Macroeconomic instability: Economic Cycles, Unemployment, Inflation - Economic Theory (Vasilyeva E.V.). Economic instability: inflation and unemployment affect the conditions of economic instability to

The goal of the course work is to consider the essence, structure, species and forms of such economic phenomena as unemployment, inflation, economic cycle. An attempt to study the methodological foundations of regulating employment and inflation relations, and an analysis of employment problems, unemployment and inflation in the Russian Federation was carried out. That is, the problem of macroeconomic instability will be disclosed on the example of two manifestations: unemployment and inflation, because By most economists, these indicators are recognized as the most vivid form of manifestation of macroeconomic instability.

Introduction 3.
1. What is macroeconomic instability and how is it manifested? five
1.1. The essence of the concept of macroeconomic instability 5
1.2. The main forms of manifestation of macroeconomic instability 6
1.3 Economic Cycle: Basic Macroeconomic Indicators and 8
Potential GNP
2. Unemployment 12.
2.1. Essence of unemployment 12.
2.2. Species of unemployment 14.
2.3. Unemployment in Russia and the dynamics of its level 17
3. Inflation 20.
3.1 Causes of inflation 20
3.2. Measurement and indicators of inflation 24
3.3 Types of inflation 25
3.4. The mechanism of influence of inflation on the economy 27
3.5. Inflation in Russia 29
4. Interrelation of inflation and unemployment: general formulation of the problem 31
Conclusion 33.
References 36.

Work contains 1 file

AONO VPO "Institute of Management, Marketing and Finance"

COURSE WORK

under the discipline "Economic theory"

Topic 44: Macroeconomic instability and features of its manifestation in the Russian economy

Performed: student c.Ma-114. So-called Meshcheryakova

Leader: E.A. Svyathoduh

Evaluation:

Date:

Voronezh 2012.

Introduction 3.

1. What is macroeconomic instability and how is it manifested? five

1.1. The essence of the concept of macroeconomic instability 5

1.2. The main forms of manifestation of macroeconomic instability 6

1.3 Economic Cycle: Basic Macroeconomic Indicators and 8

Potential GNP

2. Unemployment 12.

2.1. Essence of unemployment 12.

2.2. Species of unemployment 14.

2.3. Unemployment in Russia and the dynamics of its level 17

3. Inflation 20.

3.1 Causes of inflation 20

3.2. Measurement and indicators of inflation 24

3.3 Types of inflation 25

3.4. The mechanism of influence of inflation on the economy 27

3.5. Inflation in Russia 29

4. Interrelation of inflation and unemployment: general formulation of the problem 31

Conclusion 33.

References 36.

Introduction

It is known that any society is developing unevenly. Each stage of development is peculiar to progress - prosperity or regression - crisis. IN economic Life Societies These concepts can be compared with the phenomenon of macroeconomic equilibrium or macroeconomic instability.

In an ideal economy, the real GNP would grow rapidly steady pace. In addition, the price level, measured using a price flaker or consumer price index, would remain unchanged or increased very slowly. As a result, unemployment and inflation would be insignificant. But experience clearly shows that complete employment and stable price level are not automatically achieved.

Our society is committed to economic growth, as well as to complete employment and sustainable price level, along with other, less permanent targets.

Unfortunately, for the Russian Federation, the manifestations of the forms of macroeconomic instability are characterized in very pronounced form. In addition, in Russia at present, many employment problems are carrying veiled, hidden character. Along with ensuring complete employment, maintaining price stability belongs to the number of the most important goals of the national economy. Inflation, as well as unemployment, has serious negative economic and social consequences.

Unemployment and inflation (as the main indicators of macroeconomic instability) existed, exist and will exist, since the economic system of any state cannot always function impeccable. There will always be a wage stiffness that prevents lowering the level of wages to the equilibrium point and thereby generating expectation unemployment, from time to time for states will be characterized by a violation of equilibrium between money and commodity coating, etc. Thus, it is obvious that the relevance of the research topic is dictated by theoretical and practical circumstances.

1. What is macroeconomic instability and how is it manifested?

1.1. Essence concept of macroeconomic instability.

To disclose the essence of the concept of "macroeconomic instability", in my opinion, it is necessary to have a clear idea of \u200b\u200bthe state of macroeconomic equilibrium.

Macroeconomic equilibrium means such a choice in the economy, which would suit all subjects economic activity. The optimal choice in the economy offers a balance of the method of using limited production resources and their distribution among members of society, that is, balance of production, consumption and use of resources, demand and supply, production factors and its results, material and material flows.

Ideal equilibrium will be the stable use of the economic potential of labor resources with the optimal realization of their interests in all structural elements of the national economy. The identification of disorders and deviations from the ideal model makes it possible to find ways and ways to eliminate them. In addition to the perfect and actual equilibrium, partial equilibrium distinguish between the equilibrium in the individual markets of goods, and the general, which is a single interconnected system of partial equilibrium.

Thus, from the foregoing, it can be concluded that the theory of general economic equilibrium explains the process of coordinating plans of economic entities in certain production capabilities and consumer preferences. This theory is static, since its goal is to determine the conditions that ensure equality of demand and supply at the same time in all markets.

To disclose the concept of "macroeconomic instability", it is necessary to familiarize themselves with the basic forms of its manifestation.

1.2. The main forms of manifestation of macroeconomic instability.

The main forms of manifestation of macroeconomic instability are:

Cyclicity of macroeconomic development, which is periodic instability in the trend of long-term economic growth;

Inflation that inhibits scientific and technical progress, disorientates the investment of capital, restrains investment processes;

The imperfection of the tax system, resulting in a reduction in total revenues;

Short-sighted activities of the state in social policy, unreasonable expansion of social programs;

Unemployment, as a result of which the income of the population is reduced, which, in turn, reduces savings, etc.

Consider the above forms of macroeconomic instability.

Cyclic of macroeconomic development.

In general, the crisis is a sharp reduction in production volumes, partial destruction of productive forces, overproduction of goods, bankruptcy of many enterprises, growth of unemployment, wage drop, a sharp cost of the loan and the fall in its volume.

As already mentioned, society develops unevenly, through decals and lifts. The oscillatory economic dynamics has been observed for 170 years. The first economic crises date back to 1821 in England and 1840 in Germany. Since then, they have repeated every 7-12 years. The crisis of 1873 was the first in the history of the cycles in the world economic crisis. The reasons for cyclicity are periodic depletion of autonomous investment, the weakening of the effect of animation, fluctuations in the amount of money supply, the update of the "main capital benefits", etc.

Inflation.

Inflation is an increase in the total price level. This, of course, does not mean that all prices are raised. Even in periods of fairly rapid growth of inflation, some prices may remain relatively stable, while others fall. One of the main patients of inflation is that prices tend to rise very unevenly. Some jump, others climb more moderately, and others do not rise at all.

Taxation.

The state cannot exist without taxes. Taxes are mandatory payments levied by the state from legal and individuals In order to meet social needs. The legislative totality of taxes, payments, the principles of their construction and the methods of charging forms the tax system.

Taxes are not only the main source of replenishment of state revenues, but also one of the main levers of the state's impact on the market economy. Therefore, the creation of an effective taxation system is one of the most important tasks of any country.

Unemployment.

Unemployment is a very common phenomenon not only in countries that have entered the path of market reforms, but also in many countries with a market economy, especially in Western Europe, where it is quite high and exceeds 10% of the working-age population.

The unemployment phenomenon in the country characterizes the degree of efficiency of employment of the population, since it indicates the presence of part of labor resources - those who are actively looking for the place of application of their abilities, but at a certain stage to no avail. Unemployment, as an official phenomenon, was recognized in the Russian Federation in 1991,after acceptance Federal Law No. 1032-1 of April 19, 1991 "On employment of the population in the Russian Federation", where the categories of citizens who are recognized as unemployed were identified.

Thus, it can be concluded that all of the above forms of manifestation of macroeconomic instability are very an important factoraffecting the economic climate of the state, therefore, each of these forms of manifestation of macroeconomic instability needs a more detailed description, study. But, based on the fact that inflation and unemployment are the most important forms of manifestation of macroeconomic instability (as it has already been mentioned), in the future only these forms of manifestation of macroeconomic instability will be investigated in more detail, but at first we will pay attention to such a concept as the cyclical development of the country's macroeconomics .

Economic instability and unemployment

Economic situation. As is known, the economy of any country is developing cyclical growth occurs not evenly, but is interrupted by periods of economic instability (growth of unemployment, inflation, the fall of the GNP, etc.). Specialists allocate four phases of the economic cycle of peak - in the economy there is full employment, and production works at full capacity, the price levels tends to increase, and the growth of business activity is terminated further follows the decline - production and employment are reduced, but prices are not amenable to lower prices. The recession point is characterized by the fact that production and employment, reaching the lowest level, begin to get out again from the bottom. Finally, the level of production increases on the phase of revitalization, and employment increases. Despite the common phases for all phases, separate economic

The neoclassical system was a logically connected and detailed developed theoretical concept, but economic instability (crises, unemployment) fits poorly. She was not able to explain the causes and

In each particular case, these problems will be solved in their own way. For example, in the Republic of Belarus, the labor market is characterized by the presence of a large number of ineffective jobs and their slow updating, insufficient investment in the creation of new jobs, which further aggravates the expansion of the demand and supply of labor in the labor market. Allow these problems can be possible only by coordinating the needs of the labor market in labor with the structure of workplaces in the economy and the training system of personnel. And this requires certain steps from the state to enhance innovative investment activities, creating favorable conditions for the development of small businesses and entrepreneurship, updating and improving the structure of jobs, creating new jobs by improving the development of the service sector. Sustainable development of small businesses contributes to the creation of new jobs, as well as reduces the dependence of the employment of the population from large economically unstable and non-prospective enterprises, reduces the risk of unemployment. The share of employed in the field of year is reduced from the year, and in the service sector increases. For

The relevance of employment and unemployment problems is explained by the fact that, first of all, ensuring full employment belongs to the number of the most important goals of the national economy, secondly, unemployment is a form of manifestation of the instability of economic development. Unemployment has negative economic and social consequences. The study of employment and unemployment problems contributes to identifying reasons for unemployment, developing effective employment policies. 84.

