6 macroeconomic instability cyclical unemployment and inflation. Summary: Macroeconomic instability, unemployment and inflation. The relationship between inflation and unemployment. Ways to solve these problems

One of the forms of social instability in society is unemployment. Unemployment is a satellite of the market economy, within which the labor market is formed. The development of market relations increases the scale of unemployment. In the past, it was viewed as a temporary phenomenon due to excessive birth rates, the voluntary unwillingness of a certain part of the population to work due to low wages.
Unemployment is a complex socio-economic phenomenon due to the fact that some able-bodied population does not find a job. Some level of unemployment in any economic system is considered normal and justified. Full employment of the working-age population is impossible due to the fact that a certain part of the population, having a job, is looking for better conditions labor and its payment, changes the place of work in connection with relocation, advanced training, as well as for family reasons. In addition, there is a segment of the population that is passive about looking for work (housewives) or does not want to look for work (chronic unemployed).
There are many reasons for unemployment. These include professional changes in the composition of the labor force, structural changes in the economy, the involvement of cheaper female and child labor, population migration, emergencies (disasters, etc.), as well as miscalculations and mistakes in employment policy directions.
In the structure of unemployment, it is necessary to distinguish two levels: natural and actual. For example, according to estimates by Western economists, the natural rate of unemployment rose from 4% in the 1960s. up to 6% at present. The actual or real unemployment rate is determined by the number of officially registered unemployed.
Frictional unemployment is associated with looking for or waiting for a job in the near future. Voluntary layoffs represent the basis of frictional unemployment.
Structural unemployment is caused by changes in the structure of demand. Thus, consumer demand changes under the influence of changes in the structure of production, fashion, tastes, preferences and other factors. That is, certain professions are dying out, as they remain unclaimed. People who have lost their jobs are forced to retrain and acquire new professions.
Frictional unemployment is short-term in nature, as "frictional" unemployed people can sell their skills in the labor market. Structural unemployment is long-term in nature, as unemployed people cannot immediately get a job without retraining or additional training. Therefore, structural unemployment is considered a serious problem. Frictional and structural unemployment are inevitable components of the natural rate of unemployment. The corresponding unemployment rate is calculated as the ratio of the number of unemployed to the number of able-bodied population. The natural rate of unemployment changes under the influence of many factors. Currently, in the country, it is 5 to 7% of the total able-bodied population.
The actual unemployment rate characterizes cyclical unemployment. Cyclical unemployment is unemployment caused by a decline in production, economic crises. Employment is considered full if there is no cyclical unemployment. The actual unemployment rate always increases the natural unemployment rate, which characterizes full employment.
By the nature of the manifestation, they distinguish between explicit, hidden, fluid, partial and stagnant unemployment.
Explicit unemployment is represented by officially registered unemployed and recorded by statistical authorities.
Hidden unemployment is typical for those spheres of the national economy where workers have extremely irregular occupations. These areas include agriculture, small business, handicraft production. In modern Russian economic conditions, the hidden unemployed include workers who are on long vacations associated with the suspension of production.
Fluent unemployment is formed by the loss of their jobs by workers in connection with the liquidation of enterprises, a reduction in production volumes. With the expansion of production, workers are again recruited to work.
Partial unemployment is characteristic of part-time employment (part-time, part-time work week). This primarily applies to pupils, students, pensioners, women involved in raising children. At the same time, partial unemployment is typical for conditions when enterprises, with a reduction in production, are forced to use the underemployment of their employees.
Long-term unemployment is formed by a significant layer of the unemployed who have lost hope and desire to start working. This layer includes vagabonds, homeless people and other degraded personalities.
Unemployment inevitably leads to significant economic losses. To calculate losses in world practice, A. Okun's law is used. The law states that if the actual unemployment rate exceeds the natural one, then each percentage point of excess means a decrease in real GDP by 2.5% (Okun's coefficient).
Unemployment is associated not only with real socio-economic losses, but also with serious problems for society. Thus, unemployment alienates a person from socially useful work, reduces income, and therefore increases the crime rate and the number of mental illnesses and disorders in people, which are directly related to shocks and moral trauma.
Now let's look at another aspect of macroeconomic volatility - inflation. Inflation has existed since the origins of money. Inflation refers to the imbalance between supply and demand, which manifests itself in upward pressure on prices. Otherwise, inflation is the process of devaluation of banknotes. Devaluation of money is one of the critical indicators the presence of inflation. One of the main properties of inflation is uneven price increases.
An increase in the level of market prices takes place, firstly, as a result of an increase in the money supply in circulation (demand inflation) and, secondly, with a decrease in the volume national production(supply inflation).
Demand inflation means that cash income population, organizations and the state are increasing much faster than the actual volume of goods and services increases. The main causes of demand inflation are: an increase in government orders (military and social); an increase in demand in conditions of full employment of the population; growth of workers' wages. Demand inflation, as a rule, takes place in conditions of full employment of the population. With full employment, an increase in demand is not accompanied by a necessary increase in supply. Price increase will be inevitable in these conditions.
Supply inflation is determined by a decrease in supply under the influence of an increase in production costs. The main reasons for inflation due to rising costs are: increased prices for raw materials and fuel; an increase in wages as one of the cost components (up to 2/3 of the total cost); wrong tax policy of the state. Overcoming the inflation of supply is possible on the basis of an increase in labor productivity, regulation of the rate of growth of wages, and acceleration of scientific and technological progress.
From the point of view of the rate of growth of inflation, there are three types of it: moderate, when prices grow by less than 10% per year; galloping - price increases from 10 to 20% per year; hyperinflation - with an astronomical rise in prices.
By forms, open and suppressed inflation are distinguished. Open inflation is determined in terms of fixed prices set by the government. It is reflected in the massive shortage of goods and services, the growth of speculation. Suppressed (latent) inflation is characterized by a chronic shortage of goods and services, the growth of forced cash savings, and the development of the shadow economy.
Depending on the rise in prices for different product groups distinguish between balanced and unbalanced inflation. With an unbalanced inflation, the prices of some goods in relation to the prices of other goods change in different proportions, and in a balanced one - in some.
Economists also distinguish between expected and unexpected inflation. Expected inflation can be predicted, that is, measures can be taken to mitigate its impact. In the event of unexpected inflation, everything happens unexpectedly and its consequences are unpredictable.
The inflation rate is one of the most important characteristics of the state of the economy of any country. For the most complete characterization of the inflation rate in world practice, two indicators are used: consumer prices and the gross national product index (GNP deflator). The GNP deflator is discussed in detail in paragraph 4.1. The consumer price index is calculated as the ratio of the price of the consumer basket in the current period to the price of the consumer basket in the base (past) period.
The rise in the inflation rate inevitably leads to significant socio-economic consequences. One of the most important consequences of inflation is the redistribution of income and wealth in favor of those who use loan capital and receive loans. Inflation reduces the base for credit investments in the real sector of the economy, undermining incentives for economic growth and slowing down scientific and technological progress. Inflation depreciates depreciation funds, and therefore there is not enough money to replace worn-out equipment. Strong inflation prompts the movement of a significant part of capital from the sphere of production to the sphere of circulation for speculative operations. A very negative consequence of inflation is the redistribution national income... Ultimately, inflation leads to a drop in the living standards of the population, to social and economic instability in society. Therefore, government agencies need to carry out competent anti-inflationary policy and implement an effective strategy.

Every country with a market economy is faced with the existence of unemployment. Unemployment can be characterized as a phenomenon in which the supply of labor exceeds the demand for it. The unemployment rate reflects the "unemployment rate" indicator. First of all, it is necessary to answer the question: who is the unemployed?

The entire population can be divided into the following groups:

• population under the age of 16;
• employed population (this group includes workers who

as well as persons employed part-time or part-time

working week);

• unemployed (this group includes persons who do not have a job, but are actively looking for it);
• economically inactive population (this group includes people who can work, but for certain reasons do not work, for example, students, pensioners, housewives);
• the population in institutions, i.e. correctional colonies, psychiatric hospitals.

From the above grouping it is clear that the unemployed is not necessarily the one who does not work. The unemployed does not include the economically inactive population, persons in institutional institutions, and children under 16 years of age. The employed population and the unemployed together constitute the labor force of the country.

Unemployment rate is determined by the ratio of the number of unemployed to the number of labor force, expressed as a percentage. In other words, the unemployment rate is the rate of unemployed in the labor force.

In economic science, there are three types (three types) of unemployment: frictional, structural and cyclical. Let's consider each of them in more detail.

Friction unemployment occurs when individuals need a certain amount of time to find a job that meets their needs and their qualifications. As a rule, frictional unemployment is voluntary, since it affects categories of the population who are temporarily unemployed due to the transition from one place of work to another, for example, due to a change in professional desires and opportunities or a change in place of residence. This part of the population cannot instantly find a new job, since it takes a certain time to transmit information about vacant jobs; in addition, the required information may not be available. Frictional unemployment is short-term: as a rule, it brings together people with good professional skills who cannot stay out of work for long. It is clear that frictional unemployment is inevitable, since at any time a certain part of the population will be looking for a new job.

Structural unemployment is associated with changes in the structure of labor demand, which are caused by technological shifts in production. In other words, this type of unemployment affects persons whose qualifications, skills and abilities are not in demand in connection with the implementation of the results. scientific and technical revolutions in social production. Populations exposed to structural unemployment are forced to undergo retraining in order to meet the requirements of new technologies and find workplace... Therefore, structural unemployment, in contrast to frictional unemployment, is forced and long-term.

