The Keynesian AS model considers the functioning of the economy in the short term.

General economic equilibrium (GEE) is a state of the economy in which macroeconomic equilibrium is simultaneously achieved in all national markets: goods, financial assets, labor. At the same time, it assumes a balance of supply and demand, cash and commodity flows, resources and their use, factors and production results.

In macroeconomic theory, there are different approaches to determining the OER.

The main postulates of the classical model:

The economy of perfect competition is self-regulating, since there are absolutely flexible prices, built-in stabilizers (flexible interest rates, nominal wages), and rational behavior of subjects. Equilibrium in markets is established automatically without government intervention.

Money is a unit of account and has no independent value (the principle of neutrality of money). The markets for money and goods are not interconnected.

Full employment. Unemployment can only be natural.

The leading role in the OER belongs to the labor market.

The model assumes that equilibrium has been established in all markets in the real sector.

The short-run production function is a function of one variable (labor).

FORMATION OF EQUILIBRIUM IN THE REAL SECTOR OF THE ECONOMY

1. The leading role in the formation of equilibrium conditions belongs to the labor market.

Since a stable equilibrium in the labor market is achieved under the influence of flexible prices and wage rates, then

where N* is the equilibrium value of employment; (w/p)* is the equilibrium value of the real wage rate.

The supply of goods on the market is determined by the production function, which in the short run depends only on labor:

where Y* is the equilibrium value of national income.

3. In the capital market, equilibrium is determined by a flexible interest rate:

where i* is the equilibrium interest rate.

Since the amount of money does not affect the indicators determined in the real sector of the economy, the price level does not determine the amount of wages, i.e.

If equilibrium is achieved in the labor and capital markets, then, in accordance with Walras’ law, it will also be achieved in the goods market.

In the monetary sector of the economy, the following is determined: the amount of aggregate demand for goods and services as a function of price; equilibrium values of the price level and nominal wages.

The demand for goods and services as a function of price is derived from the classical concept of the quantity theory of money:

MV = PY, therefore

Equilibrium in the market for goods is determined based on their current price level using the Fisher exchange formula (Fig. 3.33).

If there is an increase (decrease) in the money supply, then prices will increase (decrease), but the equilibrium volume will remain unchanged yF = y0 = y5. The new price level will lead to an increase in nominal wages, real wages will not change, therefore, the money market does not affect real indicators.

“Keynes overcame the classical dichotomy and derived the EER using the 1S-LM model of joint equilibrium.

The model was built within a short period, hence:

· economic entities are subject to money illusions;

· lack of price flexibility;

· there is a rigid nominal wage rate (it can only change upward during the boom period);

· the real and monetary sectors are interconnected, therefore money is wealth and has value, the specifics of money demand are reflected through the interest rate mechanism;

· main market - the market for goods that determines effective demand, co-.

This is established in the joint equilibrium model;

All markets are interconnected, the classic dichotomy, the division into real and nominal indicators, is overcome

The price level is one of the parameters of general economic equilibrium

1. The intersection of IS - LM - determination of the value of effective demand (y*) (Fig. 3.35).

2. Projecting the value of y0 for the 1st quarter, we will find the value of P0 corresponding to the joint equilibrium in the market of goods and money.

3. According to the production function schedule (4th quarter), the amount of labor required to satisfy effective demand is determined.

4. Using the graph of marginal labor productivity, the real wage rate (w) is found at the nominal W0 and the price level P0/ If Wd = Ws, then general equilibrium has been achieved. In this case, the point of intersection of aggregate demand and aggregate supply will have coordinates P0 y*. This is the equilibrium in which there is market unemployment in the amount of (Nf - N*). The reason for its existence is the fixed salary (Fig. 3.36)

Equilibrium values of national income (Y*), interest rates (i*), price levels (P*), employment (N*), nominal wage rates (W*) are determined by solving the system of equations:

Synthesized model of general macroeconomic equilibrium

The model is based on the classical model, combined with the IS-LM model with flexible prices (Fig. 3.37).

In the labor market, under the influence of changes in the real wage rate, the equilibrium of labor supply and demand is established at full employment

Therefore, in the model of neoclassical synthesis there is no principle of classical dichotomy formulated by the classical school. The demand for goods is formed on the basis of the IS-LM model with flexible prices as a projection of the LM sliding along IS.