From the previous chapter, we learned about the aggregate demand and the cumulative proposal, they also got acquainted with the models of macroeconomic equilibrium. But macroeconomic equilibrium in practice is rather an amazing accident, an exception confirming the rule of the market economy is unstable. Economic history The last two centuries gives us a great many examples of this instability. During the periods of successful industrial development and universal economic prosperity, there were always periods of recession, accompanied by a drop in production and unemployment.

For the high performance of the market mechanism, in addition to a clear outline of the borders of state intervention in its operation, many other tasks must be solved. First of all, one should neutralize the effect of such destabilizing the economy of factors as inflation, monopolism and forced unemployment. Their occurrence is directly related to the functioning of the market, which himself, without the help of the state, is not able to lead with them. The activity of the state to strengthen the market mechanism is not limited to the struggle with the factors of economic instability. It should also consider the state stimulation of free enterprise, denationalization of property and privatization, the formation of optimal tax policies and much more, which is under government and without which the competitive market system cannot work normally.

In the fourth base section dedicated to the definition of release volumes (ch. 12-18), we return to the problem of economic fluctuations and the role of the state in economic stabilization. We will give a description of the Keynesian theory of determining the volume of production, especially allocation of an open economy. Here we will talk about a possible compromise between unemployment and inflation, as well as about the role in the formation of a macroeconomic situation and various shocks - in the emergence of instability in the economy.

In Russia, over the period of the reform course, the unemployment rate (taking into account the permanent employment and on vacations on the administration initiative) reached more than 20% of the active population. The critical, threshold value of the unemployment rate in international practice (with a normal system of social protection of the unemployed) is considered to be 10%. During the reform period, as the experience of a number of countries shows, its growth is possible to 15-20%, but for a period not more than 3-5 years. In the current situation in Russia, unemployment growth, which is a factor in the deepening of poverty and social instability in society, turns into one of the most significant threats to economic security and social stability. On the one hand, the narrowing of families with the growth of unemployment, causing degradation of consumption, can not not be a factor in the impoverishment of the population, but to be inhibition of economic growth. G of the other side, increasing the level of unemployment leads to an increase in crime and the number of suicides.

In a sense, the requirement for the government to balance the budget during the period equal to the calendar year is arbitrary. However, the alternation of the seasons and the firmly established practice of financial statements gives serious grounds for such a requirement, and the practice of business, in which receipts and expenses are regularly balanced with certain deviations, even more reinforce it. If large economic oscillations can be prevented using other measures, then such balancing is best produced throughout the year, traditional for the preparation of the term budgets. If we assume that the regulation of the money supply by competition between private currencies does not really provide not only the stability of the value of money, but also the stability of the economic situation, the argument about the need for a state deficit to reduce unemployment to be approved that government control over money is needed to heal the disease, which he himself caused. It is not clear why in general in conditions of stable money from the government should have the right to spend money more than it has. And, of course, more importantly, government expenses do not cause overall instability than to take a bulky government apparatus (if you make an unlikely assumption that it works on time) to counter any weakening of economic activity.

The thesis is also put forward about the allegedly voluntary nature of unemployment. However, if unemployment is of such a character, then why it fluctuates depending on the phase of the economic cycle of the workplace, employees are very picky and strive for the most profitable work. However, in this case, it is not clear why such workers can be 4-5%, then all 15% but the main question that supporters of the neoclassical approach cannot answer - why all employees are not available in the event of exceeding their supply over demand labor at a lower price

The growing gap between the demand for food and the possibilities of sustainable production in the world is accompanied by price instability and competitive struggle in the global market, can essentially destabilize the world economy as a whole. The situation may be aggravated by the interconnectedness of economic, environmental, social and political problems, which leads to an increase in unemployment, reduction of income of the population, malnutrition, increasing incidence and reduction in the quality of life of the population. For example, the annual fish in the world in the world is about 83 million tons. However, according to the Food and Agricultural Organization of the UN, about 70% of world fish stocks are exhausted as a result of their intensive exploitation, the recovery process is extremely slow.

The thesis is also put forward about the allegedly voluntary nature of unemployment. However, if unemployment is voluntary, then why it fluctuates depending on the phase of the economic cycle, the thesis on finding a workplace as a phenomenon causing the instability of the market is put forward. Its essence lies in the fact that employees are very legible and strive for the most profitable work. However, in this case, it is not clear why such workers are that 4-5%, then all 15% but the main question that cannot answer

For economic risk-proactivity, as well as security, not the indicators themselves are important, but their thresholds. The threshold values \u200b\u200bare the limit values, the non-compliance of which prevents the normal course of the development of various elements of reproduction, leads to the formation of negative destructive trends. As an example (with respect to the inner threats), it is possible to name the unemployment rate, income gap between the most and least secured groups of the population, inflation rates. The approach to their extremely permissible value indicates the increase in the threat of socio-economic stability of society, and the exceeding the limit, or threshold values \u200b\u200b- on the company's accession to the zone of instability and social conflicts, that is, about the real undermining of economic development. From the point of view of external threats, an extremely permissible level of public debt can act as indicators, the preservation or loss of position in the world market, the dependence of the national economy and its most important sectors (including the defense industry) from the import of foreign technicians, components, products or raw materials.

Indicator The number of registered crimes per 100,000 inhabitants. Why this indicator is important in a low standard of living and unemployment entail a low level of culture, a drop of morals and morality. In proportion to the drop in the standard of living, the crime rate is growing. The insufficiency of funding funds to the content of law enforcement agencies entails a reduction in the number of the composition of the patrol and inspection service, which in turn increases the risk of every resident of the city to become a victim of a crime. Crime growth is the result of many unresolved economic, political and social problems societies. The indicator of the number of crimes shows the level of social tensions and instability in the territory. It is used to assess the state and trends in the dynamics of crime in the region and, accordingly, the fight against crime and reduce criminalization in society. This indicator shows the number of all registered crimes per 100,000 people. The negative dynamics of the indicator characterizes the sustainable development of the region.

Let's start with the consideration of three well-known facts characterizing the growth of Latin American countries over the past 20 years. The fact is that the farms of many of these countries were solely dynamic, showing a high pace of industrial growth, but that this high growth rate was extremely unstable, systematically aggravated the inequality in income distribution. The best example gives Brazil, where the average annual growth rate of GNP in the period 1965-1980. amounted to 8.5%, but in 1980-1982. fell to minus 0.3%. The share of the income of the richest 20% of the country's population increased from 54% in 1960 to 62% in 1970 and 63% in 1980. The second fact is that, despite significant vertical mobility, the level of real salary of unqualified workers during long time was not able to significantly climb, and industrial growth even during the period of economic booms could not accept the excessive excess

Economic cycle and its phase

The first economic crisis in the market system took place in 1825 after education in all leading capitalist countries of national markets with full dominance of capitalist industrial relations. Since then every 8 - 12 years, crises are repeated with a large or smaller scale.

Modern scientists and classics of science explain in different ways the cyclic development of the economy. Some nature of economic cycles explain the factors lying outside the framework economic System. These are natural phenomena (for example, W. Jevons (1835-1882) and A. L. Chizhevsky (1897-1964) saw the cause of crises in regular spots in the sun, which affect crops of crops), political events, psychological assignment, war etc. After all, it is known that world and local wars, armed conflicts derive the economy of the warring parties from the state of equilibrium. Such scientists as V. Pareto (1848-1923) and A. Pig (1877-1959) were seen the cause of economic cycles in the ratio of pessimism and optimism in the economic activity of people.

Other economists The cause of macroeconomic instability offered to look for inside the economy itself. Among them, a special place was given to certain periods of renewal of fixed capital, regularities that determine the functioning of a monetary system, fluctuations in labor and wages, unpredictable behavior of stock markets and investment processes.

Cyclic - This is the frequency of recurring equilibrium disorders in the economic system leading to the coagulation of economic activities, the decline, crisis. The word "cycle" itself implies the return of the economic system to the same provision. therefore economic cycle - It is repeated after certain intervals of the state of the economy, characterized by the same macroeconomic parameters. The main phases of the economic cycle - climb and recession (crisis), during which there is a deviation from the average indicators of economic dynamics (Fig. 14.1).

Fig. 14.1. The main phases of the economic cycle.

Real GDP deviates from the nominal - these oscillations are fixed by the GDP deflator. The fluctuations in the actual volume of production around the potential GDP (the volume of production with complete employment) is characterized by an indicator:

where Y. - actual production volume; Y " - Potential production.

Full resource employment involves maintaining the share of unloaded capacity at a level of 10-20% of their total volume and the natural level of unemployment in the amount of 5.5-6.5% of the total labor force.

