsky.
A significant contribution was made by scientists to the theory of distribution, in which the process of distribution was seen as a struggle between different classes for a share in the social product, the growth of the product itself, i.e. all classes are equally interested in the development of production * 203. This approach was later developed in the works of many Western economists (J. Schumpeter and others).
* 203: (Tugan-Baranovsky M.I. Social distribution theory / M.I. Tugan-Bara-Novski. - St. Petersburg, 1913. - 114 p.)
Contribution of M.I. Tugan-Baranovsky in modern economic science is largely reduced to the creation of a modern investment theory of cycles, which provides modern concept"savings - investments" * 204. The main factor of cyclicality, in his opinion, is the disproportionate distribution of capital, which has increased due to the limited banking resources.
* 204: (Tugan-Baranovsky M.I. Industrial crises in modern England, their causes and impact on economic life / M.I. Tugan-Baranovsky. - L, 1984. - 370 p.)
His work "Industrial crises in modern England, their causes and impact on people's life" influenced the development of this area of economic science. In this work, arguing with the "populists", M.I. Tugan-Baranovsky proves that capitalism in its development creates a market for itself and in this regard has no restrictions on growth and development. Although he notes that existing organization of the national economy and above all the dominance of free competition extremely complicate the process of expanding production and accumulating national wealth.
M.I. Tugan-Baranovsky criticizes not only the theory of underconsumption as the cause of crises of overproduction, but also theories that explain crises by violations in the sphere of money and credit circulation.
In his theory, M.I. Tugan-Baranovsky took as a basis the idea of Marx about the connection between industrial fluctuations and the periodic renewal of fixed capital and laid the foundations for the tendency to turn the theory of overproduction crises into a theory of economic fluctuations. Noting that the years of increased creation of fixed capital are years of a general revival of industry, the scientist writes: "the expansion of production in each branch increases the demand for goods produced in other branches: the impetus for increased production is transmitted from one branch to another, therefore the expansion of production is always contagious and tends to cover everything national economy. During the period of creation of new fixed capital, the demand unambiguously increases for all goods "* 205. But the expansion of fixed capital has ended - factories have been built, railways carried out, etc., the demand for means of production has declined and their overproduction becomes inevitable. In connection with the dependence of all branches of industry on each other, partial overproduction becomes general - the prices of all goods fall and stagnation begins. M.I. Tugan-Baranovsky is convinced that if production is organized according to plan, then no matter how low consumption is, the supply of goods could not exceed demand.
* 205: (Ibid.)
With absolute certainty, we can say that M.I. Tugan-Baranovsky was the first to formulate the basic law of the investment theory of cycles: the phases of the industrial cycle are determined by the laws of investment. Violation of the rhythm of economic activity, which leads to a crisis, occurs, according to the scientist, due to the lack of parallelism in the markets of different areas during the period of economic recovery, disagreements between savings and investments, disproportion in the movement of prices for capital goods and consumer goods.
Researched by M.I. Tugan-Baranovsky and the role of loan capital in the process of cyclical fluctuations in the economy. He noted that an increase in loan interest is a sign that the free loan capital in the country is too small for the development of industry, and concludes that the immediate cause of crises is not an excess of loan capital that is not used, but its lack. As you can see, in M.I. Tugan-Baranovsky there are many elements of the modern investment theory of cycles.
A lot of attention to M.I. Tugan-Baranovsky paid attention to the quantitative theory of money. First, he criticized its classic version, which was set out in the writings of I. Fischer. The scientist considered the correct formula "the equation of exchange", but believed that Fisher did not add anything new to the quantitative theory of money at all, but only "successfully completed the work and gave an accurate and concise expression of the quantitative theory in mathematical form."
First, he proves, contrary to I. Fischer, that the price level is affected not by one, but by all the factors indicated in the "exchange equation": the number of goods entering the market, the amount of money itself, the speed of their circulation, the number of instruments of credit and the speed their appeals as well. Since all these factors are rapidly changing and changing in different directions, the changes in prices and the quantity of money cannot be proportional. This conclusion had not only theoretical significance, but also practical value, as it expanded the search front in the course of studying such phenomena as inflation, monetary policy, tools to influence the price level, and the like.
Secondly, M.I. Tugan-Baranovsky proved that the influence of the amount of money on prices is not unambiguous, straightforward, as the adherents of the classical quantitative theory admit. This influence can be carried out not in one, but in three directions, different in nature, as a result of a change:
public demand for goods;
Discount percentage;
Public perception of the value of money (later this factor was called inflation expectations).
Thirdly, M.I. Tugan-Baranovsky proved that the influence of the amount of money on prices is differentiated depending on the duration and volume of the increase in the amount of money. By this, he essentially refuted the postulate of proportionality, proved that money is not a simple intermediary of exchange, and prepared the basis for abandoning the postulate of the neutrality of money.
Fourth, M.I. Tugan-Baranovsky revealed the mechanism of interdependence between the total amount of money in the country, the amount of money that is out of circulation in savings and the velocity of money circulation, proved that the speed factor can affect prices in the opposite direction of the quantity factor in the direction, neutralizing the effect of the latter.
In studies of money circulation and the value of money, in particular paper money, M.I. Tugan-Baranovsky widely used the practice of Austria-Hungary. He noted that one of the most important tasks of the state is to provide paper money with appropriate value stability.
All these ideas of M.I. Tugan-Baranovsky created the basis for studying the ways in which money influences the economy and the mechanism for the conscious regulation of this influence. By this, he laid the foundations of the so-called theory of regulated money, which prepared public opinion for the rejection of full-fledged (gold) money and their replacement with defective money, the value of which would be systematically supported by the state and with which the modern monetarist theory appeared, primarily its Keynesian direction.
Thus, in the domestic political economy, two trends were traced - religious and scientific thinking, which at different stages of the development of Russia and Ukraine interacted with each other in different ways.
The first period that can be distinguished is the beginning of the 20th century. - 1917 At that time, scientists were actively working, occupying not only Marxist, but also other positions. Among them were many major economists who received worldwide recognition.