Aggregate supply corresponds to the neoclassical labor market, where the demand for labor and its supply are determined by the real wage rate, and workers are not subject to monetary illusions, that is, they do not confuse the concepts of nominal and real wages.

In the labor market, thanks to a flexible real wage rate, full employment is established. The volume of supply corresponds to the level of full employment and a given production technology, so the aggregate supply curve takes the form of a vertical line.

Aggregate demand is defined as the projection of the LM slide along the IS curve. The graph of the aggregate demand function intersects the perpendicular AS at the point that determines the equilibrium price level.

Nominal wages are determined based on the equilibrium real wage rate and the equilibrium price level. When the supply of money decreases, the curve LM0 will shift to position LM1, and a surplus Y* – Y1 will appear on the goods market. Since the economy is competitive, prices will go down.

In response, RKO will increase without changing the money supply, so the LM curve will move from LM1 to LM0. The opposite situation will occur when the money supply increases.

general characteristics

Representatives of the Keynesian approach consider aggregate (total) supply as an indicator that is equivalent to the production capacity of the economy. They believe that it is influenced by many factors. Therefore, aggregate demand can rise and fall chaotically, affecting overall output, employment and inflation. This approach to the national economy was first used by the British economist John Maynard Keynes. The dominant supply-side thinking of the time did not meet the needs of the time, failing to address the consequences of the Great Depression.

Features of the theory

Keynesianism is a school of thought that advocates active government intervention in the economy. Its representatives believe that decisions in the private sector are the cause of inefficiency in the national economy. Therefore, the only “cure” is active monetary and fiscal policies by the central bank and government. The stabilization of business cycles depends on the latter. Keynesians advocate a mixed economy. Advantage is given to the private sector, but during recessions the state actively intervenes in the national economy.

Historical context

Keynesianism in the economics of developed countries was the standard model at the end of the Great Depression, during World War II and during the period of post-war growth (1945-1973). However, it lost its dominant position after energy crises and stagflation in the 1970s. Currently, we can observe a renewed increase in interest in this area. This is due to the inability of classical market models to cope with the consequences of the financial crisis of 2007-2008. New Keynesianism is a school that assumes the rationality of expectations of households and firms, as well as the existence of market “failures” that require government intervention to overcome. We will dwell on the features at the end of this article.

Keynesianism: representatives

Many scientists adhered to the views of this economic school. Among them:

John Maynard Keynes (1883-1946);
Joan Robinson (1903-1983);
Richard Caan (1905-1989);
Piero Sraffa (1898-1983);
Austin Robinson (1897-1993);
James Edward Mead (1907-1995);
Roy F. Harrod (1900-1978);
Nicholas Kaldor (1908-1986);
Michal Kalecki (1899-1970);
Richard M. Goodwin (1913-1996);
John Hicks (1904-1989);
Paul Krugman (1953 -).

Scientist's contribution to science

The school of economics, which advocates government intervention in the national economy, especially during recessions, is named after its founder and chief apologist. The ideas that John Maynard Keynes presented changed the theory and practice of modern science. He developed his theory of the causes of cyclicality, and is considered one of the most influential economists of the 20th century and modern times. Keynesianism in economics was a real revolution, because it dared to refute the classical ideas of the “invisible hand” of the market, which can independently solve any problems. In 1939-1979, the views of this economic school dominated in developed countries. It was on them that the policies of their national governments were based. However, it was only after the Second World War that enough loans were taken out to eliminate unemployment. According to John Kenneth Galbraith, who was responsible for controlling inflation in the United States during this period, it would be difficult to find another more successful period for demonstrating the possibilities of applying the Keynesian approach in practice. Keynes's ideas were so popular that he was called the new Adam Smith and the founder of modern liberalism. After World War II, Winston Churchill tried to build his election campaign on criticism of this direction and lost to Clement Attlee. The latter advocated an economic policy based on the ideas of Keynes.

Concept

Keynesian theory deals with five questions:

Salaries and expenses.
Excessive savings.
Active fiscal policy.
Multiplier and interest rates.
Investment-savings model (IS-LM).

Keynes believed that to solve the problems associated with the Great Depression, it was necessary to stimulate the economy (encourage investment) using a combination of two approaches:

Decrease in interest rates. That is, the application of elements of monetary policy by the country's central bank (US Federal Reserve).
Government investment in the creation and provision of infrastructure. That is, through an artificial increase in demand through government spending (fiscal policy).