(the duration of structural unemployment is determined by the period of retraining).

Cyclic unemployment is associated with economic cycles and occurs during periods of recession in economic activity. In the previous topic, we noted that during a recession, when there is a decrease in production, the unemployment rate rises significantly. Moreover, if frictional unemployment is voluntary, and structural unemployment can be reduced in the process of retraining the unemployed population, then in order to combat cyclical unemployment, a stabilization policy of the state is needed to regulate the development of economic cycles.

Scientists identify the natural rate of unemployment, i.e. full-time unemployment rate, which is defined as the sum of frictional and structural unemployment levels. In other words, the economy has a natural unemployment rate if there is no cyclical unemployment. The natural unemployment rate determines the amount of potential GDP.

In general, the entire working population of the country can be divided into two groups: employed and unemployed. The unemployed population can also be divided into two groups: actively looking for work (unemployed) and not looking for work. In other words, the working-age population can be represented as the following three groups:

• employed population;
• the population is not employed, but actively looking for work;
• population not employed and not looking for work.

The natural level of unemployment always exists, since the working-age population is constantly moving from one group to another. For example, part of the population wants to change their place of work, but due to the fact that they cannot do this immediately, they move from the first group (able-bodied population) to the second group (unemployed, but actively looking for work). At the same time, a part of the unemployed population finds a place of employment and there is a reverse movement - from the second group to the first. In addition, a certain part of the able-bodied population, not wanting to work anymore, can move from the first group to the third, or a part of the unemployed population, having voluntarily stopped looking for work, can move from the second group to the third. Also, sometimes the following picture is observed: the unemployed and not looking for work, the population, having changed plans and decided to work, moves from the third group to the first (if it does not take time to look for a job) or to the second (if it takes a certain time to find a job). All considered options for the movement of the working-age population from one group to another affect the value of the natural level of unemployment, and the continuous nature of these movements makes the natural level of unemployment inevitable.

Note that economists are now increasingly replacing the term "natural unemployment rate" with the term "unemployment rate that does not increase inflation" (abbreviation NAIRU). It is clear that an excess of the natural level of unemployment is undesirable, since this results in cyclical unemployment caused by a recession in business activity. On the other hand, if unemployment falls below the level of full employment, then the economy will inevitably face inflationary processes. Natural unemployment rate ( NAIRU) calculated as the average value of the actual level of unemployment in the state for 20 years: for the previous 10 years and the next 10 years. In the coming period, the unemployment rate is projected taking into account the expected inflation rate.

Determination of the value of the actual and, accordingly, the natural level of unemployment is not devoid of statistical errors. For example, when surveying the population (despite the thoroughness of the sample and the reliability of the survey methods), many give false information. Part of the population, in fact not actively looking for work, may argue the opposite in order to receive unemployment benefits; as a result, this category of the population will be classified as unemployed. Many people employed in the informal sector of the economy may also identify themselves as unemployed, which will again overestimate the actual level of unemployment. Scientists have even identified a pattern: in countries with a high proportion of shadow business, the unemployment rate is very high. A number of economists believe that the real picture of unemployment can be distorted by the fact that part of the population, desperate in search of the desired job, stops actively looking for work and falls not into the category of unemployed, but into the category of the economically inactive population. As a rule, this phenomenon is observed during periods of economic recession.

The natural unemployment rate is fairly stable in the long run. Two factors can be distinguished to explain this stability. First, the currently developed unemployment insurance system. The amount of insurance payments allows the unemployed, without rigidly limiting themselves in time, to look for a job that meets their requirements, which ensures the stability of the unemployment rate. Another factor is the "rigidity" of wages, which entails the emergence of forced unemployment.

It should be noted that the unemployment rate differs both between population groups and between countries. For example, the unemployment rate is lower among the population employed in sectors of the economy that are not subject to cyclical fluctuations. The unemployment rate also differs by gender and age groups: the unemployment rate is higher among young people, the unemployment rate among men and women is not the same. As for the differences in the unemployment rate between individual countries, two main reasons can be distinguished here: states may differ in the phase of the economic cycle or directly in the level of natural unemployment.

Now let's focus on the costs associated with unemployment. The economic and social costs of unemployment can be distinguished. Economic costs are related to the regularity identified by A. Oaken: each increase in the unemployment rate by 1% compared to the natural level corresponds to a decrease in production volumes by 2 - 3% relative to the natural level. This pattern was discussed in detail by us earlier in the previous section. Social costs are associated with the fact that unemployment entails the dequalification of the population, a decrease in incentives to work, a decline in the moral foundations of individuals, a decrease in scientific potential countries, the growth of social tension and, ultimately, threatens a social explosion. The socio-economic costs of unemployment prove the need for active government intervention during periods of strong growth.

In addition to unemployment, one of the aspects of macroeconomic instability is inflation. Inflation is an increase in the general level of prices, accompanied by a decrease in the purchasing power of money. The opposite process is deflation, which is characterized by a decline in the general price level. Note that as a result of inflation, not all types of prices change in the same way: some prices rise more than others, and a number of prices may remain unchanged.

To measure the degree of inflation, the inflation rate is determined, which is calculated as follows:

where NS- inflation rate; P x - average level prices of the current year; P 0- the average price level of the last year.

It should be noted that the inflation rate is measured as a percentage, so this expression should be multiplied by 100%.

If there is a slowdown in inflation in the country's economy, then they talk about disinflation.

Consider the types of inflation. Distinguish between open and suppressed inflation. Open inflation consists in an increase in the level of prices, and latent (suppressed) - in an increase in the shortage of goods. In contrast to open inflation, suppressed inflation is characterized by a more or less stable price level in the economy, but its direct manifestation is a commodity deficit. The latter also essentially means the depreciation of money: citizens and firms cannot buy the goods and factors of production they need, as a result, the value of their money falls. Suppressed inflation occurs when the state is fighting not the cause, but with its consequences - the rise in prices. It seeks to freeze prices and incomes. An extreme option is administrative control over prices and incomes, as was the case, for example, in planning system, as well as in a number of European countries and the United States during the Second World War.

Balanced and unbalanced inflation are also distinguished. As noted earlier, different kinds prices can rise at different rates. With balanced inflation, the rate of change in all prices is approximately the same, with unbalanced inflation, the rate of change in prices is very different. It is clear that it is easier to manage balanced inflation. It is also possible to distinguish expected and unforeseen inflation. With expected inflation, certain measures can be taken to mitigate the negative effects of inflation.

Inflation is also classified depending on its level. In this case, the following types are distinguished:

• creeping inflation;
• galloping inflation;
• hyperinflation.

Creeping inflation characterized by an insignificant rate of price growth, the inflation rate does not exceed 10% per year. Galloping inflation is accompanied by a fairly high rate (from 10 to 100% per year) and, accordingly, a significant depreciation of cash. Hyperinflation, which exceeds 100% per year, poses a serious threat to the country. Hyperinflation generates a crisis of the entire monetary system.

Speaking about inflation, one should focus on Ligu effect(the effect of real cash balances). A. Pigou introduced the volume of property of the consumer sector (and in particular, real money balances) among the arguments of the Keynesian consumption function. At the same time, Pigou argued that an increase in real cash balances leads to an increase in consumption and a decrease in savings. If these relationships take place, then an increase in the money supply (or, which is the same, a decrease in prices) will cause not only a decrease in the interest rate, but also an increase in autonomous consumption. As a result, even if the economy is in a liquid or investment trap, an increase in the money supply or a decline in prices will have an impact on national income.

What is the reason for inflation? What are the reasons for its occurrence? Modern economists distinguish two main factors that give rise to inflation, therefore they distinguish between demand inflation and cost inflation.

Demand inflation due to excess aggregate demand. At a certain period, the volume of production reaches its limit due to limited resources, and the aggregate demand continues to increase, since the needs are unlimited. As a result, the volume of GNP ceases to correspond to the amount of demand, there is an excess demand, which gives rise to a rise in prices.

Let us consider in more detail the “unwinding” of demand inflation. When an economic system is inherently underemployed, characterized by high unemployment and a large proportion of inactive production capacity, production is very low. In the event of an increase in aggregate demand, the number of unemployment and the number of unused production capacities decrease, the value of GDP grows, but prices remain unchanged. The constancy of prices in this case is explained by the large number of unoccupied resources, the use of which is profitable even at fixed (and not increased) prices. With a further increase in aggregate demand, individual sectors of the economy, having increased the volume of goods and services produced, reach the state of full employment. As a result, prices for their goods and services rise, since these industries can no longer increase supply to meet the growing demand. Thus, there is a "outstripping" rise in prices, since the economic system as a whole has not yet reached the state of full employment. At the next stage of growth in aggregate demand, the country will reach full employment conditions, the volume of production will no longer meet the increasing demand, and this excess demand will drive up prices, spurring demand inflation.

One of the reasons for the growth of aggregate demand is the emission of money. Excessive emission of cash leads to an unjustified increase in the population's ability to pay, which, in turn, leads to an increase in aggregate demand, giving rise to inflation.

Another type of inflation is cost inflation- associated with an increase in costs per unit of production. As a result of an increase in average costs, firms are forced to reduce production volumes, i.e. there is a decrease in the aggregate supply. In turn, a decrease in supply at the same level of demand causes an increase in prices, i.e. generates inflation. Cost inflation leads to stagflation - an increase in prices with a simultaneous increase in unemployment and a decrease in GDP.