The first direction was headed by P. Struve, who was supported by S. Bulgakov, S. Frank, N. Berdyaev. These scholars used the methodology of neo-Kantianism and empiricism. The classical school was criticized from such positions, in particular its fundamental idea of a universal natural economic law* 206. It is easy to see that these scholars violated one of the most controversial, debatable problems of political economy - the relationship between the general and the specific in the development of the country's economy, and consistently agreed with the position of the German historical school.
* 206: (Singer L. Comparative characteristics banks and non-bank financial institutions in Ukraine / L. Spivak, I. Karakulev // Bulletin of the NBU. - 2006. No. 7. - S. 46-48.)
The second scientific political economic direction is associated with the names of M. Tugan-Baranovsky, A. Manuilov, V. Zheleznov, M. Sobolev, K. Pazhitnov, L. Kafengauz and others, who were characterized by a synthetic methodology that combines classical, Marxist approaches with elements marginalism.
At the beginning of the XX century. in domestic economics gradually increased Marxist influence. As you know, Marxism developed in Russia in two main forms - Leninist (Bolshevik) and Menshevik. The value of economic theories of M.I. Tugan-Baranovsky can hardly be overestimated, because they significantly influenced not only the economic development of Soviet society, but also the world economic ideas of the whole world, the entire world economy.
Keynesianism was formed at the turn of the 20-30s, when it was necessary to overcome a deep decline in production and unemployment.
One of those who defended the need for monetary regulation of economic processes was John Maynard Keynes (1883-1946), an outstanding contemporary economist who studied with the founder of the Cambridge School of Economic Thought, A. Marshall.
A peculiar understanding of the consequences of a long, severe economic crisis 1929-1933 pp., Covering many countries of the world, was reflected in the completely extraordinary provisions of that period, published by John Keynes in London, the book "The General Theory of Employment, Interest and Money" (1936).
According to many economists, "The General Theory" by John Keynes turned out to be a turning point in the economic science of the 20th century. and largely determines economic policy countries today.
Its main idea is that the system of market economic relations is by no means perfect and self-regulating, and only active state intervention in the economy can ensure the maximum possible employment and economic growth. The progressive public took this idea for granted and rightly conditioned, according to the contemporary American economist J.K. Galbraith, due to the fact that until the 1930s the thesis of the presence of competition between many firms, which are necessarily small and operate in every market, became untenable "because" inequality arises as a result of the existence of monopoly and oligopoly, extends to a relatively narrow circle people and can therefore in principle be remedied by the intervention of the state."
In many respects, the main idea of the great work of J. Keynes and many other scientists, in particular M. Blaug, is regarded in a similar way.
John Keynes formulated the theory of macroeconomic analysis, in which the main concepts and categories are: market capacity, the principle of effective demand (multiplier concept), general theory of employment, marginal efficiency of capital, interest rates. This theory considers inflation as a phenomenon based on a combination of factors that interact.
John Keynes drew attention to such divisions as income, employment, demand, supply, savings, investment. Special attention he devoted to money factors and problems of money. His goal was to find out how the various variables that affect economic development are determined.
For John Keynes, the main factor in the functioning of the economy is the volume of national income, which appears in two aspects:
As the source of all the purchasing power of a society of aggregate demand;
As a basis, which is formed from the size of that part of the enterprise's expenses, goes to the rationalization of production, that is, depending on production costs, which decrease as entrepreneurs strive for profit. The larger this part of the expenditure, the greater the national income. At the same time, all expenses are divided into two types: both for consumption and for savings.
Innovation economic doctrine John Keynes, in terms of the subject of study and methodologically, turned out, firstly, in the predominance of macroeconomic analysis over the microeconomic approach, made him the founder of macroeconomics as an independent section of economic theory, and, secondly, in substantiating the concept of the so-called effective demand, that is potentially possible and stimulated by the state. Based on his own "revolutionary" research methodology, John Keynes, in contrast to his predecessors and contrary to the prevailing economic views argued about the need to prevent, with the help of the state, a decrease wages as the main condition for the elimination of unemployment, as well as the fact that consumption, due to the psychologically determined inclination of a person to save, is growing much more slowly than income.
John Keynes did not object to the influence of the mercantilists on the concept of state regulation of economic processes that he created. His common judgments with them are obvious and are:
In an effort to increase the supply of money in the country (as a means of making them cheaper and, accordingly, lowering interest rates and encouraging investment in production);
Approval of rising prices (as a way to stimulate the expansion of trade and production);
Recognizing that lack of money is the cause of unemployment;
Understanding the national (state) nature of economic policy.
In developed countries, two main interpretations of inflation have become widespread: Keynesian and monetarist.
The connection between money and production has been noticed for a long time. money are important element any economic system that contributes to the functioning of the economy. Depending primarily on the assessment of the role of money and the monetary system in the development of the economy, there are various theories of money. These theories emerge, are confirmed, and dominate for a time. However, some of them, on the contrary, do not receive distribution, since practice does not confirm, or even simply refutes them.
There are three main theories of money - metallic (commodity), nominalistic and quantitative. These three theories are also called bourgeois theories of money, since they express the views of bourgeois economists on the essence of money, its functions and the laws of money circulation, and embody the basic requirements of the capitalists for money and money. monetary policy. These theories of money have been modified with the development of capitalism.
41. Commodity (metal) theory of money
This theory arose in England during the period of primitive capital accumulation in the 17th-17th centuries. One of the founders of the metalistic theory was W. Stafford (1554-1612). The metalistic theory of money was characterized by the identification of the wealth of society with precious metals, which were attributed to the monopoly performance of all the functions of money. Supporters of this theory did not see the need and regularity of replacing full-fledged paper money, and later they opposed paper money that was not exchangeable for metal.