The economic cycle consists of the following phases: crisis, depression, revitalization, lifting (see Fig. 14.1). The most destructive phase of the economic cycle is a crisis. Entrepreneurs, as a rule, are not ready for the crisis, therefore the flow of this phase is oblivious. The balance is violated in the entire economy. The economy is in the lifting phase when it flourishes in all respects. The market at some point in time turns out to be overcrowded goods, but many enterprises continue to work, throwing out all new and new masses of goods to the market. Demand begins to gradually decrease, fall behind the proposal. Difficulties with sales lead to a reduction in production and an increase in unemployment. Reducing the purchasing power of the population even more complicates sales. All economic indicators are reduced. There is a drop in wage levels, profits, investments, prices, the mechanism of capital circulation is destroyed. There are a crisis of non-payment and a gigantic cash shortage. The securities course falls, they depreciate, the bill stops playing the role of the security. The period of mass bankruptcy of enterprises begins, as well as financial and credit institutions, since the irreversibility of loans is massive. In the conditions of a shortage of liquidity for paying for debts, banks increase the loan percentage and the loan becomes inaccessible to the main mass of entrepreneurs.

In this way, a crisis - This is a mechanism for the adaptation of the size of social production to the volume of solvent demand of economic entities.

The crisis follows the depression phase, which is a long time, sometimes the extensive time for time. Depression It is characterized by a stagnation of production, failure outdated fixed capital (primarily machine and equipment), which is an important prerequisite for the reduction in production costs in order to adapt to the established low level of prices. Low prices contribute to the implementation of accumulated inventories. Weak economic activity determines unemployment.

Demand cash capital, as well as the level of interest rates and cost valuable papers Fall. The specificity of the motion of interest rates and the cost of securities is that, despite the drop in interest rates, the course of securities is not growing. This is explained by the work of production, which does not provide dividends.

The economic development dialectic is that the crisis factors become in the phase of depression by the factors of the transition of the economy into the third phase - revival. Low prices stimulate consumption and demand.

Phase of revitalization It is primarily characterized by the activation of economic activities, a partial update of fixed capital, an increase in production volumes, increasing interest rates. Prices and profits of enterprises are beginning to grow, promotion courses and other securities.

For revival it is necessary phase lifting. The criterion for the transition of the economy from revitalizing to the rise is the achievement of a pre-crisis level of production. The rise is determined by the continuation of economic growth started at the preceding phase, the achievement of relatively employment, the expansion of production facilities, their modernization, the creation of new enterprises. Interest rates continue to rise under the influence of investment growth. Despite the increase in the level of interest rates, an increase in the course of securities is also occurring, as the growth of enterprises' profitability is positive.

The lifting phase after a while reaches its peak when the economy turns out to be "overheated," the gap between the production and the effective supply of the population begins to grow, which is inevitably rolled into a new crisis.

Forms of unemployment and its natural level

The combination of friction and structural unemployment forms natural unemployment rate (or unemployment rate at full employment) corresponding to potential GDP.

The main reasons for the existence of the natural level of unemployment:

developed unemployment insurance system. Payments benefits significantly reduce incentives for rapid employment and increase the time that the unemployed spend in search of a new job place;
salary stiffness, which generates forced unemployment.

We already know that in the labor market, the balance between supply and supply of labor is established under certain conditions (Fig. 14.2).

Fig. 14.2. Salary stiffness and forced unemployment.

Forced unemployment arises in cases where the level of real wages exceeds its equilibrium value. The inflexibility of wages leads to the occurrence of relative lack of jobs. Many workers become unemployed because this level wages offer labor L2. surpasses demand L1. on him. In such a frozen nonequilibrium, the labor market may be quite a long time, which is determined by:

first, the legislative establishment of a payroll minimum that limits its free oscillations. The limiting impact of the payroll minimum turns out to be all the more significant, the higher the share of youth, women, persons of poor labor in the workforce, since for these categories of the equilibrium payroll rate below the legislative minimum;
secondly, fixing the level of wages in collective agreements with trade unions and in individual labor agreements;
thirdly, the disinterest of firms in reducing the level of wages due to the risk of losing the qualified labor force, an increase in total fluidity of personnel, a decrease in labor productivity, labor discipline and profits.

The unemployment rate is varied in different demographic groups. For example, the unemployment rate among young people is significantly higher than in other age groups. The trend of increasing the natural level of unemployment in the long term is associated with:

an increase in the share of young people in the workforce;
an increase in the share of women in the workforce;
more frequent structural shifts in the economy.

Cyclic unemployment caused by a decline in production. It affects all spheres and sectors of the economy. Unemployment caused by a decline in production may exist in hidden and open forms. Hidden form Indicates a reduction in the working day or a week, the direction of personnel in forced leave and, accordingly, a decrease in wages. Open form Means the dismissal of the employee, the full loss of work and, accordingly, income.

Cyclic unemployment, except social disasters, also brings obvious losses in the amount of real GDP. The country loses from 2 to 3% of actual GDP with respect to potential GDP, when the actual unemployment rate increases by 1% compared with its natural level. In economic literature, this law is known as

where Y. - actual GDP; Y " - potential GDP; and - actual unemployment rate; and" - Natural unemployment rate; ? - Empirical GDP sensitivity coefficient to changes in cyclic unemployment (Oaken coefficient).

If the actual unemployment rate has not changed in relation to the previous year's indicator, then the growth rate of real GDP is 3% per year. This rate is due to the increase in population, capital accumulation and scientific and technical progress.

Inflation

Inflation - This is a reduction in the purchasing power of money primarily due to the rapid increase in prices. There are two main types of inflation: hidden and open. Based on both types, there is a violation of equilibrium between the value of the entire mass of goods and services and the monetary mass opposing it.

Hidden Inflation is manifested through a commodity deficit and, as a rule, takes place in a non-market economy. Open Inflation is manifested mainly through the rise in prices for goods and services. Paper money depreciates, an excessive money supply arises, not secured by the corresponding number of goods and services. At the same time, any price increase is impossible to consider as inflation. Increase prices may be non-inflationary and occur under the influence of other reasons. The basis of the open inflation mechanism is adaptive inflationary expectations, cost inflation and demand inflation.

Adaptive inflation expectations represent a psychological phenomenon, a tendency, the image of thoughts that determine the behavior of business entities.

Adaptive expectations are formed by economic agents based on information about the present and previous levels of inflation, and more importance is attached to recent experience.

It arises as a consequence of an increase in average costs per unit of products and reducing the aggregate offer. This type of inflation leads to stagnation, i.e., to the simultaneous growth of inflation and unemployment against the background of the decline in production (Fig. 14.3). With the previous level of aggregate demand, the decline in the total supply leads to an increase in the average price level and an increase in inflation rate.

Fig. 14.3. Inflation costs.

Causes of increasing average production costs:

an increase in the nominal wage, which is not equalized by an increase in labor productivity;
increase prices for raw materials;
increase taxes.

Cost inflation to a certain extent self-restrained: recession of production restrains the additional growth of production costs, since at the increasing level of unemployment, the nominal wages gradually decreases.

It occurs when the demand for goods and services cannot be satisfied as a result of their proposal not only at all, but also at the level of industries. In the general terms, demand inflation means a violation of equilibrium between the cumulative demand and the cumulative proposal from demand (Fig. 14.4).

Fig. 14.4. Inflation demand.

Shift of the curve of the aggregate demand to the right from AD1 to AD2. He leads to price increases if the economy is on an intermediate or classic segment of the cumulative supply curve. The main reasons for the excess of total demand may be associated with an increase:

government spending, with which the distribution of income (salary) or investment (state order) is funded;
private expenses for consumption as a result of the use of savings;
private expenses for investment, which are funded at the expense of a bank loan;
revenues caused by a positive balance of balance of payments.

The combination of inflation of demand and inflation costs form an inflationary helix, in which the increased inflationary expectations of economic agents perform the role of the transfer mechanism. In macroeconomic models, the inflation rate is represented as:

where P1 is the average price level in the current year; P0. - Middle price level last year.

The average price level is measured by price indexes. Depending on the growth rates of inflation indicators, the following types are distinguished:

creeping inflation - price growth rate - up to 10% per year;
galoping inflation - growth rates up to 300-500% per year;
hyperinflation - growth rates of more than 50% per month. In annual terms - more than 10,000%.

There are other criteria in accordance with which the types of inflation are distinguished: balance and expected. For balanced Inflation prices of various products are unchanged relative to each other, and with unbalanced - constantly change relative to each other, and in different proportions. Under expected Inflation is understood to inflation, which is predicted and projected in advance. Unexpected Inflation is characterized by a sudden price jump.

The combination of balanced and expected inflation does not cause economic damage, as economic entities know that prices will increase next year. It is much worse when unbalanced and unexpected inflation combines. An example is the events that followed after the liberalization of prices in our country in 1992

An increase in employment and reducing unemployment is accompanied by an increase in demand inflation, and vice versa. This means that in the short term between inflation and unemployment levels, the inverse dependence is found, called curve Phillips. (Fig. 14.5).

Fig. 14.5. Phillips curve.

This dependence is derived from the following reasoning. The wage level is determined by the labor market position. When unemployment is low, employers are difficult to find additional workers to expand production. They are forced to hire less qualified workers for the same wages or pay overtime hours on higher rates. In the conditions of mass unemployment, on the contrary, the firms can relatively easily find workers who agree to work for lower wages.

The Equation of the Short-term curve of the Phillips has the following form:

where π and π e are the actual and expected inflation rate; u. and u " - the actual and natural levels of unemployment, respectively; γ - external price shock; ε is an empirical coefficient.

1. Under cyclicality means the frequency of repeating equilibrium disorders in the economic system leading to the coagulation of economic activities, the decline, crisis. The main phases of the economic cycle are the rise and crisis, during which the deviation from the average indicators of economic dynamics.

2. One of the characteristic manifestations of macroeconomic instability is considered to be the existence of unemployed - people who have reached a certain age adopted in national legislation as the lower border of working age, which were not working in the period under review, they were engaged in searching with the help of employment services or independently and were ready to start To work immediately or during the period.