There are a number of reasons for the increase in unit costs:

• an increase in costs per unit of labor (an increase in nominal wages, which is not compensated by an increase in labor productivity);
• increasing costs per unit of material resources (rising prices for raw materials);
• growth of tax deductions.

Note that cost inflation is "self-limiting" - as a result of an increase in average costs, supply decreases, which prevents further increases in costs and limits inflation.

In fact, it is difficult to distinguish between the types of inflation we have considered - demand inflation and cost inflation. Often the factors behind these two types of inflation exist simultaneously and reinforce each other.

In the economic literature, there are also monetary and non-monetary concepts of inflation that explain its occurrence.

Supporters monetary concepts believe that inflation is due to the growth of the money supply. And an increase in the money supply may be associated with the indexation of citizens' incomes or an increase in the population's debt obligations (an increase in the size of loans taken by citizens, which also ensures an increase in the population's cash flow).

Adherents non-monetary concepts believe that inflation does not arise only as a result of the growth of the money supply. Inflation can be caused by an increase in production costs associated with an excess of the growth rate of wages over the growth rate of labor productivity or due to the lag of growth rates of real incomes from the growth rates of taxes. Non-monetary concepts also identify changes in the structure of demand as the cause of inflation. For example, when new, more modern goods appear, the demand for them increases and, accordingly, the price rises. Decreased demand for obsolete goods should have reduced their price, leaving the general price level unchanged. However, in reality, as a rule, the supply of such goods decreases, as a result of which the general price level rises.

It should be noted that most often inflation is caused not only by monetary factors. Along with the growth of the total volume of money supply, there are also non-monetary factors that ensure its appearance. At the same time, in some cases, inflation can be caused only by purely monetary reasons.

Economic agents, being in conditions of inflation, adapt to it due to the mechanism of inflationary expectations. Inflationary expectations are an assessment by economic agents of changes in inflation rates in the coming period. Market entities, in order to avoid impairment of revenues as a result of inflation, increase the price of goods and services produced by the amount of inflationary expectations. As a result, the mechanism of inflationary expectations dictates the price level to a certain extent.

Now let's look at the socio-economic impact of inflation. First of all, we note that inflation influences the process of income distribution.

Inflation redistributes income between the population and the state in favor of the state. Possessing a monopoly on the issue of money, the state, in order to eliminate the existing budget deficit issues cash. Demand inflation arises, as a result of which depreciates cash population. In other words, the purchasing power of the population decreases, and individuals "under-consume" a certain part of the produced national product. Since the economic system is characterized by a balance equilibrium, the state revenues increase by the amount of the "under-consumed" national product or by the amount of the decrease in the purchasing power of the population. Note also that economists distinguish such a concept as "inflation tax". As a result of the emission of money, the state, whipping up inflation, levies it on the population. The inflation tax is determined by the amount of losses incurred by the population as a result of the depreciation of their funds.

Also, inflation redistributes income between production participants and recipients of transfers (pensions, benefits) in favor of production participants. For example, cost inflation can be caused by an increase in the nominal wages of participants in production. In this case, along with the inflationary rise in prices, the wage... At the same time, the change in the amount of income of recipients of transfer payments is not associated with the rate of change in inflation. If the state does not index incomes, then the amount of pensions and benefits will remain completely unchanged. Therefore, as a result of inflation, the incomes of recipients of transfers will depreciate faster than the wages of participants in production, and the share of transfer payments will decrease in the total amount of income of the population.

Inflation also determines the functional distribution of income: it redistributes income between labor and capital in favor of capital. The higher the inflation rate, the more wages are depreciated. At high rates inflation decreases the share of income from labor in the total amount of income. As a result, income from labor is provided by a smaller part of the national product compared to income from capital.

In addition, inflation redistributes income between creditors and debtors in favor of the latter. It is clear that debtors benefit from inflation as they recover their debts with depreciated cash. The purchasing power of money decreases as a result of inflation, therefore, after the loan is repaid (taking into account the interest on borrowed capital), lenders can acquire a smaller part of the national product than debtors at the time of its receipt.

With a significant budget deficit covered by additional emission, inflation can acquire a rapid pace and form of hyperinflation. With such inflation, there is a sharp depreciation of all income, including tax revenues, which further exacerbates the problem of the budget deficit. Thus, hyperinflation, on the one hand, arises as a result of the budget deficit, and on the other, exacerbates it even more. This phenomenon is called the Tanzi-Oliver effect.

It should also dwell on the negative consequences of suppressed inflation for the economy. The first is the deformation of the market mechanism, since the price system is no longer able to control economic activity. The second consequence of suppressed inflation is the gap between administratively set prices and those prices that align supply with inflationary demand. These are the prices of the “shadow” market, where goods from the official sector of the economy move. As a result, there is a shortage of goods in the official sector and the part of the economy that is engaged in the resale of goods at equilibrium prices flourishes. The third consequence is that when inflation is suppressed, manufacturers of products are deprived of price signals, which hinders the development of the investment process, the expansion of production and the supply of goods. Thus, by destroying the market mechanism, suppressed inflation has a detrimental effect primarily on production.

How do consumers behave in the face of suppressed inflation? With open inflation, they develop adaptive inflationary expectations. When inflation is suppressed, another type of expectation arises, which can be called scarce. They are manifested in a powerful rush demand, dictated not by an increase in prices, but by the disappearance of goods, a shortage. This deficit tends to unwind: the stronger the deficit expectations, the more powerful the rush demand and the sharper the deficit. The paradox is that the deficit cannot be eliminated by quantitatively increasing production and expanding the output of goods.

Scarcity is a price problem. Only the transition from suppressed inflation to open inflation and the introduction of free prices can solve the problem of commodity deficit.

In general, inflation negatively affects all recipients of fixed income. As a result of inflation, the savings owners also suffer greatly, since their accumulated money depreciates. However, despite all the negative consequences of inflation, its suppression entails an increase in unemployment. Let's dwell on this in more detail.

Considering the “spinning-up” of demand inflation, we found that in conditions of full employment, excess demand arises, causing inflation. At the same time, we determined that with a high level of unemployment and a large number of vacant production capacity, an increase in aggregate demand does not cause an increase in prices. Thus, there is a relationship between the rate of inflation and unemployment, and this relationship is inverse: the higher the inflation rate, the lower the unemployment rate and vice versa. It can also be concluded from this that a decrease in inflation will entail an increase in unemployment. The relationship between inflation and unemployment was discovered by O. Phillips. Thus, it is impossible to reduce the inflation rate while maintaining the same level of employment. However, this does not mean that inflation should not be suppressed: its high rates, generating mistrust and fear among the population, increase economic instability in society. Therefore, an anti-inflationary policy of the state is necessary. Let's consider it in more detail.

Anti-inflationary policy in the short term should ensure that the growth rates of the money supply correspond to the growth rates of the GDP volume; in the long term, it is aimed at achieving the correspondence between the volume of aggregate supply and the volume of aggregate demand. There is only one way to suppress inflation - to reduce the growth rate of the money supply; and only the methods of reducing the money supply will determine the anti-inflationary policy of the state.

The government can choose one of the following methods to reduce the volume of money supply:

• shock therapy (a sharp decrease in the volume of money supply);
• graduation (gradual, smooth decrease in the volume of money supply).

The advantage of shock therapy lies in the growth of public confidence in the anti-inflationary policy of the state. The main disadvantage this method is a sharp decline in production and an increase in unemployment. A type of shock therapy is a confiscatory monetary reform, which is the withdrawal of old banknotes and their exchange for new ones in a certain ratio. Note that at the same time, the nominal value of income and the previous level of prices remain. The purpose of the confiscatory monetary reform is that it adjusts the nominal volume of the money supply and brings it in line with the real level of income of the population.

Another method of anti-inflationary policy - grading - is recommended to be applied at low inflation rates. A smooth decrease in the volume of money supply, accompanied by an indexation of incomes, promotes a new round of inflation. Therefore, in conditions of hyperinflation, the suppression of price growth by the method of grading will not bring positive results.

Economists also identify such a way to fight inflation as "price and wage policy." This method is as follows. It is necessary to closely link the growth of nominal wages with the growth of labor productivity and limit price changes to changes in the value of nominal wages. There are a number of disagreements regarding this method, opponents prove its ineffectiveness. However, proponents argue that "price and wage policies" eliminate inflationary expectations and, accordingly, suppress price increases.

For the successful implementation of anti-inflationary policy, thoughtful and purposeful government actions are required. Anti-inflationary policy, depending on the methods of its implementation, affects the functioning of certain sectors of the economy. For example, reducing the budget deficit by raising the income tax will affect the interests of private enterprises, while reducing the budget deficit by reducing government spending will have an impact on activities state enterprises... Therefore, the government must consider and implement a clear strategy to suppress inflation, not succumbing to pressure from various sectors of the economy; only in this case the anti-inflationary policy will bring positive results.

Key concepts

Unemployment

Types of unemployment

Unemployment rate

Natural unemployment rate

A. Okun's law

Inflation

Inflation rates: creeping inflation, galloping inflation, hyperinflation

Inflation Causes: Demand Inflation and Cost Inflation

Open and suppressed inflation Balanced and unbalanced inflation Effect League

Inflation and unemployment: Phillips curve Socio-economic consequences of inflation Tanzi-Oliver effect Anti-inflationary policy of the state

Seminar Discussion Questions

• 1. Give a definition of unemployment.
• 2. What types of unemployment do you know?
• 3. Describe the unemployment rate.
• 4. What characterizes the natural rate of unemployment?
• 5. Describe A.Oken's law.
• 6. Give a definition of inflation.
• 7. What types of inflation do you know?
• 8. What are the signs of open and suppressed inflation?
• 9. What are the causes of inflation?
• 10. Give the definition of an inflationary tax.
• 11. What characterizes the effect of the League?
• 12. Describe the relationship between inflation and unemployment.
• 13. What are the socio-economic consequences of inflation?
• 14. What is the Tanzi-Oliver effect?
• 15. Describe the anti-inflationary policy of the state.