"The General Theory of Employment, Interest and Money"

Keynes's most famous theory was published in February 1936. It is considered a key job in the field of economics. The General Theory of Employment, Interest and Money laid the foundations of terminology and shaped modern theory. It consists of six parts and a preface. The main idea of this work is that employment is determined not by the price of labor as a factor of production, but by the expenditure of money (aggregate demand). According to Keynes, the assumption that competition in the market in the long run will lead to full employment, since the latter is an indispensable attribute of the equilibrium state that is established if the state does not interfere in the economy and everything goes on as usual, is incorrect. On the contrary, he believed that unemployment and underinvestment were the order of the day in the absence of good government management. Even lowering wages and increasing competition does not bring the desired effect. Therefore, Keynes in his book defends the need for government intervention. He even admits that the Great Depression could have been prevented if everything had not been left to the free and competitive market during that period.

Modern Keynesianism

After the global financial crisis, there has been a renewed increase in interest in this area. New Keynesianism, whose representatives are increasingly strengthening their positions in the economic community, appeared in the late 1970s. They insist on the existence of market failures and the impossibility of perfect competition. Therefore, the price of labor as a factor of production is inflexible. Therefore, it cannot immediately adapt to changes in market conditions. Thus, without government intervention, the state of full employment is unattainable. According to representatives of New Keynesianism, only government actions (fiscal and monetary policy) can lead to efficient production, and not the principle of laissez faire.

KEYNESIAN MODEL OF ECONOMY

(Keynesian) An idea of economics based on the model of D. M. Keynes or any other economist who holds the same views. According to the Keynesian model, a capitalist economy can, over a long period of time, be in a state of certain equilibrium, involving significantly lower output than would be compatible with full employment. While the economy is in this state, output is largely determined by the quantity of demand, so the level of output can be influenced by monetary and fiscal policy. This view of the economy should be distinguished from another view, sometimes called the "classical" or "neoclassical" view, in which the economy tends to move toward a natural level of activity. Therefore, the main role of economic policy is to stimulate economic growth on the supply side, for example by encouraging savings and increasing competition in markets. Keynesianism has been criticized for attempting to expand output through demand management when what is needed is supply-side policy. Keynesian policies may actually contribute to inflation.

Economy. Dictionary. - M.: "INFRA-M", Publishing House "Ves Mir". J. Black. General editor: Doctor of Economics Osadchaya I.M.. 2000 .

Economic dictionary. 2000 .

See what the "KEYNESIAN MODEL OF ECONOMY" is in other dictionaries:

- (model of aggregate demand and aggregate supply) macroeconomic model that considers macroeconomic equilibrium in conditions of changing prices in the short and long term... Wikipedia

KEYNESIAN THEORY. ISSUES OF FINANCE, MONEY AND CREDIT- (English Keynesian theory) - the theory of macroeconomic equilibrium, which is achieved through the active stimulation of effective demand through government intervention in the form of fiscal and monetary policies.... ... Financial and credit encyclopedic dictionary

Keynesianism- (Keynesianism) Keynesianism is the economic doctrine of regulated capitalism. The economic school of Keynesianism, the role and laws, development and theory, representatives of Keynesianism Contents >>>>>>>>>>> ... Investor Encyclopedia

Keyesian method- (Keysiansky method) Contents Contents Basic provisions of the concept of economic development of J. M. Keynes Methodological aspects of the economic teachings of J. M. Keynes Basic provisions of the General Theory, etc. Practical program of J.M. Keynes... ... Investor Encyclopedia

- (from other Greek μακρός long, large, οἶκος house and Nόμος law) science that studies the functioning of the economy as a whole, the economic system as a whole, the work of economic agents and markets; totality... ... Wikipedia

Money-credit policy- (Monetary policy) The concept of monetary policy, the goals of monetary policy Information about the concept of monetary policy, the goals of monetary policy Contents >>>>>>>>>> ... Investor Encyclopedia

Macroeconomics- (Macroeconomics) Macroeconomics is a science that studies global economic processes. Definition of the concept of macroeconomics, macroeconomic policy, functions and models of macroeconomic development, macroeconomic instability and its... ... Investor Encyclopedia

Investment stability is the ability of the investment environment of the economy to provide the necessary properties to maintain connections between the subject and the investment object within sufficient limits to achieve investment goals, as well as ... ... Wikipedia