The metalistic theory of money was developed in the era of the primitive accumulation of capital, playing a certain progressive role in the fight against damage to the coin (decrease in the weight of the metal). It was developed in its most complete form by the mercantilists (T. Man, D. Hops and others in England; J. F. Melon, A. Montchretien in France), who put forward the doctrine of full-fledged metallic money as the wealth of the nation. A stable metal currency, in their opinion, was one of the necessary conditions for the economic development of bourgeois society. The mistake of supporters of the metalistic theory was to identify money with goods, misunderstanding the difference between money circulation and commodity exchange, misunderstanding that money is a special commodity that serves as a universal equivalent. Representatives of the metalistic theory denied the possibility of replacing full-fledged metal money with their signs in internal circulation.
With the development of capitalist production, new problems arose before bourgeois economists: the need arose for development for the internal circulation of credit money. The theory of money as wealth is disappearing from the scene. Critics of mercantilism denied the commodity nature of money and developed a nominalist theory of money.
42. Classical quantity theory of money.
The theory that prices (and hence the value of money) change, other things being equal, with the amount of money in circulation. Expressed mathematically, a purely quantitative approach is as follows
where P is the general price level, M is the amount of money, T is the total volume of commodity transactions.
Quantity theory is primarily a theory of the demand for money. It is not a theory of production, or money income, or the price level. Any provision concerning these variables requires the combination of quantity theory with special conditions imposed on the money supply and other variables.
For economic units, the primary owners of wealth, money is one of the forms of wealth possession. For manufacturing enterprises (firms), money is a capital good, a source of production services, which, combined with other goods, create products sold by firms. Thus, the theory of demand for money is one of the branches of the theory of capital and, as such, acquires, perhaps, features that are not inherent in itself when it is combined: with the price of each individual form of capital; with the offer of capital; with the demand for capital.
The founder of the quantity theory of money was the French economist J. Bodin. This theory was further developed in the writings of the Englishmen D. Hume and J. Mill, as well as the Frenchman C. Montesquieu. D. Hume, trying to establish a causal and proportional relationship between the influx of precious metals from America and the rise in prices in the 16th-17th centuries, put forward the thesis: "The value of money is determined by their quantity." Proponents of this theory saw money only as a medium of exchange. The quantity theory of money establishes a direct relationship between the growth of the money supply in circulation and the growth of commodity prices.
The foundations of the modern quantity theory of money were laid by the American economist and mathematician Irving Fisher (1867-1947). I. Fischer denied labor value and proceeded from the "purchasing power of money". He singled out six factors on which this "purchasing power of money" depends: the amount of cash in circulation, the velocity of circulation of money, the weighted average price level, the quantity of goods, the amount of bank deposits, the speed of deposit and check circulation.
The modern quantity theory of money, studying macroeconomic models and the general relationship between the mass of goods and the price level, argues that the change in the price level is based mainly on the dynamics of the nominal money supply. She puts forward appropriate practical recommendations for stabilizing the economy through control over the money supply.
K. Marx gave a devastating critique of the quantity theory of money. He showed that adherents of this theory do not understand that precious metals, like other commodities, have an intrinsic value. K. Marx emphasized that the representatives of the quantity theory did not understand the functions of money as a measure of value and a means of accumulation.
A variation of the quantity theory of money is monetarism. 43. Monetary policy of Ukraine in the light of monetary theories
The main features of the technique of monetary regulation, which is carried out in accordance with the neo-Keynesian recommendations, are the change in the official discount rate of the National Bank; tightening or loosening direct restrictions on the volume of bank loans, depending on the size of aggregate demand and employment, the level of the exchange rate, and the scale of inflation; the use of operations with government bonds mainly to stabilize their rates and lower the price of government credit. The fundamental difference between the monetary control technique based on the monetarist approach is the introduction of quantitative regulatory targets, the change of which changes the direction of monetary policy. This or that indicator as a benchmark of monetary policy largely determines both the main objects and the very technique of monetary control. Such indicators can be both the total money supply and its individual aggregates. Monetary policy allows the accumulation of free funds of the state, enterprises, population and use the most rational and efficient. This is primarily predetermined by the fact that the products of enterprises cannot compete with similar imported goods. There are two main reasons: 1) outdated production technology, as well as high additional costs associated with storage, transportation, and the sales process, make domestic products much more expensive than imported ones; 2) the low standard of living of citizens of Ukraine, a persistent downward trend in per capita income leads to a drop in purchasing power. Basically, the population buys low-quality, but cheap imported goods, while domestic products have no market. Therefore, the main task of the state's monetary policy is to create conditions for a domestic producer to break through to the national and international commodity markets. Such conditions in the situation that has developed in the economy can be:
Determination of priorities in the structural restructuring of the economy;
Preferential lending to priority areas and enterprises. Establishment of state control over the obligatory provision of loans by commercial banks to enterprises determined by the state on preferential terms;
Creation of a more flexible taxation system, which would allow to stimulate the use of part of the profit for the development of production;
Creation of an appropriate legislative base, which makes it possible to simultaneously realize the interests of the entrepreneur and the state as a whole.
In economic theory, there are various interpretations of the essence of money and the reasons for their origin. However, despite the diversity of views, they can be conditionally reduced to two main approaches - subjective and objective. With a subjective approach, it is believed that money arose as a result of an agreement on this between people, and that money is only a product of the activity of the state, which put it into circulation in order to simplify the exchange of goods. With an objective approach, it is proved that money is the result of the development of commodity-money relations, in the process of which one of the goods stood out from the mass, behind which the role of the universal equivalent was fixed.
At different times and in different territories, a variety of goods were used as money: cattle, furs, skins, spears, salt, shells and, finally, metals. At an early stage of metal circulation, money was minted from iron, tin, lead, copper, silver and gold. Of metals, in the end, preference was given to silver and gold. These precious metals possessed the properties most suited to the function of money: uniformity, divisibility, portability, and storability.
Thus, as a result of the long historical development of exchange, a specific commodity arose: the monetary commodity, real money appeared, made of silver and gold. Money - this is a special kind of product that performs the functions of a universal equivalent.
However, despite the above properties, money made from gold and silver was eventually replaced by paper-based tokens of value or substitutes for real money. This was due to the fact that noble metals in the new economic conditions no longer meet the needs of economic development.