Literature

• 1. Ignatova T.V., Vasiliev P.P., Nekrasov V.N. Economic theory. Foundations of economic theory, microeconomics. - M .: Phoenix, 2010.
• 2. Borisov E.F. Economic theory in questions and answers. - M .: Prospect, 2009.
• 3. Kaznachevskaya G.B. Economic theory. - M .: Phoenix, 2010.
• 4. Gukasyan G.M., Makhovikova G.L., Amosova V.V. Economic theory. - SPb .: Peter, 2003.
• 5. Introduction to economic theory: textbook / EB. Bedrina, O. A. Kozlova, T.A. Salamatova, A.V. Tolpegin. - Yekaterinburg: USTU-UPI Publishing House, 2009.
• 6. Economics: Textbook / I.V. Lipsitz. - M .: Omega-L, 2006.
• 7. The course of economic theory: Textbook / Chepurin M.N. [and etc.]; ed. M.N. Chepurina, E.A. Kiseleva. - Kirov: ASA, 2009.
• 8. Economic theory: Textbook / Ed. A.I. Dobrynina, L.S. Tarasevich; St. Petersburg. state University of Economics and Finance. - SPb .: Peter, 2008.

Okun's Law.

One of the characteristic manifestations of macroeconomic instability is the existence of an army of unemployed. What is unemployment? Is its appearance in society always a social evil, or does unemployment also carry some positive elements?

The main types of unemployment are frictional, structural and cyclical. Frictional unemployment associated with looking for and waiting for a job. This is unemployment among persons for whom the search for a job that matches their qualifications and individual preferences takes a certain amount of time.

Therefore, frictional unemployment is predominantly voluntary and short-term: this category of unemployed has “ready-made” skills at work that can be sold on the labor market. Structural unemployment associated with technological shifts in production that change the structure of labor demand. This is unemployment among persons of the profession, who turned out to be "outdated" or less necessary for the economy due to scientific and technological progress. Structural unemployment is predominantly forced and long-term in nature, since this category of unemployed does not have work skills "ready" to sell, and obtaining jobs for them is associated with professional retraining, often accompanied by a change of residence. The combination of frictional and structural unemployment forms the natural unemployment rate (or the unemployment rate at full employment), corresponding to potential GDP.

A number of economists consider it unacceptable to use the term "natural" in relation to unemployment caused by structural breaks. Therefore, in the macroeconomic literature, the term is widely usedNAIRU, which draws attention to the fact that this stable level of unemployment will stabilize inflation.

Cyclical unemployment represents the deviation of the actual level of unemployment from the natural one. During cyclical downturns, cyclical unemployment complements frictional and structural unemployment: there is no cyclical unemployment during periods of cyclical boom.

Calculations of the actual and natural unemployment rates are complicated by the fact that the criteria for classifying individuals as employed or unemployed are quite flexible .

Usually unemployed those who do not have a job at the time of the statistical survey are considered, but are actively looking for it and are ready to start work immediately. People who have a job, as well as all part-time or weekly employees, are categorized as employed ... The totality of employed and unemployed forms labor force ... Persons who do not have a job and are not actively looking for it are considered to have dropped out of the labor force. These include people of working age who potentially have the opportunity to work, but for some reason do not work: students, retirees, homeless people, housewives, etc.

Unemployment rate is defined as the ratio of the number of unemployed to the size of the labor force, or as the ratio of the proportion of the employed who lose their jobs every month and the sum of this proportion with the proportion of the unemployed who find work every month.

Natural unemployment rate ( NAIRU ) is determined as a result of averaging the actual level of unemployment in the country for 10 years and the next 10 years. The main reasons for the existence of a natural level of unemployment are as follows: 1) Increasing the time of searching for a job in the conditions of the unemployment insurance system. Payment of unemployment benefits reduces incentives and quick employment . 2 ) The stability (rigidity) of wages gives rise to"Unemployment expectations".

Unemployment waiting arises as a result of the excess of the level of real wages over its equilibrium value (Fig. 12). "Rigidity" of wages leads to a relative shortage of jobs: workers become unemployed because at a given wage level the supply of labor exceeds the demand for labor, and people simply expect the opportunity to get a job at a fixed wage rate.

Real salary S (labor supply)

Sustainable salary level

Equilibrium rate

wage D (labor demand)

L (busy)

Unemployment Waiting = L2  L1

The “freezing” of the labor market in a disequilibrium state is associated with: 1) the legislative establishment of the minimum wage, which limits its free fluctuations. The limiting effects of the minimum wage turn out to be all the more significant, the higher the proportion of young people, women, people of low-skilled labor in the labor force, since for these categories of employees the equilibrium wage rate is lower than the legal minimum. 2) Fixing the level of wages in collective agreements with trade unions and individual labor agreements. 3) The lack of interest of firms in reducing the level of wages, the risk of losing skilled labor, increasing overall staff turnover, reducing labor productivity, labor discipline and profit margins.

The trend towards an increase in the natural level of unemployment in the long run is associated with: 1 (an increase in the proportion of young people) in the labor force; 2) an increase in the proportion of women in the labor force; 3) more frequent structural shifts in the economy.

OAKEN'S LAW.

Okun's law connects fluctuations in the unemployment rate with fluctuations in GDP:

Y-Y *= -b (U-Un), (19)

Where Y is the actual volume of production;

Y * - potential GDP

U is the actual unemployment rate.

Un is the natural rate of unemployment

b is the empirical coefficient of sensitivity of GDP to

the dynamics of cyclical unemployment.

If the actual unemployment rate is 1% higher than the natural one, then the actual production volume will be% lower than the potential one. The coefficient in is established empirically and is different in different countries. Often, its values ​​fall in the range from 2 to 3, which indicates significant losses in GDP caused by cyclical unemployment.

Y-Y- 1 = 3% 2 (U  U-1), (20)

Where Y is the actual volume of production in the current year;

Y-1 the actual production of the previous year;

U  the actual level of unemployment in the current year;

U-1  the actual unemployment rate in the previous year.

If in fact the unemployment rate has not changed in relation to the indicator of the previous year, then the growth rate of real GDP is 3% per year. This rate is due to population growth, capital accumulation and scientific and technological progress. For each increase in the unemployment rate by one percent (relative to last year), the growth rate of real GDP decreases by 2%.

Considering the foundations of the functioning of macroeconomic systems, one cannot but dwell on such reasons for their destabilization as unemployment and inflation. Let's start their analysis with the problems of unemployment, the size and dynamics of which determines the volume of real GNP produced in the national economy of a particular country.

Any economic system, in order to maintain the desired stability in the process of its development, seeks to maintain full employment of a capable population, which, other things being equal, provides the maximum possible volume of GNP production. Full employment can, it would seem, be interpreted as 100% employment of the able-bodied population of the country who wants to work. However, it is not. Some level of unemployment in any economic system is considered normal and justified. In order to more clearly define the use in economic theory of the concept of "full employment", consider the various types of unemployment.

Friction unemployment is associated with looking for or expecting a job in the near future. It is inevitable and to some extent desirable, since many workers, finding themselves temporarily "between jobs," usually move from low-paid, unproductive work to more productive activities. This means more high income workers and a more rational distribution of resources, and, consequently, a larger real volume of GNP.

Structural unemployment caused by changes in the structure of consumer demand. Over time, consumer demand changes under the influence of fashion, tastes, preferences and other subjective factors. To meet the new demand, production must be reorganized to release new goods. This takes time, the installation of new equipment and the reduction of old production, which changes the structure of the total demand for labor and leads to partial structural unemployment.

The difference between frictional and structural unemployment is very vague, but it is essential that the "frictional" unemployed have skills that they can sell when hiring, and the "structural" unemployed cannot immediately get a job without retraining, additional training, or even change of residence. Frictional unemployment is thus of a shorter-term nature, and structural unemployment is long-term, therefore it is considered a serious problem.

Frictional and structural unemployment are inevitable components of the natural rate of unemployment.

Thus, full employment in the economic system can be quantified by the formula

The rate (level) of unemployment is calculated as the ratio of the number of unemployed to the number of labor force in the country, which includes all persons who can and want to work.

It is obvious that the natural level of unemployment can change (and does) under the influence of various factors both in time and in space. Currently, the natural unemployment rate is 5 to 7% of the working-age population.

The real volume of GNP in full employment is called production potential of the economy. In other words, the productive potential of the economy is the real volume of output that the economy is able to produce when " full use"labor resources.

Cyclical unemployment - it is unemployment caused by a decline in production, i.e. that phase of the business cycle, which is characterized by the lack of total, or aggregate, costs. When the overall demand for goods (services) in the country decreases, employment of the population decreases and unemployment rises. For this reason, cyclical unemployment is sometimes referred to as demand-side unemployment. So, in the case of "full employment", cyclical unemployment is equal to zero, i.e. absent. Unfortunately, the actual unemployment rate almost always exceeds the natural unemployment rate that characterizes "full employment".