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Labor market- (Labor market) The labor market is the sphere of formation of demand and supply for labor. Definition of the labor market, definition of the labor force, structure of the labor market, subjects of the labor market, labor market conditions, the essence of the open and hidden market... ... Investor Encyclopedia

Plan

Introduction

1. Keynes' theory: key concepts

1.1. Marginal propensity to consume

1.2. Cartoonist

1.3 Liquidity preference

2. Improvement of the Keynes model by his followers

2.1 General provisions of the “income-expense model”

2.2. Goods market, money market and market equilibrium

2.3. Market Equilibrium

Conclusion

List of used literature

Today, when issues of a market economy are especially relevant for Russia, we turn to the experience of developed capitalist countries, to their past and present.

An analysis of the post-war development of most industrialized countries and especially newly industrialized states indicates that there is a direct relationship between the economic policy of the state and the level of market relations: the more developed market relations are, the greater the state influence on the formation of market mechanisms and regulators. It is the state that creates the conditions for free enterprise and fair competition.

In the mid-twentieth century, the economy of developed countries was dominated by the concept of Keynesianism. Since the late 60s. it gave way to new theories. And yet many elements of Keynesian-style government intervention in the economy continue to be used very effectively. Currently, there are two alternative concepts of economic regulation: Keynesianism and monetarism.

Keynesianism proclaims active government intervention in the economy through fiscal policy, while monetarism assumes less strong intervention and, as its instrument, primarily uses monetary policy.

In Russia, with exclusively monetarist methods of influencing the course of economic development proclaimed at the beginning of the reforms, the share of taxes still reaches a level at which a significant part of production becomes virtually unprofitable.

In conditions when the dollar supply in Russia, converted at the official exchange rate, is approximately twice as large as ruble cash, normal monetary regulation using exclusively monetarist methods is impossible.

Therefore, it is of particular interest to turn to the Keynesian economic model with its strong government intervention, since the Russian state has traditionally been very strong.

The purpose of this work is to consider the Keynesian model of the economy in its evolution.

In accordance with the goal, the following tasks are set:

get acquainted with the historical and economic situation of the emergence of Keynes's theory;

consider the personal path of Keynes as an economist who successfully met the requirements of the time;

consider the new ideas that gave impetus to the “Keynesian revolution”;

consider key concepts in Keynes's theory;

trace the evolution of Keynesianism through the refinement of Keynes' model by Hicks and Hansen, as well as through the adjustment given to the model by Phillips;

consider the symptoms and causes of the Keynesian crisis.

1.1 Marginal propensity to consume

According to the classics, savings are a function depending on the interest rate, and consumption is the difference between income and savings. Investments and savings can only be balanced by establishing a certain (equilibrium) interest rate.

What is the situation like when, at a given interest rate, investment declines? Let's turn to the formulas.

Demand for goods (consumption):

Product offer:

Since I has become less than S, a nonequilibrium situation arises:

So supply exceeds demand. Then there are differences in theories. According to the classics, a decrease in prices leads to a decrease in wages, but savings do not decrease - according to the logic of the theory - since they depend only on the interest rate. This means that demand cannot increase and, accordingly, production output must decrease. However, in life, salary affects savings.

Keynes brings consumption to the forefront, and what remains of income after consumption is saved:

Considering the reasons for the propensity to consume, Keynes identifies objective (changes in the purchasing power of a salary unit, changes in the ratio between income and net expenditure, etc.) and subjective (the desire to have a reserve for unforeseen circumstances, and so on).

Hence the basic psychological law: “People tend, as a rule, to increase their consumption as income grows, but not to the same extent as income grows.”

C – consumption size,

Y – income.

∆S=(1-h)∆Y (6)

The value of the marginal propensity to consume:

consumption function – a monotonically increasing curve with a gradual decrease in increment (Fig. 1)

Figure 1. Consumption function according to Keynes

If all income were consumed, the consumption function would be the bisector of the angle of the coordinate axes.

A – zero savings

Line segment ab shows the amount of savings.

The coefficient for ∆Y in expression (6) is the marginal propensity to save:

1.2 Multiplier

The equilibrium condition is S=I.