In contemporary Western economic literature money are treated as a generally accepted means of payment, which is accepted in exchange for goods and services, as well as in the payment of debts.
The essence of money is manifested in their functions. Classical political economy singled out five functions of money: measures of value; means of circulation; means of payment; means of formation of treasures (accumulation); world money.
Money as a measure of value. Money measures the value of all goods. This is possible because money itself is a specific commodity in which an abstract concept is embodied. social labor, i.e. have an exchange value. And commodities are comparable (qualitatively homogeneous and quantitatively commensurable) precisely as exchange values.
In modern Western economic literature, the function of the measure of value is called the function of the unit of account. Under unit of account refers to a monetary unit used to measure the value of a commodity.
Money as a medium of exchange. Commodity circulation, which is mediated by money, means the purchase and sale of goods. If a product is for sale, it means that it is exchanged for money. If a commodity is bought, it means that money is exchanged for a commodity.
On the whole, commodity circulation can be represented by the formula C-D-C, from which it follows that money in commodity circulation acts as an intermediary, or performs the function of a medium of circulation.
Money as a means of payment. Goods are not always sold for cash. Most often, firms sell their goods on credit, i. with deferred payment. After the period specified in the debt obligation, the debtor pays the due amount of money. Thus, acting as a medium of circulation, money serves as an intermediary in the exchange of goods, and performing the function of a means of payment, they complete the exchange process.
Money performs the function of a means of payment not only for the sale of goods on credit, but also for the repayment of other obligations.
In modern Western economic literature, the functions of money as a means of circulation and a means of payment are not differentiated.
Money as a means of creating treasures. Money, being a universal value equivalent in exchange for which any other commodity can be obtained, itself becomes the universal embodiment of social wealth. The desire to possess wealth in its general form induces commodity owners to accumulate money. In this case, the act of sale is not followed by the act of purchase. Money is withdrawn from circulation and performs the function of creating treasures. To fulfill the function of creating treasures, money must be both valuable and real. Paper-credit money does not perform the function of creating treasures, since it does not have its own value, but acts as a means of accumulation.
In modern Western economic literature, the function of money as a means of creating treasures is called the function of money as means of savings (accumulation).
World money. The most complete function of world money in the original sense was performed by gold coins during the time of the gold coin standard. No other type of money circulated as freely, without restrictions, as gold coins under the gold coin standard. In conditions when gold directly performed all the functions of money, the monetary and monetary systems - national and world - were identical. Under modern "world money" understand the money that serves international relations and is used in international settlements.
To define all types of funds in international settlements, the term "international liquid reserves" is used.
Under international liquid reserves refers to the stock of reserve assets that in one way or another can be used to carry out international settlements of the country, repay debt obligations in relation to government bodies, to private commercial and financial structures. The structure of international liquid reserves is as follows: gold; stocks of foreign freely convertible currencies; the country's reserve position in the International Monetary Fund; special drawing rights (SDRs); holdings denominated in "European currency unit" - ECU (currently "euro").
Theories of money. metal theory money appeared in the era of primitive accumulation of capital. Its representatives were the mercantilists W. Stafford, T. Man, D. Nore and others. They absolutized the functions of money as treasures and as world money and, on this basis, identified money with precious metals. They were active opponents of the defacement of coins by the state. Considered money as a thing, not as a social relation.
Creators nominalist theory of money were Roman and medieval lawyers. Later it was developed by J. Berkeley (England) and J. Stuart (Scotland). Criticizing the "metalworkers", they absolutized other functions of money - a means of circulation and a means of payment. "Nominalists" declared money to be purely conventional signs, units of account that serve the exchange of goods and are a product of state power.
founders quantity theory of money J. Locke (late 17th century), C. Montesquieu, D. Hume, D. Ricardo (late 18th century) are considered. They defended the value base of money. Supporters of the quantity theory of money believe that the value of the monetary unit and the level of commodity prices are determined by the amount of money in circulation. A significant contribution to the modernization of the quantitative theory was made by I. Fisher (beginning of the 20th century), A.S. Pigou (mid-20th century) and others. Their views are discussed in subsequent questions.
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MINISTRY OF AGRICULTURE OF THE RUSSIAN FEDERATION DEPARTMENT OF SCIENTIFIC AND TECHNOLOGICAL POLICY AND EDUCATIONFGOU VPO VOLGOGRAD STATE AGRICULTURAL ACADEMY DEPARTMENT OF ECONOMIC THEORY AND CCM COURSE WORK THEORY OF MONEY Completed by: student of the group UP-11Bukharev Denis. e. PhD, Associate Professor Oganesyan L.O. Volgograd, 2010 Content IntroductionChapter IClassical and Keynesian Theories of Money1.1 Classical Theory of Money1.2 Keynesian Theory of Money
Chapter II Money as financial asset: money market, supply and demand
2.1 Money as a financial asset: functions, types of money and monetary aggregates
2.2 Creating a money supplyConclusionReferences Introduction
In the conditions of cyclical fluctuations of the market economy, the theory of money becomes especially relevant.
In the modern economy, money is a symbol of social status, and a factor of material well-being, and a prerequisite for spiritual development - at the same time being - the cause of many crimes and moral degradation. Therefore, the views on this economic phenomenon are radically opposite - from condemnation, for example, on religious grounds, to admiration for their functionality.
The theoretical basis for the study of this topic was the work of leading economists around the world. These are textbooks and publications of such scientists as Galperin V.M., Agapova T.A., Kapkanshchikov S.G., Moiseev S.R.
Objective– to study the basic theories of money, their types, functions and money supply.
Achieving the goal requires solving the following tasks:
1) reveal the essence of the theory of money: classical and Keynesian;
2) study the money market and the demand for money;
3) identify the factors of demand and supply of money in the Russian economy;
Object of study- money.
Theoretical and methodological basis of the course work served as the theoretical research of Russian scientists on macroeconomics.
empirical base served as materials for the study of the monetary system of the world as a whole and Russia separately; articles of popular science magazines.
The term paper consists of an introduction, one chapter (includes five questions), a conclusion, a list of references.