The main "price" of unemployment is unreleased products. The relationship between the unemployment rate and the volume of output is described Okun's law... which states: if the actual unemployment rate exceeds the natural one, then each percentage point of excess means a decrease in real GNP by 2.5% (Okun's coefficient).

Okun's law can be written mathematically like this:

where is the volume of GNP in the country, taking into account inflation; - the volume of GNP in the country in conditions of full employment; - the actual level of unemployment in the country,%; - the natural rate of unemployment in the country (%); TO- Okun's coefficient,%.

The non-economic costs of unemployment are expressed primarily in the de-qualification of the unemployed labor force, the disintegration of the moral foundations of society and its morals.

In addition, unemployment, especially massive unemployment, can lead to social upheavals and disasters in society. For example, Adolf Hitler came to power in 1933 precisely on such a wave of unemployment.

It is quite obvious that only a fairly rich country can afford to support the unemployed. Otherwise, you can get not a "reserve army of labor", but a powerful base of social explosions. This should be remembered by Russian "reformer theorists" too.

• The term "frictional" indicates that this type of unemployment occurs when the labor market does not function smoothly, with friction, in other words, with friction (lat. frictio - friction).
• Arthur Oaken(1928-1980) - American economist. In the 1960s. served as Principal Economic Policy Advisor to John F. Kennedy and Lyndon Johnson. Investigated the problems of pricing and wage formation in a modern mixed economy.

Introduction 4

1. Business cycles 6

2. Unemployment 9

3. Inflation 16

Conclusion 27

References 31

INTRODUCTION

“The ideas of economists ... are much more important than people think.

In reality, they alone rule the world. "

John Maynard Keynes

Every science has its own object of knowledge. This fully applies to economic science. A characteristic feature of the latter is that it is one of the most ancient sciences. The origins of economic science go back centuries, to the place where the cradle of world civilization was born - to the countries of the Ancient East of the 5th-3rd centuries. BC. Later, economic thought was developed in Ancient Greece and Ancient Rome. Aristotle introduced the term "economy" (from the gr. Oikonomia - household management), from which came later - "economics". In the early Middle Ages, Christianity declared simple labor to be a holy deed, and the most important principle began to be affirmed: he who does not work does not eat.

As a science, economics emerged in the 16th-17th centuries. Her first theoretical direction was mercantilism, who saw the substance of the wealth of society and the individual in money, and reduced money to gold. In the XVII century. a new name for economic science appeared - political Economy , (the interaction of economics and politics), which existed for more than three centuries. A new direction for this science was given physiocrats(A. Turgot, F. Quesnay and others), who argued that the source of wealth is not exchange, but agricultural labor. The founder of classical political economy was the Scottish economist Adam Smith (1723-1790), who published his famous book "Investigation of the Nature and Causes of the Wealth of Nations" in 1776. His concept is based on the idea of ​​"non-equal equality", which attached decisive importance to the division of labor and, as a result, laid the foundations of the labor theory of value and the market economy as a whole ( macroeconomics). A. Smith's doctrine was further developed in the works of the German philosopher and economist Karl Marx (1818-1883), who created the theory of scientific socialism in his multivolume work Capital.

Modern economic science today has received a more common name - economic theory, and in the Anglo-American literature - " economics". The term" economics ", which was first introduced by the English economist Alfred Marshall (1842-1924) in his book" Principles of Economics ", is understood as the analytical science of the use of limited resources of the family, enterprise and society as a whole for the production of various exchange between members of society for the purpose of consumption, that is, in order to meet human needs. It is A. Marshall who is considered the "founder" of microanalysis microeconomics- the direction of economic science that studies and analyzes the activities of individual economic entities and the system of decisions they make.

The Great Depression of 1929-1933 returned the world community to an examination of the functioning of the national economy as a whole, from the standpoint of macroeconomics. A new understanding of the possibilities of a market economy is emerging, it became clear: it is necessary to introduce a corrective, controlling function of the state and government, and the concept of "economic policy" appears. Economic policy - "... a set of measures aimed at ordering the course of economic processes, influencing them or directly predetermining their course" - Hirsch. The fundamental task is to ensure general equilibrium, i.e. balance of economic and social.

It should be noted that macroeconomic imbalance is a normal, common and even necessary phenomenon, since economic processes always develop with certain fluctuations and are realized in terms of indicators: supply-demand, price movement, unemployment, etc. This work will consider the macroeconomic indicators of economic theory, namely economic cycles, unemployment, inflation, their prerequisites, consequences, relationships.

1. ECONOMIC CYCLES

"Throughout the history of business cycle literature, various economists have repeatedly argued that the origin of cyclical fluctuations remains an insoluble mystery."

Alvin Hansen

The term "business cycle" refers to the successive ups and downs in the levels of economic activity represented by real GDP.

Rice. 1. Trend and cyclical fluctuations of real GDP:

The graph (Fig. 1) shows trend(trend - trend), by connecting the points of real GDP (at the potential level) of the beginning of the study period t 1 and end of period t n and a wavy line (F) representing fluctuations in the GDP level caused by the existence of economic cycles. The distance between the points of the "peak" bf and bottom points dh denotes duration cycle. Distance from vertical breakpoints to trend line - bb " and dd ", measures amplitude cyclical fluctuations.

It is customary to distinguish four phases of the economic cycle: crisis - segment bc; depression - cd; revival - de; rise - ef... You can often come across a simpler classification of the phases of the cycle, highlighting the downward - recession bd and upward - revival df.

It should be noted that a recession does not always lead to serious and long-term unemployment, and the peak of the cycle is full employment. Despite the common phases for all cycles, individual economic cycles differ significantly from each other in terms of duration and intensity. Therefore, some economists prefer to distinguish three main types of cycles:

· " Short term economic cycles"- regularity 3-4 years. Clearly expressed in D. Kitchin's cycles(1861-1932) and W. Mitchell cycles (1874-1948);

· " Medium-term economic cycles"- regularity, approximately 8-12 years. These cycles are easier to observe than others in the historical context due to their relative regularity and accompanied by significant economic shocks, as opposed to short-term cycles. , but there are other theories, for example, cycles of K. Zhuglyar(1819-1908), in which the reason is interpreted as a set of certain features in the field of banking.

· " Long economic cycles"- the regularity is 40-50 years. The reasons for the cyclical long waves n.d. Kondratieva(1892-1938) - the accumulation of capital to replace the long-existing means of production. Also, there is no doubt about the direct involvement of developments in the field of scientific and technological progress and, as a result, a radical restructuring of production to a qualitatively different level.

Although initial causal factors such as technical innovations, political events, and money accumulation have been used to explain the cyclical development of the economy, it is generally believed that the volume of total expenditures is the direct determinant of national production and employment.

In a market-oriented economy, enterprises produce goods and services only if they can be sold profitably, if the total costs are low, many enterprises are unprofitable to produce goods and services in large volumes. From here low level production, employment and income. A higher level of total spending means that the growth in production is profitable, so production, employment and income will also increase. When full employment arises in the economy, the real volume of production becomes constant, and the additional costs simply raise the price level.

All sectors of the economy are affected by the economic cycle in different ways and to varying degrees. The cycle has a stronger effect on output and employment in investment and durable goods industries than in non-durable goods industries. When the economy begins to experience difficulties, manufacturers often stop purchasing modern equipment and build new factories. In such a situation, there is simply no point in increasing stocks of investment goods. When the family budget has to be cut, payments for durable goods such as household appliances and cars collapse first of all. People don't buy new models. The situation is different with food and clothing, that is, non-durable consumer goods. The family should eat, and these purchases will decrease and their quality will deteriorate, but not to the same extent as for durable goods.

Most investment and durable goods industries are highly concentrated, with relatively few large firms dominating the market. As a consequence, such firms have sufficient monopoly power to resist falling prices over a period of time, limiting output due to falling demand. Therefore, a decrease in demand affects mainly production and employment. The opposite picture is observed in industries producing non-durable goods ("soft goods"). These industries are generally quite competitive and low in concentration. They cannot counteract the rise in prices, and the fall in demand is more reflected in prices than at the level of production.

2. UNEMPLOYMENT

"Unemployment as such, whether provided or flooded by private or government subsidies, humiliates a person and makes him unhappy. "

Ivan Ilyin

A socio-economic phenomenon in which those wishing to work cannot find a job at the normal wage rate, i.e. part of the working population is not employed in the production of goods.

Concept " full employment"It is difficult to define. At first glance, it can be interpreted in the sense that the entire independent population, that is, 100% of the workforce, has a job. But this is not so. A certain level of unemployment is considered normal, or justified.

Unemployment rate- the percentage of unemployed in the labor force, which does not include students, pensioners, prisoners, and boys and girls under 16 years of age.

General unemployment rate- the percentage of the unemployed to the total labor force, including those employed in active military service.

There are several types of unemployment:

· Frictional unemployment

If a person is given the freedom to choose the type of activity and place of work, at any given moment some workers find themselves in a position "between jobs". Some voluntarily change their place of work. Others are looking for new jobs due to being laid off. Still others temporarily lose seasonal jobs (for example, in the construction industry due to bad weather or in the automotive industry due to model changes). And there is a category of workers, especially young people, who are looking for work for the first time. When all of these people find work or return to their old job after being laid off, other job seekers and laid-off workers replace them in the unemployed pool. Therefore, although specific people who have been unemployed for one reason or another replace each other from month to month, this type of unemployment remains.