The unemployment rate is calculated as the ratio of the number of unemployed to the number of labor persons, and is expressed as a percentage. The main types of unemployment: friction, structural and cyclic. The combination of friction and structural unemployment forms a natural unemployment rate.

3. Inflation is a decrease in the purchasing power of money, primarily due to the rapid increase in prices. Inflation may exist in a hidden form (manifests itself in the form of a commodity deficit) and in an open form (price increases for goods and services). The basis of the open inflation mechanism is adaptive inflationary expectations, cost inflation and demand inflation.

Depending on the growth rates of inflation indicators, the following types are distinguished: Crying inflation; Galoping inflation; Hyperinflation. Also distinguish between balanced and unbalanced, expected and unexpected inflation.

One of the defining factors in modern world It becomes instability. The traditional raw materials markets change, the amplitude of fluctuations in currency systems reaches dangerous limits, the losses from unemployment becomes more and more significant.

Paul Samuelson

Cyclic development of the economy. Types of cycles. Cycle phases and dynamics of economic indicators. Structural crises.

Purchasing power of money. Essence of inflation. Causes and basic forms of inflation: moderate, galloping and hyperinflation; Open and depressed inflation. The concept of inflation expectations. Inflation demand and inflation costs. Stagflation. Measuring the inflation rate using the price index.

Economic and social consequences of inflation. Adaptation and anti-inflation policy.

Unemployment, its essence and causes. The main types of unemployment: friction, structural, cyclic, their distinctive features and methods of partial overcoming.

The problem of complete employment. The concept of "natural norm" unemployment. Norm of unemployment and excess unemployment. Employment indicators. Productive employment.

Socio-economic losses from unemployment. The essence of the OUCEN law. Directions and types of state regulation of the labor market.

Relationship of unemployment and inflation. The essence of the Phillips curve and the boundaries of its practical application.

From the previous topic, you already know that economic growth is not identical to economic development. On the path of growth of the national product, there are periods of sharp acceleration, accompanied by raising prices and inflation, and periodides of the decline in production and employment, when economic growth slows down or even stops. These disorders of macroeconomic equilibrium are considered economic science as manifestations. instability of the economy.

As practice shows, this uneven development of market economy is characterized by rhythm: acceleration and slowdown in economic growth alternate in some rhythm, forming economic cycle.

The economic cycle is fluctuations in macroeconomics consisting of alternating recession and lifts of general business activity.

The tendency of the market economy to repetition of economic phenomena was seen by economists in the first half of the XIX century. They drew attention to the frequency of such phenomena as an increase or decrease in demand, an increase in production or its stagnation.

A certain sequence in alternating these phenomena has emerged. The problem had so much importance for economic development that she did not bypass by almost any of the leading economists. Recognizing the objective nature of the economic cycle, economists propose to study this phenomenon through the analysis of internal and external factors affecting the nature and duration of the cycle.

TO external factors Cycles researchers include such non-economic phenomena as fluctuations in solar activity, war, revolution, earthquake, population migration. The impact on the cycle can render the opening of large mineral deposits, scientific and technical discoveries and innovations.

Such large innovations, like railways, aviation, cars, computers, have a great impact on consumer spending and investment. But such global innovations appear very irregularly and therefore cause economic instability. Some economists see the reason for fluctuations in the economy in the ratio of optimism and pessimism of the participants of the business life, i.e., psychological factors of the cyclicity of the economy are distinguished.

Theories explaining the economic cycle of external factors by calling exterpex Unlike international Theories considering cyclicity as a generation of factors inherent in the economy itself. The main inner inherent inherent economic system, the cause of vibrations of business activity, most economists call the dynamics of the ratio of aggregate demand and the aggregate supply.

If a boom began in some industries, which caused a sharp increase in demand for cars and equipment, it is quite natural to assume that the phenomenon will repeat after 10-15 years, when these machines and equipment will be completely worn out. In addition to physical wear of fixed capital, there are other reasons generating an economic cycle. Among them are distinguished:

- personal consumption, reduction or increasing of which affects production and employment;
- investment, i.e., investment in the expansion of production, its upgrades;
- Economic policies of the state, expressing in direct or indirect impact on production, demand and consumption.

Modern economic theory dismisses external factors the role of long-wave pulse generator, whereas internal reasons are considered as converters of these pulses to fluctuations in large cycles.

The general "pulse" of the economic cycle covers all aspects of the development of the economy: the level of production, employment, income and prices, campaigns, sales, sales, construction of various objects, etc. Since economic processes affect such non-economic phenomena, such as fertility, human health, marriages, as well as political events, it can be concluded that the economic cycle penetration into all spheres of the nation's life.

No cycle is similar to another intensity and duration of oscillations of the main macroeconomic indicators: GNP, employment and price level. But there are a number of characteristics that are in one way or another inherent in any cycle. First of all, this is the passage of the economy during the cycle of sequentially four phases - crisis, depression, revival and rise.

The crisis (recession, decline) is the phase of the economic cycle, during which the real GNP is reduced during two or more quarters.

Let's try to present the overall picture of the crisis as the deep shocks of the entire economic system from top to bottom.

The market that absorbed unhindered all produced goods, at some time turns out to be crowded, the goods continue to act, and the demand is gradually decreasing and finally stopped at all. Anxiety extends throughout the market. The demand disappeared, and the commodity reserves are huge, and many enterprises continue to work at full capacity due to inertia. It follows a rapid drop in prices.

Truly, the heroic efforts are made to save the situation, but all means are fruitless. The liquidation of enterprises and collapse begin. First of all, banks and credit institutions are dying. The trust of market participants to each other is undermined.

All require paying cash. A bill of exchange, who did not cause doubts yesterday, become simple paper. The loan percentage increases. Crowds unemployed appear on the streets. Begins hunger, suicide. In such a dramatic scenario, the crises of the last century were held.

The most ambitious attempt to overcome the crisis with the help of state events of the ball was undertaken by the United States during the Great Depression. Essence of her you know from previous lectures. At the same time, despite certain results, industrial crises continued.

In the context of the crisis, only enterprises with large financial capabilities continue to make a profit by reducing costs. Middle and small enterprises have no such opportunity and suffer bankruptcy. Their ruin has its advantages for industry as a whole, as it increases the overall level of labor productivity. This lowers the cost of goods and in the end - weakening the fall of the profit rate. It turns out that the crisis discovers not only the limit, but also the impulse in the development of the economy, gives rise to mainly intensive development, performing a stimulating function.

But the transition to the expansion of production cannot occur at one point. Therefore, the crisis comes to replace phase depression.

Depression is the phase of the cycle, coming after the crisis, when the recession continues significantly longer than two quarters.

The level of production is maintained stable, but very low with respect to the beginning of the crisis. A high level of unemployment remains. But the fall in prices is suspended, inventory stabilizes.

The revival - the phase of the economic cycle, during which the real GNP increases and employs employment.

The revival is accompanied by a minor increase in production level, some reduction in unemployment. Prices are gradually rising, and a loan interest begins to grow. The commodity market is growing demand for new industrial equipment. An emerging recovery covers an increasing amount of industries. At the end of the revitalization phase, the update incentives exhaust themselves, and extensive development on the lifting phase begins again.

The rise is the highest phase of the cycle, when the level of production exceeds the achieved in the previous cycle.

Lifting often acquires a rush character. Prices are feverishly growing. Unemployment is reduced to minimal sizes while simultaneously significant wage growth. The demand for products that determine trends in scientific and technological progress increases sharply, and prices are growing for it. The economy is suitable for the next turn.

A new cycle begins, but already with other characteristics, duration and depth. Even from this largely surface picture, it can be seen that each of the phases of the cycle has the ability to reproduce the subsequent phase. As a result, the economic cycle as a whole acquires the property of reproducing a new cycle.

What is the duration of the cycle? Let us turn to the experience of a highly developed US economy. The economic system of this country between 1854 and 1986. Passed through 30 business cycles of various intensity and duration. Stroks of view of duration distinguish the following types of cycles.

Large (classic) economic cycles cover the period of 7-11 years. Inside a large cycle, two or three small, or "commodity" cycles of 3-5 years, which are generated by the dynamics of the amount of stock-and material values \u200b\u200bin enterprises. Two large cycles are approximately characterized by cycles time associated with fluctuations in investment activity in the construction industry. it building cycles. If we consider economic growth from a historical point of view, then from the beginning of the XIX century. We can detect very long cycles with a duration of 50-60 years, the existence of which revealed in the 20s of the XX century. Russian economist N.D. Kondratyev.

Processing with the help of special mathematical methods data on the dynamics of the most important economic indicators of England, Germany, France and the USA, Condratyev discovered curious patterns. Countries with market economies in their development regularly pass through the raising and recession stages, which are repeated in 50-60 years. These cycles and today are called "Condratyeva waves". They are associated with a fundamental update of equipment that have a particularly long service life (railways, bridges, canals, dams).

The fate of Nikolai Kondratyev is very tragic. His views contradicted the theory of the "party approach to economic planning". In 1930, he was arrested on a false accusation and convicted for 8 years. At the end of 1936, Kondratyev was seriously ill and began to blind. However, in 1938, he was re-convicted on the same contrived business and shot. He was only 46 years old.

The modern picture of the market economy began not to coincide with the traditional scheme. So, for example, the industrial cyclic crisis of the mid-70s. It was exacerbated by the oil crisis, but only in oil-consuming countries. The same countries that had their own sources of energy resources were not only not affected by two crises, but even had a tendency to some development.