Chapter I Classical and Keynesian theories of money
Before the advent of money, people turned to barter. Under it, it was necessary to look for potential partners capable of satisfying the needs and wishes of each other in goods and services, and then reaching agreement on the terms of the exchange. Thus, bartering results in high search costs. In other words, in bartering people have to spend a lot of time searching, negotiating and incurring other significant costs in trading activities.
In the case of money circulation, the sale of goods may not at all coincide with a simultaneous purchase by the seller: it may take place at a different time, in a different place, with a different trading partner. Paper money first appeared in China in the 12th century. In the US, the first paper money was printed in 1690 in Massachusetts. In Russia, the first issue of paper money, which was called "banknotes", occurred in 1769 by order of Catherine II (therefore, they were unofficially called "Catherine"). A feature of paper money of that time was their free exchange for gold money (the “gold standard” system was in effect).
Money, having become an intermediary between the seller and the buyer, has expanded the scope of commercial transactions, makes the market more capacious and gives it more dynamism. A. Smith compared money with highways, which facilitate the movement of people and goods and thereby accelerate economic development: the faster the product is sold, the sooner the manufacturer, having received income from the sale, will resume production and, possibly, expand or modernize his business, hence growth GDP.
Therefore, it is necessary to take money into account in economic analysis, ascertaining the reasons for its use by society, as well as the role that it plays in the level of output, the general price level and the rate of inflation.
1.1 Classical demand theory for money
The quantity theory of money determines the demand for money using the equation of exchange:
where M is the amount of money in circulation;
V is the velocity of money circulation;
P is the price level (price index);
Y - Issue volume;
It is assumed that the velocity of circulation is a constant value, since it is associated with a fairly stable structure of transactions in the economy. However, over time it may change - for example, in connection with the introduction of new technical means in banking institutions, accelerating the settlement system. When V is constant, the equation has the form MV=PY.
Under the condition of constant V, a change in the amount of money in circulation (M) should cause a proportional change in nominal GDP (PY). But, according to the classical theory, real GDP (Y) changes slowly and only when the value of factors of production and technology changes.
It can be assumed that Y changes at a constant rate, and is constant over short periods of time. Therefore, fluctuations in nominal GDP will mainly reflect changes in the price level. Thus, a change in the amount of money in circulation will not affect real values, but will be reflected in fluctuations in nominal variables.
This phenomenon is called the neutrality of money. Modern monetarists, supporting the concept of money neutrality to describe long-term relationships between the dynamics of the money supply and the price level, recognize the impact of the money supply on real values in the short run.
According to the rule of monetarists, the state must maintain the growth rate of the money supply at the level of the average growth rate of real GDP, then the price level in the economy will be stable.
The above equation of exchange MV=PY is associated with the name of the American economist Fisher. Another form of this equation is used, the so-called Cambridge equation:
where k=1/V is the reciprocal of the velocity of money circulation. The coefficient k also carries its own semantic load, showing the share of nominal cash balances(M) in income (PY).
Strictly speaking, the values V and k are related to the movement of the interest rate, but in this case, for simplicity, they are assumed to be constant. The Cambridge equation assumes the existence of different types of financial assets with different returns and the ability to choose between them when deciding in what form to store income.
In order to eliminate the effect of inflation, one usually considers the real demand for money, that is, where the value of M/P is called real cash reserves or real cash balances.
The classical quantitative concept of the demand for money.
The classical quantitative concept of the demand for money is based on three postulates:
causality (prices depend on the amount of money);
proportionality (prices change in proportion to the amount of money);
universality (changes in the amount of money equally affect the prices of all goods);
According to the classical concept, real GNP changes slowly, and with a change in the number of factors of production and technology involved, it is constant over short time periods, so the use of the amount of money in circulation will only affect nominal variables and will not affect real variables. The property of money not to influence real indicators is called the neutrality of money.
From here, the classics drew a conclusion that was called the classical dichotomy - the representation of the national economy in the form of two sectors isolated from each other: real and monetary.
In the real sector, there is a movement of real flows of goods and services, and in the monetary sector, money is circulated, which only serves the movement of these flows, without directly affecting them.
1.2 Keynesian theory of demand for money
Keynesian theory of the demand for money - the theory of liquidity preference - identifies three motives that encourage people to keep some of their money in the form of cash:
The speculative demand for money is based on the inverse relationship between the interest rate and the bond price.
If the interest rate rises, then the price of the bond falls, the demand for bonds grows, which leads to a reduction in the supply of cash (the ratio between cash and bonds in the asset portfolio changes), i.e. the demand for cash is declining.
Thus, there is an inverse relationship between the demand for money and the interest rate.
Summarizing the two named approaches - classical and Keynesian, we can distinguish the following factors of demand for money:
1) income level;
2) velocity of money circulation;
3) interest rate;
The classical theory relates the demand for money mainly to real income. Keynesian theory of the demand for money considers the interest rate to be the main factor.
The higher the interest rate, the more we lose potential income, the higher the opportunity cost of holding money in the form of cash, and hence the lower the demand for cash.
Keynesian concept of demand for money.
J. Keynes identified three motives that generate the demand for money: transaction motive, precautionary motive, speculative motive.
Demand for money for transactions (transaction motive)
People need money in order to pay for the acquisition of the goods they need in the periods between the moments of receiving cash income (from paycheck to paycheck).
The money demand function for transactions is represented as Lsd = nY, where 0 n0
n is the coefficient of cash balances for transactions, depending on the velocity of money circulation and the share of national income in the total social product, Lcd is the demand of the “public” for money for transactions.
In this "mechanical" way, the demand for money is completely determined in the concept of classical economists. For all its plausibility, it does not take into account the loss of income that is associated with holding a cash register.
Precautionary motive
The precautionary motive is the desire to hold money in order to secure in the future the ability to dispose of a certain part of one's resources in the form of cash. In essence, this motive is a kind of transactional motive - money is needed for transactions.
The precautionary motive is contradictory: on the one hand, an individual may lose the opportunity to benefit from transactions if he cannot quickly get cash, and on the other hand, the more money he saves in case of unforeseen circumstances, the higher percentage he loses by not investing in interest-bearing securities.