If investments (I) are constant (that is, do not depend on the level of production), that is, I = I 0, then in equilibrium S = I 0, and income:

Y=C(Y)+ I 0 (8)

What happens if investments receive an increase ∆I 0?. There is an increase in demand on the commodity market by I 0, the equilibrium is disrupted and production expands. But how much higher? If

Y 0 =C(Y 0)+ I 0 (9), then

∆Y 0 = ∆ C(Y 0)+ ∆I 0 ;

Y 0 =h ∆Y 0 + ∆I 0 (10)%

Y 0 =1- (1-h) ∆I 0 =u I 0 (11)

h can be neither 0 nor 1, investigator, if I 0 = 1, then Y 0 > 1, that is, a single increase in investment causes an increase in production by a large amount - this is the multiplier effect.

Let's check this with numbers:

If h = 0.2; 0.4; 0.6,

Then u = 1.25; 1.7; 2.5

The greater the marginal propensity to consume, the more ∆Y 0 increases by unit ∆I 0 .

The u coefficient is the income multiplier.

So, the multiplier is the inverse of the marginal propensity to save.

The effect of the multiplier extends in both directions - if investments received a negative increase, for example, by 1000, then national income decreases by 2500.

It is important to note that investment is determined independently of the savings of individuals, that is, it is the volume of savings that must adapt to the volume of investment, and not vice versa. Consequently, the growth of production of product Y has an upper limit set by the behavior of the investment function: as Y grows, the mass of savings will increase (since h<1) и она может достичь такой величины, что ее не смогут поглотить потребности инвестирования, предложение превышает спрос. Из этого выходит, что инвестиции являются важнейшим показателем в экономической системе.

According to this layout, the following situation becomes possible: the production limit set by the investment function turns out to be lower than the production limit set by full employment. This position formed the basis of Keynes's doctrine of unemployment.

It is important to note that in a state of full employment the multiplier does not operate at all, since the lack of free labor puts a limit on the growth of production. And if additional investment demand arises, then a source of inflation is formed in the system.

1.3 Liquidity preference

Liquidity preference can be defined as the desire to carry cash.

The classics considered the motive for this desire to be, first of all, an operational motive (the need to have cash to conduct purchase and sale transactions, and so on). Keynes considers the main speculative motive when waiting for the price of securities to decline.

The speculative liquidity function depends on the interest rate – i.

The lower i, the higher the demand for cash for speculative reasons.

M is the total demand for money,

M=kpV (12) – according to the classics.

M=kpY+L(i) (13) – according to Keynes.

Keynes linked demand in the money market to the interest rate:

dL/di<0 (14).

From the graphs it is clear that there is an interest rate i, below which no one is interested in investing cash in securities. This phenomenon is called a “liquidity trap.”

Figure 2. Liquidity function.

2.1 General provisions of the “income-expense model”

The most generally accepted interpretation of what Keynes meant is the so-called "income-expenditure model", associated with the names of John Hicks and Alvin Hansen. In 1937, Hicks, in the article "Mr. Keynes and the Classics", proposed a diagram of IS and LM curves.

In his opinion, it expressed the essence of Keyesian economic theory. However, his diagram had nothing to do with the labor market, while other commentators on Keynes's theory saw the heart of the Keynesian system in Keynes's reformulation of the labor supply function.

Another economist, Alvin Hansen, became the main popularizer of a version of Keynesian theory based on the income-expenditure concept. Perhaps Hansen was greatly impressed by Franco Modigliani's article "The Preference of Liquidity and the Theory of Interest and Money" (1944). He included in his version the famous IS - LM diagram , but added to it the equation of supply and demand in the labor market

Introduction........................................................ ........................................................ ..........3

1. CONCEPT AND ESSENCE OF THE KEYNESIAN MACROECONOMIC MODEL................................................... ....................6

2. Aggregate demand and aggregate supply.................................12

2.1. Model of aggregate demand and aggregate supply....................................12

2.2. The principle of effective demand................................................................... ......................16

3. Marginal propensity to consume....................................................18

3.1. The concept of marginal propensity to consume....................................................18

3.2. Employment multiplier and investment multiplier.................................20

4. Possibilities of using the Keynesian model of macroeconomic equilibrium in relation to the Russian economy.................................................... ....................................24

Conclusion................................................. ........................................................ ..28

List of used LITERARY sources...........30

INTRODUCTION

Macroeconomic equilibrium is a state of the economic system in which there is equality in the volume of production and the volume of consumer demand.

In a market economy, the problem of macroeconomic equilibrium is of fundamental importance. Achieving macroeconomic equilibrium is closely linked to achieving full employment, price stability and economic growth.