On the other hand, the expected rapid development of the industry in the lifting phase in many countries does not occur as a result of a sharp exacerbation of the situation caused by the environmental crisis. Oil, food, energy, raw materials crises are complemented in recent decades of currency system crises. These are the so-called structural crises.

Structural crises are generated by imbalances between the development of individual spheres and industries, they are usually a protracted character and do not always coincide with the beginning of cyclic crises

Thus, the reason for the cyclical nature of the development of the economy lies in the conflict of the conditions of production and the conditions of implementation, in contradiction between production, seeking expansion, and not having to have an increase in solvent demand. The material basis of the periodicity of crises is the update of fixed capital.

There is another approach to explaining the causes of crises in a market economy. According to this approach, the abstract possibility of crises is related to the money function as a means of circulation: the mismatch of the purchase and sale in place and time can create prerequisites for the breaking of many links in the sales and shopping chains; And as a payment tools: any entrepreneur cannot have guarantees that by the time of payment, the buyer of its products will be solvent, and then this rupture obligations will cause a chain reaction.

Since there are different views on the causes of cyclic oscillations, there are also various approaches to the problem of their regulation. But there is a general understanding of the fact that, firstly, the state is able to smooth out cyclic oscillations, and secondly, the state should be carried out in order to achieve economic stability.

There is a general understanding of what should be in general, the state of the behavior of the state aimed at overcoming cyclic oscillations. This is already known to you from 3.1. "The policy of expansion and deterrence policy."

In phase decline All events of the state should be aimed at stimulating business activity. In the field of tax policies, this means a decline in tax rates, providing tax benefits for new investments. In the field of monetary policy, this reduction in interest rates for issued loans, an increase in bank loan resources, i.e. Revival of economic life with additional loans.

In the lifting period The economic situation of the state in order to prevent overheating of the economy and related painful phenomena conducts a deterrence policy that includes opposite fiscal and monetary policy activities.

That is, in order to smooth cyclic oscillations, the state should carry out a counteraction policy: the activities should go in the direction opposite to the existing fluctuations in the economic situation.

Of course, these are only general landmarks of anticyclic politics. We will talk about the methods of state regulation of the economy in more detail in the next paragraph.

An integral element of the modern economic cycle has become inflation. This is another manifestation of macroeconomic instability.

Inflation (from lat. inflatino. - Swimming) - this is the process of increasing the overall level of prices for goods and services, in which the purchasing power of the monetary unit falls.

Money purchasing power - This is the number of goods and services that can be purchased at a given price level on this monetary unit.

At first, the cause of inflation was considered a ubiquitous transition to paper money, because they can be printed in any quantity. A certain reason in this statement was, and when mad inflation was played in Germany after the First World War (prices for three years rose three times a trillion times!), Then the fault for it was largely on Central Bank countries.

However, even after the emission of money was taken under strict control of parliaments, inflation did not disappear. And then the economic science took up the deeper studies and found that the inflation of the raspberry, it has several reasons, many forms of manifestation and, accordingly, should be different methods Fighting her.

Please note that not any price increase serves as an inflation rate. Prices may increase due to improving product quality, deterioration of fuel and commodity mining conditions, and social needs change. But it will not be an inflation price increase, but to a certain extent a logical, justified price increase for individual goods.

For example, the transition to the release of new vehicles with an economical diesel engine, corresponding to international standards, will obviously lead to an increase selling price: More advanced and high-quality products require high costs and appreciated above.

But if a systematic increase in prices for serially produced cars of the same model without any improvements, and often with a deterioration of characteristics, it is brightly pronounced inflationary character.

P. Heyne: "We should not forget: prices are changed not only by goods, but also the meters of their value, i.e. money. Inflation is not an increase in the size of the items, but a decrease in the length of the line we use. "

Inflation is an extremely complex, controversial, not well-studied process.

First of all, inflation differ in pace as 1) moderate or twisted (usually not more than 10% per year); 2) galoping

(from 20 to 200% per year); 3) hyperinflation (more than 50% per month for three quarters).

Moderate inflation Economic theory considers as a good for economic development, and the state as a subject of effective economic policy. It allows you to adjust prices in relation to changing demand conditions.

Galoping inflation is an already difficult managed process, a serious stress for the economy, although most transactions and contracts take into account such a rates of price growth.

Hyperinflation is the greatest danger, making tremendous damage to the population, even the wealthy layers of society, trade turns into Barter, the national economy is destroyed.

Guinness Book of Records: The most powerful inflation in the world occurred

in Hungary in June 1946, when the golden penger of 1931 was worth

130 trillion, paper pennies. On June 3, 1946, banknotes were issued for the amount of "Egimilliard Billion".

In the forms of manifestation distinguish open and depressed inflation. Open inflation is manifested in price increases. Depressed inflation inherent in the economy with administrative control over prices and incomes: externally prices are stable, and excess money is transformed into a commodity deficit, there are permanent embitting queues and "black market", which to some extent reflects real prices.

Inflation can be balanced, When the price increase is moderate and simultaneous to most of the goods and services, and unbalanced When the rise in prices has different rates in different product groups.

In the nature of expectations, economists distinguish expected inflation and unexpected. Expected inflation can be predicted: take into account its pace in collective agreements, production factors, the government can change taxes and transfers in a timely manner, then the impact of inflation to the economy as a whole will be insignificant.

Another thing is unexpected inflation. It is characterized by a sudden surge of prices, which is extremely negatively affecting the monetary circulation and taxation system.

In such a situation, if inflationary expectations already existed in the economy, the population increases the costs of purchasing goods, which in itself creates difficulties in the economy, distorts the real picture of society needs and leads to disorder of economic relations. Thus, a sudden price jump can provoke further inflationary expectations and form inflation psychology - The thing although subjective, but quite real and extremely dangerous, since it generates a vicious circle of self-stage inflation.

From the point of view, the reasons are distinguished inflation of demand and inflation costs.

The demand inflation occurs when the total demand is more cumulative supply (too much money "chases" for fewer goods, as the expenses of the state, the population and firms are growing faster than production).

Causes of inflation of demand:

1) expansion of state orders (military and social);
2) an increase in demand for the means of production in full loading of production capacity;
3) the growth of purchasing power of the population (wages) as a result of agreed actions of trade unions.

The cost inflation occurs when prices are growing due to an increase in production costs.

Causes of cost inflation:

1) oligopolistic pricing practice;
2) financial Policy states;
3) Rising prices for raw materials;
4) trade union actions requiring wages.

The risk of inflation costs for society is associated with the so-called inflationary spiral: The overall increase in prices leads to a decrease in real incomes of the population, hence the wage raising requirements and public policy Indexing income. This, in turn, increases the costs, which leads to a new price rope.

In practice, it is not easy to distinguish one type of inflation from the other, they closely interact, therefore the growth of salary, for example, may look like both inflation of demand and as cost inflation.

Starting from the second half of the XX century, prices in all developed countries grew constantly, and from the 70s. - Even during periods of economic recession, when the underload of production reached significant sizes. Such a phenomenon as you remember got a name staging.

Stagflation - inflation in combination with stagnation (stagnation, depression) of production and high unemployment.

Quantitative assessment of inflationary processes is carried out using inflation indicators. The inflation rate is measured using price index.

Price index - relative indicatorcharacterizing the price value ratio. To calculate the price index, the baseline prices are usually taken for 100, and the prices of subsequent years are recalculated in relation to the base year.

Temp inflation For the current year is defined as follows. The current year price index is deducted from the price index of the past year and is divided into the price index of the last year, and then multiplied by 100%.

In a market economy, inflation has become a practically an integral attribute of economic life. This allows you to discuss not just about the consequences, but on some specific functions of inflation.

We have already considered a point of view, according to which the inflation is minor in size (let's say, the annual increase in prices by 3-4%), accompanied by the corresponding increase in the money supply, is able to stimulate production. But what would be supposedly "positive" inflation functions, leaving due to control and even remaining relatively weak, regulated, it has a whole complex of purely negative, negative influences on economic development. We note briefly some of them.

First, inflation affects the effectiveness at the microeconomic level. The higher the inflation, the stronger the relative prices are violated, the weaker the costs with costs. Remember how in Russia until the end of 1993, bread fed their cattle, since prices for it were significantly lower than the costs that turned into an inefficient distribution of limited resources of society.

Secondly, inflation makes it difficult to carry out macroeconomic policies due to the imbalances between the sectors of the economy, the fall in production and the reduction of incentives for labor.

Thirdly, inflation raises flight from money to the goods, turning this process into avalanche-like, exacerbates the trade hunger, revives Barter.

Fourth, with high inflation, huge losses are carrying owners of production factors, because in the short term the price factors are fixed, and the prices for final goods and services grow very quickly. As a result, there is a sharp decline in the real incomes of production factors owners.

Fifth, inflation negatively affects the fiscal system due to the effect of Tanza Oliver (Latin American economists, who first focus on him). Its essence is that inflation devalues \u200b\u200breceipts from taxation, which are accrued, for example, in the third quarter, and are paid in the fourth quarter of the year, when their real importance has already fallen.

Sixth, inflation is devastable for accumulated wealth, especially in the most liquid forms. This also applies to population savings, both banks and credit institutions.

On-seventh, the most important social consequence of inflation is redistribution national income, Reducing the living standards of the population, since the nominal and real wages lags behind sharply increasing prices, even subject to income indexing.

In eighth, the internationalization of production facilitates the transfer of inflation from the country to the country, complicating international currency and credit relations.

Speaking about the redistribution of income, it must be borne in mind that although losses from inflation carries all society, it happens to unequal. During inflation, it is beneficial to live in debt. Therefore, lenders lose significantly in more thanthan debtors. The biggest win of inflation receives the government, because it is the largest debtor in the country, and inflation devotes debts.