Demand for money as property (speculative motive)
In the modern economy, the property of economic entities takes the form of a portfolio of securities: money, bonds, shares and other titles of ownership. Property is formed as a result of savings. When making decisions about savings, an individual has to deal with two problems: what part of the income to save and what kind of property to turn their savings into. Money is one of the alternative forms of property.
Demand for money as property would exist even if economic entities could know exactly everything about their future income and expenses for the purchase of goods. The speculative motive for the demand for money is related to its function as a store of value, and not to the function of a means of payment.
Equilibrium in the money market.
Equilibrium in the money market is achieved when the entire amount of money created by the banking system is voluntarily held by the “public” in the form of cash balances, i.e. in the form of cash and checking deposits.
In accordance with the neoclassical concept, the demand for money is limited by the need of people for money to make purchases and payments in the intervals between the moments of receipt of monetary income; therefore, the volume of demand for money depends on the amount of income and the velocity of circulation of money. Keynes identified two additional motives for the demand for money: precautionary and speculative. Baimol-Tobin's "portfolio" approach to explaining the demand for money is based on optimizing the size of real cash balances, taking into account the transaction and opportunity costs of holding a real cash register.
Equilibrium is reached in the money market if the entire amount of money created by the banking system is voluntarily held by the "public" in the form of cash or perpetual bank deposits.
Keynesian money market demand
Chapter II Money as a financial asset: money market, supply and demand
The money market is understood as the totality of relations between the banking system that creates universal means of payment - money, and the "public" that makes demand for them. "Public" is considered to be all economic entities, except for banks. macroeconomic concept The "money market" is wider than the "money market" in the interpretation of financiers as a market for short-term loans.
Demand for money is understood as the desire of economic entities to have at their disposal a certain amount of means of payment (cash), which firms and the population intend to keep in their this moment. The demand for money is always the demand for goods that can be bought with it. (Vechkanov G. S., - Macroeconomics).
The fairly common belief that people's demand for money is unlimited is based on a misunderstanding. In fact, it means that with the desired amount of money one could buy a car, a house and other necessary goods. Thus, the desire to have as many goods as possible or as much income as possible is presented as an unlimited demand for money.
A distinction is made between the nominal demand for money, which changes following an increase in price, and the real demand for money, calculated taking into account the purchasing power of money.
The demand for money determines the proportion of assets that firms and households want to have in the form of cash, and not in the form of stocks, bonds, real estate, production equipment, etc. This is the real demand for money. The demand for money stems from the two functions of money - being a medium of exchange and a means of preserving wealth.
Features of the development of the money market in RussiaIn Russia, a two-tier monetary system has been created, consisting of the Central and commercial banks. Banks occupy a monopoly position in the organization of the money market, since only they have been granted the right to provide it with all types of modern money and to attract temporarily free funds to their accounts.
The main feature of the Russian money market is the initial stage of its development. This is reflected in the sluggish demand for business loans, the low professional level of banking and the lack of state regulation of monetary relations. The consequence of this is the flooding of the market financial structures pyramidal in nature, which artificially support the price of their shares by arbitrary setting of differences in the prices of their sales and purchases.
The existence of such structures is explained by the weak state of the advertising business and the awareness of the population about the real sources of cash income. Pyramid structures undermine public confidence in a market economy, reduce the resources of banks and impede the development of private entrepreneurship. One of the ways to limit their speculative transactions with securities is the issuance of government bonds for the public. The first such loan was issued for 1995-1996. in the amount of 10 trillion. rub. The bonds of this loan are freely sold and bought by all commercial banks on the territory of our country.
The size and structure of the money supply in modern Russia underwent significant changes compared to the size and structure of money circulation in the command economy. The share of cash in the M1 aggregate in the domestic economy is still significantly higher than in the United States. This is due to the relatively narrow range of assets offered by the Russian money market that can serve as a store of value. Cash as opposed to bank deposits able to ensure the anonymity of their owners, which is valued by the figures of the shadow economy. At the same time, there is a downward trend in the share of cash in Russia in the monetary aggregate M2. Thus, if this share in 1994 was 40%, then in 2003 this indicator dropped to 36.5%. One of the most acute problems is the normal interaction between money circulation and the production sphere. It should ensure the direction in the necessary volumes of financial resources for investment goals. The mechanism of this interaction was dismantled in Russia by the policy of eliminating the inflationary gap between supply and demand, mainly by monetarist methods of limiting the money supply and demand.
These methods gave a noticeable anti-inflationary effect, since an important factor the decrease in inflation was a gradual slowdown in the growth rate of the money supply. So, in 1992-1996. the average monthly growth rate of M2 decreased by 7.4 times, while the inflation rate - by more than 18 times. In 2002, the money supply increased by 32%, while inflation amounted to (calculated from December 2001 to December 2002) -15.1%. At the same time, the insufficiently flexible use of monetarist methods was one of the reasons for the emergence of a shortage of money, the consequences of which are known: a deepening decline in production, an increase in non-payments, and the flooding of the economy with money surrogates. Stimulating economic growth, and hence an adequate increase in demand, requires a certain emission of money. An increase in the supply of money with underemployment of resources, if it is skillfully directed to real sector, should not have tangible inflationary consequences. The current monetary policy pursued by the Bank of Russia is generally consistent with this approach.
2.1 Money as a financial asset: functions, types of money and monetary aggregates
According to Galperin, money is what society recognizes as money, this is their most general and complete definition.
The main types of money are commodity and symbolic money.
Money arose from the needs of commodity exchange, with the development and complexity of which it became necessary to single out a commodity that measured the value of all other commodities. In different countries, this role was performed by different goods: salt, cattle, tea, furs, leather, precious metals. This is how commodity money was born.
The distinguishing feature of commodity money is that its value as money and its value as commodities are the same.