Different economic schools have different views on this problem. If we consider the classical and Keynesian schools, then the Keynesian theory of macroeconomics, in my opinion, is more relevant than the classical theory. After all, the postulates of classical theory are applicable only to a special case. Because the economic situation it considers is only an extreme case of possible equilibrium states. Moreover, the characteristics of this special case do not coincide with the characteristics of the economic society in which we live, and therefore their preaching leads astray and leads to fatal consequences when trying to apply the theory in practical life. Keynes outlined his theory in the book “The General Theory of Employment, Interest and Money,” which contradicted the then dominant classical views on economics. It was, according to generally accepted opinion, truly revolutionary for its time. His work substantiates the important role of government intervention in economic life.

In his book, Keynes presented a fundamentally new economic model and apparatus of economic analysis. Over time, his teaching developed and was supplemented by the achievements of world economic thought. Currently, it is an integral part of Keynesian theory.

The relevance and practical significance of the problem of macroeconomic equilibrium are determined by the possibility of practical application of economic policy instruments proposed by supporters of the Keynesian approach. Many recommendations of the Keynesian school served as the basis for the economic policies of many governments for several decades. There is no doubt that the experience of implementing Keynesian recipes for regulating the economy should be taken into account when carrying out economic reforms in our country.

In economic science, a fairly large amount of literature is devoted to this problem. Research on this topic was carried out both within the framework of the Keynesian school itself and in other directions.

This work aims to consider the Keynesian model of macroeconomic equilibrium and how it can be used in the Russian economy. Based on the goal, the following tasks are defined in the work:

a) consider economic and mathematical models of macroeconomic equilibrium of Keynesian theory;

b) define the concept of marginal propensity to consume and the multiplier;

c) consider the possibilities of using the Keynesian model in the Russian economy;

d) show the point of view of Keynesian theory on economic policy.

The work uses terms and methods of analysis used in economic science. The method of equilibrium analysis, based on the cycle of income and expenses, is basic in the study of economic models of macroeconomic equilibrium. Keynes introduced into scientific use aggregated macroeconomic quantities that describe objects at the level of the national economy. By establishing quantitative connections between them, economic and mathematical models are constructed - simplified descriptions of economic reality. Models reflect all the essential factors of a particular problem and help to understand the functioning of economic mechanisms.

1. CONCEPT AND ESSENCE OF THE KEYNESIAN MACROECONOMIC MODEL

In 1929 – 1933 The global economic crisis broke out. It was in the 1930s that the figure of John Maynard Keynes appeared.

Keynes set himself the task of proving the possibility of achieving stable economic development. He develops a macroeconomic model. She has been perceived as an anchor of salvation in the US and UK since the “Great Depression” of the 1930s. and, especially, in the post-war period. It establishes the functional relationship between investment, employment, consumption and income. The state plays an important role in this model.

The state must do everything possible to raise the marginal efficiency of capital investments through subsidies, government purchases, etc. In turn, the Central Bank must lower the interest rate and carry out moderate inflation. The latter should ensure a systematic moderate rise in prices, which will stimulate the growth of investment. As a result, new jobs will be created. This will lead to achieving full employment.

The stimulator of production is demand, defined as the psychological readiness of society for consumption. Keynes’s main bet in increasing “aggregate demand” is on the growth of productive demand and productive consumption. He proposes to compensate for the lack of personal consumption by expanding productive consumption.

But Keynes did not ignore personal consumption either. Consumer demand, according to Keynes, also needs boosting, for example, through consumer credit. Moreover, this action should extend to the broadest sections of the population, and not just to entrepreneurs. Therefore, it is believed that Keynesianism is a society of 2/3 of the population.

It is appropriate to note here that Keynes had a positive attitude towards the militarization of the economy. He believed that the production of military products increases the national income, provides employment for workers and high profits. Keynes also believed that the construction of pyramids, earthquakes, even wars could serve to increase wealth.

Keynes's macroeconomic model found its most complete expression in the theory of the so-called “multiplier process.” This theory is based on the “multiplier” principle. Literally, multiplier means multiplier. It means a multiple increase in the growth of income, employment and consumption to the growth of investment.