Economists use the term frictional unemployment in relation to workers who are looking for a job or are waiting for a job in the near future. The definition of "frictional" accurately reflects the essence of the phenomenon: the labor market functions sluggishly, with a creak, without matching the number of jobs and jobs.

Frictional unemployment is considered inevitable and somewhat desirable. Why desirable? Because many workers who voluntarily find themselves "between jobs" are moving from low-paid, unproductive jobs to higher-paid and more productive jobs. This means higher incomes for workers and a more rational distribution of labor resources, and, consequently, a larger real volume of the national product.

· Structural unemployment.

Frictional unemployment is quietly moving into the second category, which is called structural unemployment. Economists use the term "structural" to mean "composite". Over time, important changes take place in the structure of consumer demand and in technology, which, in turn, change the structure of the total demand for labor. Due to such changes, the demand for some types of professions decreases or even stops altogether. The demand for other professions, including new ones that did not exist before, is increasing. Unemployment arises due to the fact that the labor force is slow to react and its structure does not fully correspond to the new structure of jobs. As a result, it turns out that some workers do not have such skills that can be sold quickly, their skills and experience are outdated and become unnecessary due to changes in technology and the nature of consumer demand. In addition, the geographical distribution of jobs is constantly changing. This is evidenced by the migration in industry from the "snow belt" to the "solar belt" over the past decades.

Examples: 1. Many years ago, highly skilled glass blowers were left out of work due to the invention of the machine on which bottles are made. 2. Relatively recently, in the southern states, unskilled and insufficiently educated blacks were ousted from Agriculture as a result of its mechanization. Many were unemployed due to insufficient qualifications. 3. An American shoemaker who has been unemployed due to the competition of imported products cannot become, for example, a computer programmer without undergoing serious retraining, and perhaps without changing his place of residence.

The difference between frictional and structural unemployment is very uncertain. The essential difference is that the "frictional" unemployed have skills that they can sell, and the "structural" unemployed cannot immediately get a job without retraining, additional training, or even a change of residence; frictional unemployment is of a shorter-term nature, and structural unemployment is longer-term and therefore considered more severe.

· Cyclical unemployment

By cyclical unemployment, we mean unemployment caused by recession, that is, that phase of the economic cycle, which is characterized by the lack of total, or aggregate, costs. When the aggregate demand for goods and services decreases, employment decreases and unemployment rises. For this reason, cyclical unemployment is sometimes referred to as demand-side unemployment. For example, in the United States, during the recession of 1982. the unemployment rate rose to 9.7%. In the midst of the "Great Depression" in 1933. cyclical unemployment has reached about 25%. Bankruptcies of enterprises in various spheres of economic activity become widespread, and during this period many millions of people completely unexpectedly and suddenly become unemployed for them. The problem is aggravated by the fact that in conditions of cyclical unemployment, people are not helped by either reorientation or training in some new qualifications. A change of place of residence does not always help either, because a crisis can engulf the entire national economy and even reach the world level.

Cyclical unemployment is also dangerous because, in addition to social disasters, it also brings obvious losses in the volume of real GDP. The famous American economist Arthur Oaken (1928-1979) drew attention to this. He formulated a law according to which a country loses 2 to 3% of actual GDP in relation to potential GDP when the actual unemployment rate increases by 1% over its natural level. In the economic literature, this law is known as Okun's law :

(Y - Y *) / Y * = - l (U - U n) ,

where Y- actual GDP, Y *- potential GDP, U - actual unemployment rate, U n - natural unemployment rate, l (in absolute terms) is the empirical coefficient of GDP sensitivity to changes in cyclical unemployment (Okun's coefficient).

Suppose the natural rate of unemployment is 5% and the actual rate is 8%. Let's say Okun's coefficient is -2.5. Then the lag of the actual GDP from the potential will be (8% -5%) x -2.5 = -7.5%: the country "received less" 7.5% of the potential GDP.

Now let's consider the concept " full employment"population and start with what we call" employment rate", namely, the percentage of the employed to the adult population not on social security, in shelters, nursing homes, and the like.

Full employment does not mean that there is no unemployment at all. Economists consider frictional and structural unemployment to be completely inevitable: therefore, the rate of unemployment at full employment is equal to the sum of the levels of frictional and structural unemployment. In other words, the full employment unemployment rate is achieved when cyclical unemployment is zero. Full-time unemployment rate is also called natural unemployment rate... The real volume of the national product, which is associated with the natural rate of unemployment, is called the productive potential of the economy. This is the real amount of output that the economy is able to produce with the "full use" of labor resources.

The full, or natural, unemployment rate arises when the labor markets are balanced, that is, when the number of job seekers is equal to the number of vacant jobs. The natural rate of unemployment is to some extent a positive phenomenon. After all, "frictional" unemployed people need time to find the appropriate vacancies. “Structural” unemployed people also need time to acquire qualifications or move to another place when it is necessary to get a job. If the number of job seekers exceeds the available vacancies, then the labor markets are not balanced; at the same time, there is a shortage of aggregate demand and cyclical unemployment. On the other hand, with excess aggregate demand, there is a "shortage" of labor, that is, the number of vacant jobs exceeds the number of workers looking for work. In such a situation, the actual unemployment rate is below the natural level. The unusually tense situation in labor markets is also linked to inflation.

The concept of "natural unemployment rate" requires clarification in two aspects.

First, this term does not mean that the economy always functions at a natural level of unemployment and thereby realizes its production potential. Unemployment rates often exceed natural levels. On the other hand, in rare cases, the economy may experience such a level of unemployment, which will be below the natural level. For example, during the Second World War, when the natural level was on the order of 3-4%, the needs of war production led to an almost unlimited demand for labor. Overtime and part-time jobs have become commonplace. Moreover, the government did not allow workers in the "most important" industries to be fired, artificially reducing frictional unemployment. The actual unemployment rate for the entire period from 1943 to 1945 was less than 2%, and in 1944 it fell to 1.2%. The economy exceeded its production capacity, but exerted significant inflationary pressures on production.

Second, the natural rate of unemployment is not necessarily constant in itself, it is subject to revision due to institutional changes (changes in the laws and customs of society). For example, in the 1960s, many believed that this inevitable minimum of frictional and structural unemployment was 4% of the workforce. In other words, it was recognized that full employment is achieved when 96% of the workforce is employed. And now economists believe that the natural rate of unemployment is about 5-6%.

Why is the natural rate of unemployment higher today than in the 1960s? First, the demographic composition of the workforce has changed. In particular, women and young workers, with traditionally high unemployment rates, have become a relatively more important component of the workforce. Secondly, there have been institutional changes. For example, the unemployment compensation program has been expanded in both the number of workers it covers and the amount of benefits. This is important because unemployment compensation, by weakening its impact on the economy, allows the unemployed to look for work more calmly and thereby increase frictional unemployment and the overall unemployment rate.

The controversy over the definition of full-time unemployment is exacerbated by the fact that in practice it is difficult to establish the actual unemployment rate. The entire population is divided into three large groups. The first includes persons under the age of 16, as well as persons in specialized institutions - i.e. persons who are not considered potential components of the workforce. The second group consists of adults who potentially have the opportunity to work, but for some reason are not working and are not looking for work. The third group is the labor force, this group includes persons who can and want to work. It is believed that the workforce consists of employed and unemployed, but actively looking for work.

The unemployment rate is the percentage of the unemployed portion of the workforce.

The statistics office of the Ministry of Labor is trying to estimate the number of workers and unemployed by conducting monthly sample surveys of about 60,000 families nationwide.

An accurate estimate of the unemployment rate is complicated by the following factors:

1. Part-time employment... In official statistics, all part-time workers are categorized as full-time workers. Considering them fully employed, official statistics underestimate the unemployment rate.

2. Workers who have lost hope of getting a job... Excluding workers who have lost hope of getting a job as unemployed, official statistics underestimate the unemployment rate.

3. Fake information... The unemployment rate can be overestimated when some unemployed people claim that they are looking for work, although this is not true, and also the shadow economy tends to overestimate the official unemployment rate.

Output : while unemployment is one of the most important indicators of a country's economic health, it cannot be considered an infallible barometer of the health of our economy.

There is a huge difference in unemployment and inflation rates in different countries... Unemployment rates differ because countries have different natural unemployment rates and are often in different phases of the economic cycle. Over the past several years, inflation and unemployment rates in the United States have been low compared to a number of other industrialized countries.

Average unemployment and inflation rates in nine countries over a five-year period:

Source: Statistics Office under the Ministry of Labor, Organization for Economic Co-operation and Development.

3. INFLATION

“It was during inflation. I received 200 billion marks a month.

The money was given out twice a day and immediately arranged a break for half an hour - in order to have time to go shopping and at least buy something before the new dollar rate was announced, after which the money was depreciated by half. "

Erich M. Remarque "Three Comrades"

Inflation - continuous growth of the average price level for all goods and services. Measuring the price level is important for two reasons. First, it is important for us to know how the price level has changed over a certain period of time. Second, since GNP is market value, or, in other words, the monetary value, of all final goods and services produced during the year, monetary indicators are used as the most common indicators when reducing to a single basis the heterogeneous components of the total volume of production.