With the development of exchange, the role of money was assigned to one commodity - noble metals (gold and silver). This was facilitated by their physical and chemical properties. Money has the following properties: 1) portability (a small weight contains great value - unlike, for example, salt); 2) transportability (convenience of transportation - unlike tea); 3) divisibility (dividing a gold bar into two parts does not lead to a loss of value - unlike cattle); 4) comparability (two bars of gold of the same weight have the same value - unlike furs); 5) recognition (gold and silver are easy to distinguish from other metals); 6) relative rarity (which provides noble metals with a sufficiently high value); 7) wear resistance.
Paper and metal money are symbolic money. Their peculiarity is that their value as commodities does not coincide (much lower) with their value as money. In order for paper and metal money to become legal tender, they must be fiat money, i.e. legalized by the state and approved as a universal means of payment.
In modern conditions, the following types of money are distinguished:
Paper money is credit money. There are three forms of credit money: 1) bill of exchange 2) banknote 3) check.
A promissory note is a debt obligation of one economic agent (individual) to pay another economic agent a certain amount, borrowed, within a certain period and with a certain remuneration (interest). The bill is usually given under commercial loan when one person purchases goods from another, promising to pay off after a certain period of time.
A banknote is a bill (debt) of a bank. In modern conditions, since only the Central Bank has the right to issue banknotes, cash is a debt obligation of the Central Bank.
The check is the order of the owner bank deposit give a certain amount from this contribution to himself or to another person.
Plastic cards are divided into credit and debit cards, but neither of them is money. First, they do not perform all the functions of money, and above all they are not a medium of exchange. Secondly, with regard to credit cards, they are not money, but a form of short-term bank loan. Debit cards (which for some reason in Russia are called credit cards) do not refer to money, since they imply the ability to withdraw money from bank account within the amount previously deposited on it, and therefore already included as a component of the money supply in the total amount of funds in bank accounts.
Electronic money is monetary obligations issuer in in electronic format, which are on electronic media at the disposal of the user. Such monetary obligations meet the following three criteria:
· Recorded and stored on electronic media.
· Issued by the issuer upon receipt from other persons of funds in an amount not less than the issued monetary value.
· Accepted as a means of payment by organizations other than the issuer.
Electronic money is usually divided into two types: based on smart cards (card-based) and based on networks (network-based). Both the first and second groups are divided into anonymous (non-personalized) systems, in which it is allowed to carry out operations without user identification and non-anonymous (personalized) systems requiring mandatory user identification.
It is also necessary to distinguish between electronic fiat money and electronic non-fiat money. Electronic fiat money is necessarily expressed in one of the state currencies and is a type of monetary unit payment system one of the states. The state by law obliges all citizens to accept fiat money for payment.
Accordingly, the emission, circulation and redemption of electronic fiat money takes place according to the rules of national legislation, central banks or other state regulators. Electronic non-fiat money - are electronic units of value of non-state payment systems. Accordingly, the emission, circulation and redemption (exchange for fiat money) of electronic non-fiat money occur according to the rules of non-state payment systems. Degree of control and regulation government bodies such payment systems in different countries are very different. Often, non-state payment systems tie their electronic non-fiat money to the rates of world currencies, however, the states do not ensure the reliability and real value of such units of value.
To measure the money supply, monetary aggregates are used: M1, M2, M3, L (in descending order of the degree of liquidity). The composition and number of monetary aggregates used vary by country. According to the classification used in the United States, monetary aggregates are presented as follows:
M1 - cash outside the banking system, demand deposits, traveler's checks, other checkable deposits;
М2 = М1 + non-check savings deposits, term deposits (up to $100,000), one-day repurchase agreements;
M3 = M2 + term deposits over $100,000, term repurchase agreements, certificates of deposit;
L = M3 + treasury savings bonds, short-term government bonds, commercial paper;
In macroeconomic analysis, aggregates M1 and M2 are used more often than others. Sometimes a cash indicator (M0 or C) is distinguished as part of M1, as well as a quasi-money indicator (QM) as the difference between M2 and M1, i.e., mainly savings and time deposits, then M2 = M1 + QM.
The dynamics of monetary aggregates depends on many factors, including the movement of the interest rate. V Russian statistics aggregates M1 (“Money”), “Quasi-money” (term and savings deposits) and M2 (“Broad money”) are used. (Agapova T.A. pp. 141-142).
Three functions are traditionally attributed to money: means of payment, means of account, means of storing value.
Instrument of payment. As a medium of exchange in the exchange of goods and in credit relations, money serves as a universal means of payment. In the presence of a universal means of payment, the direct exchange of one good for another is replaced by two assets: the sale of goods for money and the purchase of other goods with them. The transition from barter to purchase and sale facilitates the exchange of goods due to the fact that an individual who wants to exchange good A for B does not need to look for an individual who wants to exchange good B for A. One can sell and buy for money. In the modern economy, payments are made in three ways: 1) by transferring banknotes 2) by means of entries in bank accounts 3) by documents certifying the debt of one person to another. On this basis, three types of means of payment are distinguished: cash, giro-money, debt money.
The first two types of means of payment are created by the banking system, and the third - not by banks.
Means of account. As a means of calculation, money is a measure of the value of goods; it expresses the prices of goods. So the use of money as a means of payment and means of account greatly simplifies and facilitates the exchange of goods, i.e. reduces transaction costs (expenses for the implementation of exchange operations).
store of value. Having received money for goods sold or services rendered, people do not normally seek to spend it immediately. By keeping some of them for some time, they also retain the value they represent. However, in addition to money, other assets are suitable for storing value - stocks, bonds, real estate. Moreover, unlike money, stocks and bonds bring income to their owners. As a store of value, money has certain advantages. Under conditions of a relatively stable price level, they are easily and quickly converted into other types of property, which gives their value a certain certainty. As a universal means of payment, money, more than other assets, has the property of transferability; moreover, the transfer of money is not accompanied by a decrease in the value they retain. These two properties - certainty and transferability - characterize liquidity. And although all types of property and assets have this property to one degree or another, money is the most liquid form of storage of value. (Galperin V.M. pp. 83-87)
2.2 Creating a money supply
Central bank. The basis of the entire monetary system of the country is made up of banknotes and coins, which is why they are called the monetary base. Banknotes enter circulation in two ways. First, the Central Bank pays with them when buying gold, foreign currency and securities from the population or the state. Secondly, the Central Bank provides banknote loans to the state and commercial banks.