Less losing and those who can dramatically increase their income. And pensioners, disabled citizens and employees of the budget sector do not have such an opportunity, so they carry the basic burden of inflation on their shoulders.

There is here and the age moment. Among those receiving loans, the absolute majority are those who are less than 45 years old, so it turns out that, through the use of loans, they actually redistribute the state in their favor, which in the pre-confidence period has accumulated the older generation.

Negative social I. economic consequences Inflation forcing governments different countries Conduct a certain economic policy in this area.

There are two approaches to the management of the economy in the conditions of inflation: the first is to develop adaptation policies, i.e. Adaptation to inflation, the second - in an attempt to eliminate inflation by anti-inflationary measures.

Adaptation policy It is built on the fact that all subjects of the market economy in their actions take into account inflation, first of all, through the accounting of losses from reducing the purchasing power of money.

Adaptation measures include: Indexing the interest rate on the size of the inflationary premium; introduction into labor agreements of inflationary adjustment of wages; Perestroika family budget towards the most inelastic goods and services, fast materialization of money; Increasing the share of borrowed funds against their own through the issue of shares, leasing, factoring.

Anti-inflation policy It comes from the fact that the modern market economy is inflationary in nature, since it is impossible to eliminate all inflation factors (budget deficit, monopolies, disproportions in the national economy, inflation expectations, transfers inflation in foreign economic channels, etc.) Therefore, the purpose of the anti-inflation policy is to make Inflation moderate, controlled, prevent destructive scale.

For this, the following measures are applied:

1) reducing the budget deficit by increasing taxes and reduce state expenditures;
2) the establishment of rigid limits on the annual increase in money supply, which allows you to control the level of inflation;
3) a change in the inflationary psychology of the population through the stimulation of production, price liberalization, the weakening of administrative customs control, etc.;
4) Reducing the inflationary impact on the economy of overflows foreign capital in the form of short-term government loans abroad to finance budget deficit;
5) gradualism - policies aimed at a slow decline in inflation for a long time due to the management of cumulative demand and without prejudice to employment;
6) privatization of part of state ownership in order to increase revenues to the budget.

Among the most painful consequences of the decline in the economy (depression) belongs unemployment.

Unemployment is surplus the workforce caused by the exceedment of the supply of labor over demand for it.

Reasons for unemployment:

1) structural shifts in the economy manifested in the fact that the introduction of new technologies leads to the release of labor (structural unemployment);
2) the economic downturn, which forces employers to reduce the demand for all resources, including labor (cyclic unemployment);
3) government policies and trade unions in the field of wages: raising minimum size wages increase production costs and thereby reduces labor demand;
4) seasonal changes in production level in certain sectors of the economy (seasonal unemployment);
5) changes in the demographic structure of the population, in particular the growth of the population in working age;
6) the existence of lumpen layers in the society, which do not have and are not looking for work, at least in the field of legal economy (stagnant unemployment).

It should be clarified that the unemployed categories include only those who are looking for a job or waiting for a return to work. After all, the "unemployed" and "non-working" - concepts are not identical. A person may not work for various reasons: some learn and do not work yet, others on pensions are no longer working, others simply do not want to work.

In the United States, for example, only those citizens who do not have work are considered officially unemployed, they are immediately ready to work, the last 4 weeks have been actively looking for work, wait for the start of work (already invited) within 30 days.

Depending on the reasons, the following types of unemployment distinguish.

Friction unemployment (from English. Friction. - friction, disagreement) is unemployment caused by constant and necessary changes in the placement of the Company's resources between the types and spheres of the production of goods and services.

It arises either due to the fact that the employers do not have full information about the availability of their categories of workers, or workers do not know about the availability of jobs. Friction unemployment covers those in the position "between the works" (voluntary or forced change of work, residence; temporary unemployment of women associated with the birth of a child; job search by returned from service in the army, etc.).

In such a situation, there is always a certain part of people, so this kind of unemployment exists constantly. It is believed that friction unemployment is a fee of society for an efficient economy. Everything that improves the workplace information and the availability of employees or reduces the time of job search, leads to a decrease in frictional unemployment.

Structural unemployment caused by changes in the structure of the national economy - the death of some professions and even whole industries, the emergence of new, restructuring of the economy of regions, changes in technology.

From frictional structural unemployment is distinguished by the fact that in frictional unemployment, the employee retains sufficient qualifications to change the industry or production. Really lost work due to structural shifts face the need to complete or significant retraining. Now Russia has faced a structural restructuring that has no analogues in world history.

We are talking about the elimination of millions of jobs, the existence of which has not responded to the needs of the country. In a significant part of its part, those who occupied these places (especially millions of managers) do not have chances to find work without radical retractions.

American experts in the late 1990s developed a forecast for the development of the labor market in the United States for the next 5-10 years and discovered the inevitability of serious change on it. It turned out that the share of employed in industry will fall from 18 to 9.7%, 43% of employees will work in the field of computer science.

Special demand will be placed on people who own the following specialties: an accountant auditor, a specialist in re-education of offenders, a medical sister, a specialist in public relations, a programmer, therapist on professional diseases, technician for the maintenance of medical equipment. The state and needs of the new century labor market as a whole, confirm this forecast.

Structural unemployment is caused by objective reasons, so always inevitable and exists in society, but it can reduce the creation of the state and private firms of the network of reproduction centers.

Cyclic unemployment arises as a result of cyclic decays of production, causing a decrease in total demand for all factors of production, including labor.

This is the most unpleasant kind of unemployment - often massive and painful. The cyclicality of economic growth is insurmountable, therefore it is not possible to eliminate this type of unemployment, but the anti-crisis measures can smooth out the economic downturn and, accordingly, reduce the number of cyclic unemployed.

However, it suggests that the full employment of labor resources does not mean the complete absence of unemployment.

In a dynamic economy, some part of workers in many reasons are inevitably and is always outside jobs. Therefore, the question arises: what number of unemployed can be considered permissible if the labor market works efficiently, and the economy does not survive the decline? Nobody will give an absolutely accurate answer to this question, but the overall understanding of what complete employment is still in economists.

Full-time - The level of employment, developing in the country in the presence of only structural and friction unemployment.

If the number of unemployed exceeds the average levels of friction and structural forms of unemployment in a given country, this is most likely due to the appearance of cyclic unemployment, i.e., with a decline in the economy. In the US, for example, experts believe that full-time employment is achieved if 94-95% of able-bodied citizens have work.

Thus, the concept of complete employment proceeds from the idea of \u200b\u200bthe existence of the natural norm of unemployment. - This is the state of the labor market, in which there is an approximate balance between the number of free jobs and the number of qualified workers looking for work.

If the unemployment rate of unemployment in the country is higher than natural, it means that we have encountered excess unemployment - The phenomenon is undesirable and even dangerous in social and political terms.

Norm unemployment - This is a share (as a percentage) in the total number of economically active population of those people who are unemployed.

Full-time, natural unemployment rate, excess unemployment and unemployment rate are the main interrelated indicators that are used to characterize the status of employment.

Guinness Book of Records: The lowest unemployment rate was registered in Switzerland in December 1973 (the population of 6.6 million people) The total number of unemployed was 81 people. In Europe in 2012, the lowest unemployment rate in Austria - 4.4%, and the highest - in Spain (25.8%).

Full-time - an empty idea, if it means the employment of jobs, where nothing useful is made. The meaningful purpose of the idea of \u200b\u200bcomplete employment is productive employment.

Productive employment - Organization of labor use in such a way that those engaged in the goods and services with the smallest costs needed.

Unfortunately, in our country, we managed to create millions of posts for anyone who are not necessary managers, hundreds of thousands of places for quasi-finished, for reserve workers at large enterprises, especially in the sectors of the military-industrial complex.

Despite the objective nature of unemployment, socio-economic The losses that it generates are obvious:

First, products are not produced, i.e. Some part of the GNP is lost.

Secondly, tax revenues are reduced: the working income is taxed.

Thirdly, the standard of living for those who lost their work is reduced since unemployment benefits are lower than the salary.

Fourth, the psychological state of the unemployed is worse due to the loss of qualifications and self-esteem, moral decline begins.

Fifth, the social and political tensions in society are growing.

To determine the magnitude of the loss of GNP as a result of unemployment, the so-called law OUCEN (It was formulated by the American economist Artur Ouchen).

Oaksen's law: The excess of the actual norm of unemployment of its natural level by 1% leads to the lagging in the volume of the actual GNP compared to the potential GNP by 2.5%.

Assessing unemployment as a socio-economic phenomenon, it is impossible to unequivocally say: it's good or bad. From the point of view of a person who remains without work, it may be a tragedy. It is not by chance that the Americans say: "Unemployment is 100% equal, if the unemployed is - you yourself." And from the point of view of economic dynamics, unemployment is an objective necessity.

Moreover, the friction unemployment is a means of more efficient placement of labor resources of society, and structural unemployment, unless, of course, the benefits of retraining of workers exceed the cost of it, brings the society with a clean win.

However, given the negative consequences that the cyclic unemployment is borne by society, and the friction and structural - people who have worked without work, employment needs targeted state regulation.

Directions of regulating the labor market:

1) employment of unemployed population and assistance in professional preparation and retraining (labor exchange);
2) creation of a flexible labor market legal support labor relations;
3) Social protection of people affected by the unemployment (alexism system).

In world experience, two main types of impact on employment level were developed:

1) active type includes measures to create new jobs and to preserve and raise employment in enterprises;
2) passive type Includes payments for all kinds of benefits unemployed.