The Keynesian macroeconomic model revealed its imperfections in the last third of the twentieth century. A new disease appeared - “stagflation”, which combined inflation and stagnation, a depressed state of the market. Meanwhile, true Keynesians “saved” the economy from stagnation or crisis through measured inflation. The fact has become obvious that the government's levers of power, which create additional demand through loans, taxes and money issues, are unable to create a commodity supply, and that they are insufficient to overcome any and all economic disasters. After all, Keynes’ model was focused, among other things, on crises of overproduction, and therefore was designed to activate demand. However, the changes in the world economy that have occurred in recent decades cannot shake the foundation of Keynesian teaching, even if its individual practical conclusions are not combined with the requirements of the day.

The main provisions of the Keynesian model are considered to be:

a) The real sector and the monetary sector are interconnected and interdependent.

The principle of neutrality of money, characteristic of the classical model, is replaced by the principle of “money matters,” which means that money has an impact on real performance. The money market becomes a macroeconomic market, part of the financial market along with the securities market.

b) All markets have imperfect competition.

c) Since all markets have imperfect competition, prices are inflexible, they are rigid or, in Keynes's terminology, sticky, that is, sticking at a certain level and not changing over a certain period of time. For example, in the labor market, the rigidity (stickiness) of the price of labor (nominal wage rate) is due to the fact that:

1) there is a contract system: the contract is signed for a period of one to three years, and during this period the nominal wage rate specified in the contract cannot change;

2) there are trade unions that sign collective agreements with entrepreneurs, stipulating a certain nominal wage rate, below which entrepreneurs do not have the right to hire workers (therefore, the wage rate cannot be changed until the terms of the collective agreement are revised);

3) the state sets a minimum wage, and entrepreneurs do not have the right to hire workers at a rate lower than the minimum.

In the commodity market, price rigidity is explained by the fact that there are monopolies, oligopolies or monopolistic competing firms that have the ability to fix prices.

The interest rate, according to Keynes, is formed not in the borrowed funds market as a result of the ratio of investments and savings, but in the money market - according to the ratio of the demand for money and the supply of money. Therefore, the money market becomes a full-fledged macroeconomic market, a change in the situation on which affects the change in the situation on the commodity market. Keynes justified this position by the fact that at the same level of interest rates, actual investments and savings may not be equal, since investments and savings are made by different economic agents who have different goals and motives for economic behavior. Investments are made by firms, and savings are made by households. The main factor determining the amount of investment spending, according to Keynes, is not the level of interest rates, but the expected internal rate of return on investment, what Keynes called the marginal efficiency of capital. The investor makes an investment decision by comparing the value of the marginal efficiency of capital, which, according to Keynes, is a subjective assessment of the investor, with the interest rate. If the first value exceeds the second, then the investor will finance the investment project, regardless of the absolute value of the interest rate. And the factor that determines the amount of savings is also not the interest rate, but the amount of disposable income. If a person’s disposable income is small and barely enough for current expenses, then the person will not be able to save even at a very high interest rate. Therefore, Keynes believed that savings do not depend on the interest rate, and even noted, using the argumentation of the 19th century French economist Sargan, which was called the “Sargan effect” in economic literature, that there could be an inverse relationship between savings and the interest rate if a person wants to accumulate a fixed amount over a certain period of time. So, if a person wants to provide an amount of 10 thousand dollars for retirement, he must annually save 10 thousand dollars at an interest rate of 10%, and only 5 thousand dollars at an interest rate of 20%.

d) Since prices are rigid in all markets, market equilibrium is not established at the level of full employment of resources. Moreover, in this case, the cause of unemployment will not be the refusal of workers to work for a given nominal wage rate, but the rigidity of this rate. Unemployment is turning from voluntary to forced. Workers would agree to work at a lower rate, but entrepreneurs do not have the right to reduce it. Unemployment is becoming a serious economic problem.

In the commodity market, prices also stick at a certain level. A decrease in aggregate demand as a result of a decrease in total income due to the presence of unemployed people (note that unemployment benefits were not paid), and therefore a decrease in consumer spending leads to the inability to sell all produced products, giving rise to a decline in production. A downturn in the economy affects the mood of investors, their expectations regarding future domestic returns on investment, causing pessimism in their mood, which leads to a decrease in investment spending. Aggregate demand falls even further.

e) Since private sector spending is not able to provide the amount of aggregate demand corresponding to the potential volume of output, that is, the amount of aggregate demand at which it would be possible to consume the volume of output produced under conditions of full employment of resources. Therefore, an additional macroeconomic agent must appear in the economy, either presenting its own demand for goods and services, or stimulating the demand of the private sector and thus increasing aggregate demand. This agent, of course, should be the state. This is how Keynes justified the need for government intervention and government regulation of the economy.

f) The main economic problem in conditions of underemployment of resources becomes the problem of aggregate demand, and not the problem of aggregate supply. The Keynesian model is a model that studies the economy from the aggregate demand side.

g) Since the stabilization policy of the state, that is, the policy to regulate aggregate demand, affects the economy in the short term, the Keynesian model is a model that describes the behavior of the economy in the short term. Keynes did not consider it necessary to look far into the future or study the behavior of the economy in the long term.