The price level is expressed as an index. Price index is a measure of the ratio between the aggregate price of a certain set of goods and services, called " market or consumer basket"(Law" On the consumer basket as a whole for Russian Federation"adopted by the State Duma on October 27, 1999, approved by the Federation Council on November 11, 1999, entered into force on November 23, 1999, valid until December 31, 2000), for a given time period and the aggregate price of an identical or similar group of goods and services in the base period This benchmark, or initial level, is called the “base year.” If we put it in the form of a formula, then we get:

The best known among these indices is consumer price index (CPI), calculated for a group of goods and services included in the consumer basket of an average urban dweller . In the United States, the consumer price index is calculated based on the prices of 265 goods and services in 85 cities of the country. V general view The consumer price index can be represented as the ratio of the consumer basket of the base year, estimated at current prices, to the consumer basket of the base year, estimated at prices of the base year.

If we conventionally designate the three blocks included in the consumer basket as: "Food" - food; "Non-food products" - clothing; "Services" - housing, then the calculation of the consumer price index will look as shown in the table.

	Amount (1982)		Production volume 1982 in 1982 prices		1982 production volume in 1992 prices

CPI = 4100/1950 * 100% = 210.3%

The consumer price index is the most common price index. It plays an important role in the economy, since it is the basis for recalculating wages, government payments and many other payments, and therefore, the economy needs a unified method for calculating it, which at the same time would objectively reflect the change in the price level.

For example, consider the methodology for calculating the PPI, which is correct from a mathematical point of view and is recommended for calculating PPI, but gives a slightly different result than in the previous case. The original formula is as follows:

CPI = (food price 1992 / food price 1982) * 100 * food share +

+ (clothing price 1992 / clothing price 1982) * 100 * clothing share +

+ (housing price 1992 / housing price 1982) * 100 * share of housing.

Having determined the share of each group in the consumer basket and substituting prices, we get:

CPI = 5/2 * 100 * 0.47 + 10/5 * 100 * 0.35 + 20/10 * 100 * 0.18 = 117.5 + 70 + 36 = 223.5

Statistical accuracy requires a single base when calculating indices, and therefore the consumer price index is based on a single base- the volume of production of the base year in the first case or a single share of individual goods in the consumer basket in the second case. In this regard, the consumer price index does not reflect how the change in price affects the change in the share of consumption of a particular product. In addition, the price index is not able to assess how much of the increase in prices is played by qualitative improvements in the product. For example, a 1950 car and a 1992 car differ significantly in quality characteristics. The CPI differs from the GNP deflator in that the GNP deflator estimates the value of the current output at current prices. In addition, the GNP deflator is associated with the goods and services that make up the GNP, while the CPI is associated only with those goods and services that are included in the consumer basket.

The price index is one of the main parameters for measuring inflation. For example, in 1987. the consumer price index was equal to 113.6, and in 1988. - 118.3. The inflation rate for 1988 is calculated as follows:

The so-called "70 rule of magnitude" allows you to quickly calculate the approximate number of years it will take to double the price level. You just need to divide the number 70 by the annual inflation rate:

Economists distinguish between two types of inflation.

· Demand inflation... Traditionally, changes in price levels have been attributed to excess aggregate demand. An economy may try to spend more than it can produce; it may tend to some point outside the curve of its production possibilities. The manufacturing sector is unable to respond to this excess demand by increasing real output because all available resources have already been fully utilized. Therefore, this excess demand leads to inflated prices for constant, real volume of production and causes inflation in demand. The essence of demand inflation is sometimes explained in one phrase: "Too much money is hunting for too few goods."

· Inflation caused by rising production costs or decreasing aggregate supply . Inflation can also arise from changes in costs and supply in the market. V last years there were several periods when the price level rose, even though aggregate demand was not excessive. There have been periods when both output and employment (evidence of insufficient aggregate demand) declined while the general price level rose simultaneously.

The theory of inflation, driven by rising costs, explains the rise in prices by factors that lead to an increase in costs per unit of output. Unit cost is the average cost for a given volume of production. Such costs can be obtained by dividing the total resource costs by the quantity of products produced, that is:

Rising costs per unit of output in the economy reduces profits and the volume of output that firms are willing to offer at the current price level. As a result, the supply of goods and services decreases across the economy. This decrease in supply, in turn, raises the price level. Therefore, according to this scheme, costs, not demand, inflate prices, as it happens with demand inflation.

The two most important sources of cost inflation are increases in nominal wages and in the prices of raw materials and energy.

Wage inflation is a form of cost inflation. Under certain circumstances, trade unions can become a source of inflation. This is because they exercise some control over nominal wages through collective bargaining agreements. Suppose the big unions demand and get big wage increases. Moreover, suppose that by raising them they set a new standard for wages for workers who are not unionized. If the rise in wages nationwide is not counterbalanced by some countervailing factor, such as an increase in output per hour, then unit costs will increase. Producers will respond by reducing the production of goods and services that are put on the market. With constant demand, this decrease in supply will lead to an increase in the price level.

Supply-side inflation is another major form of cost-driven inflation. It is a consequence of the increase in production costs, and therefore prices, which is associated with a sudden, unforeseen increase in the cost of raw materials or energy costs. A convincing example is the significant increase in the prices of imported oil in 1973-1974. and in 1979 - 1980. As energy prices have increased during this time, the costs of producing and transporting all products in the economy have also increased. This led to a rapid rise in cost-driven inflation.

In the real world, the situation is much more complex than the proposed simple separation of inflation into two types - inflation driven by increased demand and inflation driven by rising costs. In practice, it is difficult to distinguish between the two types. For example, suppose that military spending has risen sharply and, therefore, incentives to increase demand in commodity and resource markets have increased, some firms find that their wage spending, material resources and fuel is rising. In their own interests, they are forced to raise prices as production costs have increased. While demand inflation is clearly present in this case, for many businesses it looks like cost inflation. It is difficult to determine the type of inflation without knowing the primary source, that is, the real reason for the rise in prices and wages.

Most economists believe that cost inflation and demand inflation differ from each other in another important respect. Demand inflation continues as long as there is excessive general spending. On the other hand, inflation caused by rising costs automatically limits itself, that is, it either gradually disappears or heals on its own. This is due to the fact that, due to a decrease in supply, the real volume of national product and employment is reduced, and this limits further increases in costs. In other words, inflation, driven by rising costs, generates recession, and recession, in turn, restrains additional increase costs.

It should also be noted the negative consequences associated with the prolonged rise in the average price level. One of the main negative phenomena is the effect of redistribution of income and wealth. This process is possible, first of all, in those conditions when incomes are not indexed, and loans are provided without taking into account the expected inflation rate. Another serious consequence of inflation is the impossibility of making absolutely correct decisions when developing investment projects, which reduces the interest in financing them. The damage from inflation is directly related to its size. Moderate inflation does no harm; moreover, a reduction in inflation is associated with an increase in unemployment and a reduction in the real national product. The greatest harm is caused by hyperinflation, the appearance of which is associated with social cataclysms, the coming to power of totalitarian regimes.

The relationship between the level of prices and the volume of national production is ambiguous. Usually, the real volume of national production and the price level rose or fell simultaneously. However, over the past 20 years or so, there have been several instances in which real national production has declined while prices have continued to rise. Let's forget this for a moment and assume that at full employment, the real volume of national production is constant. Assuming the real volume of national production and income to be constant, it is easier to distinguish the effect of inflation on the distribution of these incomes. If the size of the pie - national income - is constant, how does inflation affect the size of the chunks that go to different segments of the population.

It is imperative to understand the difference between monetary, or nominal income and real income... Monetary, or nominal, income is the number of units national currency which a person receives in the form of wages, rent, interest or profit. Real income is determined by the number of goods and services that can be bought for the amount of nominal income. If your nominal income increases at a faster rate than the price level, then your real income will increase and vice versa. Measurement of real income can be roughly expressed by the following formula:

The very fact of inflation - a decrease in the purchasing power of the national currency, that is, a decrease in the number of goods and services that can be bought per unit - does not necessarily lead to a decrease in personal, real income, or living standards. Inflation reduces the purchasing power of the currency; however, your real income, or standard of living, will only decline if your nominal income lags behind inflation.

It should be noted that inflation affects redistribution differently depending on whether it is expected or unforeseen. In the event of expected inflation, the recipient of the income can take measures to prevent or reduce the negative effects of inflation, which would otherwise be reflected in his real income.

Inflation punishes:

People who receive relatively fixed nominal incomes. Congress introduced indexation of social security benefits; Social security payments take into account the consumer price index to prevent the devastating effects of inflation.

Some salaried workers. Those who work in unprofitable industries and lack the support of strong, militant trade unions.

Savings owners. As prices rise, the real value, or purchasing power, of savings put off for a rainy day will diminish. Of course, almost all forms of saving earn interest, but nevertheless, the cost of saving will fall if the inflation rate exceeds the interest rate.

The benefits of inflation can be obtained by:

People living on unfixed income. The nominal incomes of such families may overtake the price level, or the cost of living, as a result of which their real incomes will increase.

Managers of firms, other recipients of profits. If prices for finished products will grow faster than prices for resources, then cash receipts firms will grow at a faster rate than costs. Therefore, some income in the form of profits will outpace the growing wave of inflation.

Inflation also redistributes income between debtors and creditors. In particular, unforeseen inflation benefits debtors at the expense of creditors.

The distributional effects of inflation would be less severe and even avoidable if people could 1) anticipate inflation and 2) be able to adjust their nominal incomes to account for forthcoming changes in price levels. For example, prolonged inflation that began in the late 1960s led many unions into the 1970s to insist that labor contracts be adjusted for rising costs of living, automatically adjusting workers' incomes for inflation. If you anticipate the onset of inflation, then you can also make changes in the distribution of income between the creditor and the debtor. For this reason, savings and loan institutions have introduced variable rate mortgages to protect themselves from the negative effects of inflation. There is a difference between the real interest rate, on the one hand, and the money, or nominal, interest rate, on the other.