Thus, the market system is equally contraindicated and arithmetic "full-time", and too high unemployment. In the level of unemployment, equal to its natural norm, they talk about effective full-time employment, meaning a certain relationship between employment and unemployment.

Already in the 50s. Many economists and politicians suggested that it is possible to reduce the norm of unemployment if you have patience regarding a higher rate of inflation.

From the previous topic, you know that the fight against inflation inevitably leads to a decrease in investment in the economy, as it requires restricting the money supply by reducing public investment and increase the loan interest rate.

In turn, the decline in investment leads to a reduction in demand for labor and, accordingly, the growth of cyclic unemployment. Attempts to reduce the mass of the unemployed by increasing the number of jobs require an increase in investment by expanding state investment programs and low-rate policies of the loan interest. It inevitably increases inflation rates. The same result is obtained when attempts to mitigate unemployment through the system of benefits unemployed.

This relationship found on the example of the British economy Australian economist Arthur Phillips. This phenomenon, as discovered Phillips statistically, existed in the British economy for almost 100 years.

Phillips curve

Cut Curve Phillips Leeper Point M. It characterizes the inflation of demand, which may arise as a result of the state attempts to establish an artificially high level of employment. Cut the right point M. Reflects the fall in prices during the crisis.

During the stagniflation period, there is no movement along the Phillips curve, and the series of shifts of the curve itself is right and upwards, which indicates growth and inflation, and unemployment at the same time.

Un - Natural unemployment rate;

RP - The rate of price increases with the natural level of unemployment.

Until the mid-70s. Many economists still believed that A. Filips's hypothesis continues to be a worker. However, the real curve of the Phillips, made on the basis of the real relationship between inflation and unemployment in the United States for 25 years (1961-186), turned out to be a swirling broken line.

The fact is that inflation is growing much more stable than falls. The growth of aggregate demand almost always leads to acceleration of inflation and reduce unemployment. But the fall in total demand does not always give symmetric reverse results. Even, most likely, the economy will not give these results.

Therefore, the relationship between inflation and unemployment is clearly traced only in the short term, and after all it is for the ability to choose a relatively long-term fiscal and credit Policy Economists hoped, having received the discovery of A. Filips in 1958.

In the short term than the cooler of the Phillips curve, the more significant the reduction in the inflation rate due to a more modest decline in employment. Quantitative estimates are as follows: to reduce inflation by 1% unemployment during the year there must be 2% higher than its natural level. According to the Act of Oaken, this means a decrease in the real GNP by 5% of the potential.

The problem of need to pay unemployment for the reduction of inflation is solved ambiguously. This is a dilemma. Part of economists claims that such a fee is not large, others speak about the moral and psychological inadmissibility of even a minor growth of unemployment. In any case, no one has proven that it is more profitable to dismiss a person for the economy than to ensure its work and in the end more than the product.

D.Kennedy : "We believe that if people have enough talent to invent cars that push people in the rows of unemployed, then people are enough talent to find a new job for unemployed."

CONTROL QUESTIONS

1. Give the cycle definition.
2. Name the external and internal causes of the cycle.
3. Describe how the cycle phases occur. Why does each cycle phase contain the possibility of exiting it?
4. Describe various types of cycles for their duration.
5. What are the main directions of anticyclic politics?
6. What is understood under the purchasing power of money?
7. Explain the essence of inflation and call it the main types.
8. What are the signs and the negative consequences of depressed inflation?
9. What is called demand inflation and cost inflation?
10. With what indicators you can measure the tempo of inflation?
11. Name the main economic and social consequences of inflation.
12. Name the basic measures of adaptation and anti-inflationary policy.
13. Give the definition of unemployment and name the reasons that generate this phenomenon.
14. Name the main types of unemployment.
15. What do they differ from the point of view of the causes and methods of partial overcoming?
16. What economic science calls full employment?
17. Why does the unemployment rate correspond to it natural?
18. Name the main employment rates.
19. What are the economic and social consequences of unemployment?
20. Word the Oaken's law.
21. What are the main directions and types of state regulation of the labor market?
22. How is unemployment and inflation?
23. What is the essence of the Phillips curve? What are the boundaries of its practical application?

Tasks and exercises

1. Suppose that the inflation rate was equal to 0, and the real interest rate was 5%. What size of the nominal interest rate will be able to guarantee the same real interest rate subject to an increase in inflation to 15%?
2. Inflation rates are 100% per year. What are the consequences of inflation for the following persons:
- a) a lender providing a period for a period of a year under 50% per annum?
- b) the borrower who took the loan for a period of 1 year under 50% per annum?
- c) a person who has a fixed income?
- d) the tenant, if the rent increased for the year by 70%?
3. If prices increase by 15% per month, how much will they increase during the year?
4. Try to determine the status in the workforce of the following people:
- a) a qualified mechanic who cannot find a job corresponding to its level and waiting for the general improvement in the economy in order to re-enter the workplace;
- b) day branch student;
- c) temporarily abbreviated working bearing plant (due to the lack of demand for certain types of bearings) and waiting for the return;
- d) a woman who has passed from work and waiting for a child;
- e) a woman who has passed from work on maternity leave;
- e) dismissed due to the liquidation of the office engineer working

janitor in housing and communal services;

g) dismissed due to the elimination of the office engineer, not found work.
5. If the official unemployment rate is 10%, and the number of employed is 90 million people, how much is the unemployed?
6. The following are conditional data on the dynamics of unemployment and price index:


Unemployment rate,%
Price index

Draw a schedule characterizing the Phillips curve.

7. In Russia in 1994, the occupied population was 68.5 million people, and economically active - 73.96 million people. What was the number of unemployed, and what was their share in the economically active population?
8. Using the OUCEN law, calculate the absolute loss of products associated with unemployment:

The actual unemployment rate \u003d 9.5%.

Natural unemployment rate \u003d 6%.

Nominal volume of GNP \u003d 3300 billion rubles.

9. Install the correspondence between the cycle phases and their content:

10. Install the correspondence between the forms of unemployment and their content:

Tasks for the seminar

1. List your own assets portfolio. What kind of part of you keep in the form MR Do you have any assets in the form M 2,such as, savings deposits? Do you have securities or real estate? Whether the part of your assets portfolio stored in shape is changing MR If so, what are the reasons for these changes? Does your personal demand for money have a stable relationship with your income and with existing percentages? Discuss these questions.
2. Try to find the reasons for the fact that government control over prices and salaries may be ineffective to suppress inflation.
3. During the New Year festivities in all Christian countries, the demand of the population is increasing. How should the Central Bank react to this if he wants to maintain a monetary mass as a constant? What happens to the monetary base and money multiplier?
4. You are already known to the views of Keynesians and Monetarists on how to maintain macroeconomic stability. Compare their regulation tips cash circulation and deterrent inflation. results comparative analysis Write down in the form of a table.
5. Despite the fact that money is more convenient for making transactions than Barter, the latter still did not disappear from the modern economic system. Give an example of barter from your personal experience And explain why Barter was used in this case.
6. What are the inflation rates do you expect this year? To what extent your expectations are due to the experience of the previous one? Did you influence your expectations of the pace of future inflation of the article with economic forecasts or political reviews?

Tests

1. When the economy passes the lifting phase:
- a) inflation begins to grow;
- b) the real GNP does not change;
- c) friction unemployment disappears;
- d) Cyclic unemployment is growing.
2. The expected inflation damages:
- a) money holders;
- b) people with fixed income;
- c) owners of restaurants;
- d) all of the above.
3. External signs of inflation are as follows:
- a) the price of the workforce is growing, the supply of goods is reduced;
- b) the prices of goods are growing, real wages are falling;
- c) prices for goods are reduced;
- d) grow real incomes of the population.
4. An indicator of the inflation rate is:
- a) foreign trade price index;
- b) consumer price index;
- c) nominal exchange rate;
- d) Currency purchasing ability parity.
5. Economists believe that cyclic unemployment:
- a) temporary phenomenon;
- b) is capable of self-regulation;
- c) does not constitute a serious problem;
- d) arises during recession.
6. Full-time is associated with:
- a) the total absence of unemployed;
- b) hyperinflation;
- c) the concept of natural norm of unemployment;
- d) cyclic unemployment.
7. Stagflation refers to a combination:
- a) inflation and unemployment;
- b) the growth of aggregate production and inflation;
- c) rapid economic growth and unemployment;
- d) rapid economic growth and inflation.
8. Cyclic unemployment is related:
- a) with a decrease in economic activity;
- b) with an increase in labor productivity;
- c) with a phase of lifting in the economic cycle;
- d) with division of labor.
9. Over time, the natural norm of unemployment:
- a) must decrease;
- b) should grow;
- c) can change;
- d) may decline, but can not grow.
10. When the inflation rate is lower than the expected norm:
- a) unemployment changes;
- b) unemployment should grow;
- c) unemployment should decrease;
- d) unemployment is constant.
11. With full employment, but high inflation, which policy is likely to lead to a decrease in its pace:
- a) an increase in government spending;
- b) reducing government spending;
- c) tax reducing;
- d) increasing taxes.