The total size of the country's monetary base at any given moment can be determined from the balance sheet of the Central Bank.
Let's represent the bank's balance sheet as a balance equation for asset and liability items:
VR+CB+KKB+KP+PA=NDO+DKB+DP+PP,
If government deposits are subtracted from the amount of loans to the government, then the net debt of the government (NWR) is obtained:
FZP=KP-DP
In addition, let's denote the difference between other assets and "other liabilities": ∆P=PA-PP. Then the balance sheet equation of the Central Bank can be written as follows:
VR+CB+KKB+FZP+∆P=NDO+DKB (4.1)
Key items in the central bank's balance sheet.
The left side of equation (4.1) shows how the monetary base arises.
By increasing its assets, the Central Bank creates money, and by reducing assets, it destroys it.
The right side of equation (4.1) shows that at any given moment the monetary base is distributed between the cash in circulation and the deposits of commercial banks in the Central Bank. Only the first term of the monetary base (MBM) can be used as a means of payment, so the second term (CMB) is not money. The deposits of commercial banks serve as the reserves of the monetary system.
The origins of the monetary base differ significantly from country to country, but the share of gold is currently negligible everywhere.
commercial banking system. Banknotes that have left the Central Bank are further distributed in two directions: one part is deposited in the cash register of households and firms, the other part goes to commercial banks in the form of deposits. When making a termless interest-free deposit, the depositor usually receives the right to pay his expenses by checks within the amount invested in the bank. As a result, along with banknotes, checks are used as means of payment.
Banknotes received as a deposit in commercial Bank, can be used by the latter to provide a loan, and then the number of means of payment will increase. When the loan is repaid, the amount of means of payment is reduced. Consequently, commercial banks can also create and destroy money.
Unlike the Central Bank, whose lending possibilities are theoretically unlimited, since its debt obligations are money, commercial banks have limits on lending. Opening for yourself. When opening demand accounts, they must take into account the fact that the depositor may at any time demand cash in the amount of his deposit. Therefore, in order to prevent bankruptcy, commercial banks always need to have cash reserves.
In the modern two-tier banking system for commercial banks, minimum reserve coverage standards are established in the form of mandatory interest-free deposits with the Central Bank. Their size is determined as a percentage of deposits in commercial banks. At the same time, the percentage is differentiated by types of deposits. Demand deposits have a higher standard than term deposits.
The norms of minimum reserve coverage are a tool for regulating the amount of money in the country and therefore change periodically.
In addition to the minimum reserve coverage, commercial banks often allocate a certain percentage of the deposits received to their reserve - they keep their own cash (excess reserves). In determining the amount of excess reserves, a commercial bank faces a problem similar to that faced by households in determining the demand for money due to precaution. The formation of reserves somewhat limits the ability of commercial banks to provide loans, however, the amount of loans issued by them may exceed the amount of deposits received by them.
Conclusion
Visible well-being macroeconomic indicators gives rise to optimistic forecasts and hopes for a speedy recovery Russian economy and its rapid growth. They can be justified in the implementation of the right policy, based on an understanding of the laws economic dynamics and taking into account the experience of past mistakes. But if the policy of the state remains passive, then it is quite likely that the development trajectory of 1996-1998 will be repeated.
The circulation of money in Russia, of course, needs to be improved; without this, a real economic recovery cannot be achieved. But one should not, in the current conditions, carry out any radical monetary reforms, including a return to the gold standard.
With the traditions of radicalism, it is very difficult to strengthen the confidence of economic entities and the entire population in money. Strengthening this trust is the main task of monetary policy in Russia.
Careful but firm measures are needed to gradually oust barter, offsets, money surrogates, and reduce the total amount of domestic debt. The settlement system in Russia has become some kind of option financial market, it brings large incomes, and not simple minimal commissions, as in a civilized society. All this must be eliminated. Curbing inflation and reducing interest rates in all sectors of the financial market is the most important condition for strengthening Russian money. Other measures at the macro level include an increase in the "monetization" indicator, the regulation of the ruble exchange rate and the fight against the "flight" of capital, the reduction of the dollarization of domestic turnover with the prospect of completely ousting the dollar from this sphere. All this is well known, but the situation improves very slowly, and sometimes worsens. This is the main problem: the diagnosis was made long ago, but the treatment is delayed. Monetary reform for this situation is not an appropriate method of recovery, talking about it only diverts attention from these issues.
With a favorable economic development in the near future, Russia could try to create a ruble zone from among the CIS countries, organize something like a payments union and give the ruble some functions of an international currency. This would serve as a means of strengthening the ruble in relations with countries with a developed market economy. But everything depends on the creation of a reliable money circulation within Russia itself. There are still chances for the ruble to increase in importance, but they will be realized only if real success is achieved in monetary policy in the next 2-3 years.
The Government of Russia at the meeting approved the main directions of the state monetary policy for 2008, developed by the Central Bank. According to the document, the strengthening of the real effective exchange rate of the ruble in 2008 may be about 3% if the base case is implemented. economic development country (i.e. with an average annual price of Urals oil of $53 per barrel and GDP growth at 6.1%).
net inflow foreign capital to the private sector in 2008 could be $30 billion, in 2009 - $35 billion and in 2010 - $45 billion.
The growth of gold and foreign exchange reserves will also slow down in 2008, depending on economic conditions can range from $48.3 to $71.3 billion, in 2009 - from $23.6 to $51.5 billion and in 2010 - from $14.4 to $25.5 billion.
The inflow of investments into fixed assets in 2008 will amount to 11.9%, the growth of real disposable money income of the population - 9.1%, the export of goods and services will grow to $343.8 billion, which will ensure a positive trade balance of $55 billion. Depending on economic conditions, the growth rate of the monetary base in 2008 may be 19-25%, in 2009 - 16-20% and in 2010 - 13-17%.
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