Real interest rate Is the percentage increase in purchasing power that the lender receives from the borrower.

Nominal interest rate Is the increase, expressed as a percentage, in the amount received by the lender.

So, for example, in order for the lender to receive 5% of the real profit on the issued loan with an assumed inflation rate of 6%, he should be assigned a nominal interest rate of 11%. In other words, the nominal interest rate is equal to the sum of the real interest rate and the premium paid to offset the assumed inflation rate.

The influence of inflation on the volume of the national product can be considered in three models, in the first of which inflation is accompanied by an increase in the volume of national production, and in the other two - by a decrease.

· Demand inflation concept assumes that if the economy strives for high levels of production and employment, then moderate (or creeping) inflation is necessary. Moderate inflation – This is inflation, at which the rise in prices is no more than 10% annually, and does not cause serious concern to the population and entrepreneurs, since the interest rate in the capital markets is quite high, which allows contracts to be concluded in nominal terms.

Rice. 2. Phillips curve in the short term:

The inverse relationship between inflation and unemployment was discovered by a professor at the London School of Economics, Alban Phillips. After examining the UK statistics for almost a hundred years (from 1861 to 1957), he came to the conclusion that the rate of growth of prices and wages began to decline if unemployment exceeded the 3% level, and vice versa. In 1958, Phillips published his observations and calculated the inverse relationship between employment and nominal wages. The graphic representation of this dependence is called Phillips curve , which is described as

(w t - w t-1) / w t-1 = - b (N * - Nt) / N *,

where w - nominal wage rate, b - parameter reflecting the sensitivity of the level of nominal wages to changes in the level of unemployment, N * - the level of full employment (corresponding to the natural rate of unemployment).

Phillips' calculations were supported by the theoretical developments of the American economist R. Lipsi. Later P. Samuelson and R. Solow replaced the rate of growth of nominal wages by the rate of inflation in the Phillips model p... In this form, the Phillips model, which reflects the relationship between inflation and unemployment, is shown in Fig. 2.

The Phillips curve shows the inverse relationship between inflation and unemployment in the short run: if at inflation rates p 1 unemployment is at the level U 1, then suppression of inflation to p 2 accompanied by rising unemployment U 2.

The graph (Fig. 2) shows that the inflation rate p, plotted on the ordinate, and the unemployment rate U, marked on the abscissa, are in inverse relationship. In the short term, inflationary increases in prices and wages stimulate labor supply and expansion of production.

· Cost inflation and unemployment... Consider the circumstances under which inflation can cause a decline in both production and employment. Let us assume that from the outset the volume of expenditures is such that there is full employment and a stable price level in the economy. If inflation starts due to rising costs, then with the existing level of aggregate demand, the real volume of production will decline. This means that an increase in costs will cause a sharp increase in prices and, given the total costs, it will be possible to buy on the market only a part of the real product. Consequently, the real volume of production will decrease and unemployment will increase.

· Galloping inflation limited to 10 to 100% per year. Money depreciates quite quickly, so prices for transactions are denominated in a stable currency, pegged to it, or the prices take into account the expected inflation rate at the time of payment.

· Hyperinflation in countries with developed market economies is determined by the rate of over 100%. For countries with an unstable, developing or transitional economy, the criterion for the onset of hyperinflation is much higher, for example, in Russia in 1992 inflation rates reached 1353% per year, but were officially recognized as only close to hyperinflation. Supporters of the concept of inflation, driven by rising costs, argue that moderate, creeping inflation, which may first accompany the economic recovery, then, growing like a snowball, will turn into a more severe - hyperinflation. It leads to the destruction of the welfare of the nation and is often the basis for a change in the regime of power, as a rule, of a totalitarian persuasion.

To prevent unused savings and current incomes from depreciating, that is, to get ahead of the expected price increase, people are forced to "spend money now." Businesses do the same when they buy investment goods. Actions dictated by the "inflationary psychosis" increase the pressure on prices, and inflation begins to "reproach itself".

Hyperinflation can accelerate economic collapse... Violent inflation promotes the fact that efforts are directed not to production, but to speculative activity. Prices can be recalculated daily and even several times a day, there is a "flight from money". It is becoming more and more profitable for the population and enterprises to accumulate raw materials and finished products in anticipation of future price increases. But the discrepancy between the amount of raw materials and finished products and the demand for them leads to increased inflationary pressures. Rather than investing in investment goods, producers and individuals defend themselves against inflation by acquiring unproductive material values- jewelry, gold and other precious metals, real estate, etc.

In an emergency, when prices jump sharply and unevenly, normal economic relations collapse, collapse banking system, not only production is paralyzed, but the market mechanism itself. Money actually loses value and ceases to fulfill its functions as a measure of value and a medium of exchange. Production and exchange are halted and eventually economic, social, and very possibly political chaos may ensue. Hyperinflation accelerates financial collapse, depression, and political unrest. Catastrophic hyperinflation is almost always the result of government reckless expansion of the money supply.

CONCLUSION

"Like it or not, the main problems are modern politics really are purely economic and cannot be understood without knowledge of economic theory. Only a person who understands the main issues of economic theory is able to develop an independent opinion on the problems under consideration. "

Ludwig von Mises

Considering the models of demand inflation and cost inflation, we saw that demand inflation in the short run can temporarily increase real output by stimulating the supply of labor. Cost inflation, on the contrary, leads to a fall in real production and a decrease in the demand for labor. Thus, there is a close relationship between employment and inflation. Hyperinflation, which is usually associated with unwise government policies, can undermine financial system and accelerate the collapse.

The state, as a controlling body, is necessary to conduct stabilization policy - a set of macroeconomic policy measures aimed at stabilizing the economy at the level of full employment, or potential output. There are a lot of recipes for state intervention in the economy under conditions of macroeconomic instability. However, the general principles of influencing the level of business activity boil down to the following provisions: in a downturn, the government should pursue a stimulating policy, and in a boom - a restraining macroeconomic policy, trying to prevent a strong "overheating" of the economy (inflationary gap). In other words, the government should smooth out the amplitude of fluctuations in actual GDP around the trend line (see Fig. 1 again).

A stabilization policy can be compared to shooting at a moving target: the object of government influence (the target is the country's economy) is in motion all the time. And there is a great danger of missing and not firing an accurate shot. If so, then all the measures of stabilization policy will turn out to be useless or even harmful. Discussions on this matter have been conducted by economists up to the present time.

The "wild" economic cycle that shook the foundations of capitalism in the 19th and early 20th centuries, as Samuelson aptly put it, has been put on a bridle. And therefore, summing up, we can say that, despite all the difficulties of the stabilization policy, it is carried out in all countries of the market economy, while naturally having its own differences associated with what is commonly called the "national model of the economy." American capitalism differs from Japanese capitalism, and Japanese capitalism differs from transition economy Russia. Therefore, there can be no absolutely universal recipes for carrying out a stabilization policy. However, knowledge of the basic laws of cyclical development of the economy is an absolutely necessary prerequisite for an effective macroeconomic policy of the government in any country.

In conclusion, I cannot deny myself the ability to cite the main socio-economic indicators of Russia for September 1999 in comparison with previous periods:

The main socio-economic indicators of Russia.

September 1999

January-September 1999 in% to January-September 1998

For reference

september 1998

august 1999

September 1998 VC

January-September 1998 in% to January-September 1997

september 1997

august 1998

Gross domestic product, billion rubles 1)

Output of products and services of basic industries 2)

Industrial production volume, billion rubles

Fixed capital investments (estimate), billion rubles

Agricultural products, billion rubles

Commercial cargo turnover of transport enterprises, billion tkm

including railway transport

Communication services volume, billion rubles

Turnover retail, billion rubles

The volume of paid services to the population, billion rubles

Foreign trade turnover 3), billion US dollars

including:

export of goods

import of goods

Real disposable cash income

Accrued average salary of one employee:

nominal, rubles

real

Total number of unemployed, million people

Number of officially registered unemployed, million people

Consumer price index

Producer price index industrial products

1) Assessment for the first half of 1999; dynamics for the first half of the year to the corresponding period of the previous year. 2) The index of output of products and services of basic industries (IBO) is calculated on the basis of data on changes in the physical volume of output in industry, agriculture, construction, transport, and retail trade. 3) Data are given for August 1999, relative indicators are given in% for August and January-August at current prices.

Changes in the main indicators of the production of goods and services
in January-September 1998 and 1999
(in% to the corresponding period of the previous year)

BIBLIOGRAPHY:

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· V.M.Sokolinsky, M.N. Isalova. Macroeconomic policy in transition period... M., 1994.

· V.M. Sokolinsky. Psychological foundations of economics. M., 1999.

· K. McConnell, S. Bru. Economics, principles, problems and politics. M., 1995.

· The course of economic theory. Study guide (edited by M.N. Chepurin and E.A. Kiseleva). Kirov, 1999

· P. Samuelson. Economy. M., 1994.

S. Fischer, R. Dornbusch, R. Schmalenzi. Economy. M., 1993.

· Textbook on the basics of economic theory (edited by V.D. Kamaev). M., 1994.

· Economy. Textbook (edited by A.S. Bulatov). M., 1997.

· Economic theory (political economy). Tutorial. M., 1997. (Financial Academy under the Government of the Russian Federation).

Best regards, A.A. Grigorov