Blitz survey

1. The cyclicity of the economy is continuous oscillations of the market conjuncture.
2. Periods of increasing economic activity are characterized by intensive development.
3. The economic cycle includes four phases.
4. Investment fluctuations do not affect the economic crisis.
5. State regulation can prevent the economic crisis.
6. Structural crises are short-term.
7. Inflation is usually not related to the money supply.
8. Inflation is impossible in the absence of money.
9. Even with 1000% per annum on bank deposits, the actual interest rate may be negative.
10. Inflation in any case is equivalent to a decrease in real income.
11. The decline in prices by 10% in constant income means the growth of real income by 10%.
12. The population quickly rebuilds its behavior during inflation.
13. From inflation, all society carries a loss equally.
14. Indexing income is very effective method Fighting inflation.
15. Full employment means the complete absence of unemployment.
16. The simultaneous existence of inflation and unemployment is called depression.
17. Friction unemployment is considered by economists as a completely unacceptable phenomenon.
18. The Phillips curve describes the positive relationship between inflation and unemployment.
19. When the economy passes the lifting phase, inflation begins to grow.
20. Excessive unemployment is a situation where the official norm of unemployment is higher than natural.
21. The cause of structural unemployment is to reduce general economic activity.
22. Active type of employment is to pay unemployment benefits.

Basic concepts

Adaptation policy

Anti-inflation policy

Anticyclic politician

Unemployment

Hyperinflation

Gradualism

Depression

Natural unemployment rate

Law OUCEN

Stagnant unemployment

Excess unemployment

Inflation psychology

Inflation

Inflation costs

Inflation demand

Phillips curve

A crisis

Revival

Official unemployment rate Depressed inflation

Consumer Accidence

Full-time

Productive employment

Seasonal unemployment

Stagflation

Structural unemployment Structural crises Patron Inflation Friction unemployment Cyclic unemployment Economic cycle

LITERATURE

1. Blag M. Economic thought in retrospect. M.: Case, 1995.
2. Bogdanov I.Ya. Economic security of Russia: theory and practice. M.: IF RAS, 2004.
3. Gershaft M. Remuneration, employment and social protection. // Raz. № 3. 2002.
4. Grevykh L.S., Nureev R.M. Economy. Course base: Textbook for universities. M.: Vita, 2005, ch. fourteen.
5. Monetary policy in inflation. // Money and loan. № 6. 2005.
6. Livshitz A. Inflation. Short special course. // Razh, No. 4-6. 1992.
7. McConnell K., Bruz S. Economics: principles, problems and politics. M.: Infra-M, 2002, TL, p. 163-173, 338-344. T. 2, p. 346-357.
8. Nikitin S.M. Inflation and struggle with it: foreign experience and Russia. // Money and loan. 2003. No. 5.
9. Dictionary of Modern Economic Theory Macmillan. M.: Infra-M, 2003.
10. Heine P. Economic image of thinking. M.: News, 1991, p. 483-490.
11. Economic I. national security: Tutorial / Ed. Oleinikova E.A. M.: Exam, 2004.

Topics of abstracts

1. Features of inflation in Russia.
2. Methods of combating inflation: Western experience.
3. Picture of Russian unemployment.

Macroeconomic instability - This is, above all, fluctuations in economic activity (economic cycles), the appearance of unemployment, underloading production capacity, inflation, the deficit of the state budget, the deficit of foreign trade balance.

Forms Macroeconomic instability: - Cyclicality of economic development

Unemployment inflation

Economic cyclicity - These are periodically repeated balance of equilibrium in the national economy, which are accompanied by a periodic abbreviation, and then an increase in production and aggregate demand for episodic equilibrium recovery.

The economic cycle covers time from the moment of the peak situation in the previous rise until the achievement of this point in the subsequent volume of production. Economic cycles differ from each other by duration and intensity, but they all have the same phases, although the latter also differ from their "fellow" in previous and subsequent economic cycles. Four phases of the economic cycle are distinguished: peak, recession, lower point recession, revival. On the chart it looks like this.

Phase cycles:

Trend. - It is the long-term dynamics of real GDP, calculated as the average value of its oscillations in the course of economic cycles.

A crisisit is characterized by a sharp reduction in business activity, falling prices, taxing, when increasing the unrealizable inventories leads to a decrease in production volumes, and sometimes direct destruction of the part of the useful products

Depression- this is a period of adaptation of economic life to new conditions and needs, phase of preparation for new equilibrium

Revival (expansion) - this is the period of restoration of the previous parameters of the economy, the first, quite real steps towards economic growth

Climb (expansion, boom) is a phase in which the economy is gaining high races, the acceleration of economic development is manifested in a significant update of fixed capital, the introduction of innovation and the emergence of the mass of new goods and industries, in the rapid growth of investments, securities, interest rates, prices, and prices and salary. The reasons for economic cycles were seen in a variety of circumstances: -Teriodicity of updating the main capital-investment process - violation of the laws of monetary circulation - uneven accumulation of capital-missed consumption of the population-even excessive reproduction

Even 11-year cyclicity of solar activity was called as the cause of economic cycles. Marxism main reason Economic crises saw in developing during capitalism a contradiction between the social nature of production and a private form of assignment, manifested through 3 main types of contradictions: -Mode production and consumption-between production organization at individual enterprises and anarchy of production in society in general, between labor and capital

3.27.Besrabotitsa.

Unemployment - this is such a socio-economic phenomenon in the economy, when a certain part of the working-age population, who wants to work, does not have such an opportunity and becomes forced to unoccasiated, excessive

Types of unemployment:

-Friction unemployment - This is a search for search, expectation of work.

-Supported unemployment - unemployment arising in connection with technological shifts in the structure of aggregate demand and the cumulative supply

-Rinal unemployment -this is the amount of frictional and structural unemployment.

Not accelerating inflation The unemployment rate "Nairu" - this is a certain lower limit of the unemployment level, overcoming which causes inflation

Production potential economy - this is real level National Product with Natural Unemployment

Unemployment rate - Quantitative indicator, allowing to compare unemployment for different population (for different countries or for different periods of the same country). The unemployment rate is calculated as the ratio of the number of unemployed to the total number of economically active population or to the number of interests of the population (women's unemployment, youth, rural population etc.). Most often expressed as a percentage.

Economic costs unemployment

Problems related to the assessment of the unemployment rate and determination of unemployment at full employment should not interfere with the understanding of important truth: excessive unemployment entails large economic and social costs

Economic costs of unemployment are the goods and services that society loses when its resources are in forced simply e.

Law OUCEN - This is a law according to which the country loses from 2 to 3% of actual GDP with respect to potential GDP, when the actual unemployment rate increases by 1% compared with its natural level.

In reality, this is not a law, but a tendency with many restrictions on countries, regions, peace as a whole and time periods.

where y is the actual GDP, Y * - potential GDP, is the level of cyclic unemployment, B is an empirical sensitivity coefficient (usually adopted 2.5). For each country, depending on the period there will be its coefficient B.

3.28. Inflation.

Inflation- This is a socio-economic phenomenon, expressed in the continuous, sustainable and general price increase, generated by the disproportions of reproduction in various spheres of market economy and affecting all parties. economic relations

Inflation is measured using the price index. To calculate the price index, they take the relationship between the total price of goods and services of a certain set ("Market Basket") for the time period and the cumulative price of an identical or similar group of goods and services in basic period. The price index is usually expressed as a percentage.

Hidden (depressed) inflation -this is a shortage of goods and services, deterioration of their quality at a more or less stable price level.

Balanced inflation - This is a moderate and simultaneous increase in prices for most goods and services.

Unbalanced inflation- It is uneven, jump-shaped price increases for individual goods and services.

Expected inflation - This is a predicted government, which foresides the population rise in prices

Unexpected inflation - this is an unpredictable government and unforeseen population surgery

Main causes of inflation this is:

1. Lack of balance between state-owned and state power. The emerging budget deficit closes using the launch of the printing of new dennauses, which leads to an increase in the volume of money supply and inflation.
2. Investments leading to inflation. Especially attachments to military equipment, which again cause budget deficiency, and printing new money.
3. Lack of space for market relations and lack of normal competition.
4. Import importance inflation, this factor is increasing more and more, since due to the process of globalization of the economies of countries becomes more open.
5. Waiting for inflation. People constantly think about raising prices, they are waiting for them, so they try to stock it necessary, and the sellers, in turn, are trying to lay out the possible increase in costs.

Socio-economic consequences of inflation.
2.1. Inflation leads to the fact that all cash incomes (both the population and enterprises and the state) are actually decreasing. This is determined by the differences between the nominal income and real. If the nominal income remains stable or grows slower inflation rate, then real income Falls.
2.2. Infillation redistributes income and wealth.
So, inflation redistributes income, and wealth at the expense of those who give money based on the normal and long-term financial contract (interest rate for a loan), in favor of those who postpone payments.
2.3. In the period of inflation, prices for commodity and material values \u200b\u200bare growing in demand in the market. Therefore, the population and enterprises seek as soon as possible materialize their rapidly depreciable cash in stocks, which leads to a lack of money The population and enterprises are the result of a rush procurement of materials is to strengthen the inflation of demand. In order to prevent it, need (3.28Prod) Hard monetary policy state.
2.4. Inflation leads to the fact that it is not advantageous to make long-term investments to anyone, as the money of one purchasing power is investing, and investment revenues are obtained by the money of another purchasing power. Only those investments that ensure profitability above the rate of growth of inflation are appropriate. Moreover, the longer the investment period, the greater the depreciation.
2.5. Inflation also leads to the depreciation of the company's depreciation fund, which makes it difficult to reproduce the process. Inflation reduces the real value of all other savings, whether to contribute to the bank, bond, insurance or cash. People try not to make savings. Firms Also a significant part of the profits are sent to current consumption, which leads to a further reduction in the financial resources of society, folding production.
2.6. Inflation leads to a hidden confiscation of funds from the population and enterprises through taxes.
2.7. From the analysis it can be seen that inflation with no high rates may be an incentive of production development, but it leads to even greater violation economic processes. As a result, inflation rates increase and the society threatens hyperinflation, which brings with them destructive consequences, up to the economic collapse.