Keynesian methods of regulating the economy by influencing aggregate demand and a high degree of government intervention in the economy were characteristic of developed countries in the period after World War II. However, the intensification of inflationary processes in the economy and especially the consequences of the oil shock of the mid-70s brought to the fore and made especially acute the problem of stimulating not aggregate demand, but the problem of aggregate supply. The “Keynesian revolution” is being replaced by a “neoclassical counter-revolution”.

2.1. Model of aggregate demand and aggregate supply

The model of aggregate demand and aggregate supply is a model of macroeconomic equilibrium. Macroeconomic equilibrium is achieved when aggregate demand and aggregate supply are equal.

Aggregate demand. Aggregate demand is the expenditure of households, firms, the state and the rest of the world on the purchase of products produced in the country. The magnitude of each component of aggregate demand varies to varying degrees over time. Thus, government procurement is the most stable part; its size changes relatively slowly.

The graphical representation of the model is a curve with a negative slope. The aggregate demand curve AD = C+I+G+Xn shows the quantity of goods and services that consumers are willing to purchase at each possible price level. At each point, the commodity and money markets are in a state of equilibrium.

Figure 2.1 - Aggregate demand curve.

A negative slope of the curve reflects the inverse relationship between the general price level and the amount of aggregate demand. This is explained by the following price factors.

Wealth effect – when prices rise, the purchasing power of financial assets decreases and economic entities reduce spending. Interest rate effect - a high price level with a fixed supply of money causes an increase in the demand for money and an increase in the interest rate. An increase in interest rates reduces investment. The effect of import purchases - when prices for domestic goods increase, consumers switch to their foreign analogues. Changes in price factors are graphically reflected by movement along the aggregate demand curve.

Non-price factors influencing aggregate demand are consumer welfare, their expectations, taxes, interest rates, subsidies, political situation, technology development, etc. A change in these factors will be reflected in the graph by shifting the aggregate demand curve to the right or left.

Aggregate offer. Aggregate supply is the quantity of final goods and services produced in an economy over a certain period in monetary terms. The aggregate supply curve shows how much goods and services can be supplied by producers at each possible price level.

Non-price factors of aggregate supply are production technologies, consumer welfare, taxes, resource prices, etc.

There are different points of view in economics regarding the shape of the aggregate supply curve. The classical school of economists believes that the curve is vertical at the level of full employment of factors of production. At the same time, prices and nominal wages, according to classical economists, are flexible. This ensures rapid restoration of equilibrium in the economic system. The classical model is more consistent with the behavior of the economy in the long term.

Keynesian theory, in addition to the vertical segment of the aggregate supply curve, considers the horizontal and ascending segments. The fundamental difference from the classical model is that the economy operates under conditions of underemployment; prices, nominal wages and other nominal values are “fixed”.

Figure 2.2 - Aggregate supply curve.

The reasons for the “rigidity” of wages and prices are the effect of employment contracts, the legally established minimum wage, the “menu” effect, the duration of contracts for the supply of products, and the intervention of trade unions. As demand increases, firms increase output without changing the price level or changing it slightly.

The horizontal segment of the aggregate supply curve characterizes the state of the economy in recession - high unemployment and significant underutilization of production capacity. When aggregate demand increases, firms are able to increase production without raising prices.

In the upward segment, an increase in real output is accompanied by an increase in prices. A positive slope of the curve shows a direct relationship between output and the price level. An increase in aggregate demand will cause both an increase in prices and an increase in production volumes.

In the upward segment, the economy is close to full employment. To increase output in response to expanding aggregate demand, firms attract additional resources. Prices for production factors rise, costs rise, and firms are forced to increase product prices.

The shape of the aggregate supply curve allows us to observe the change in production costs per unit of output as the volume of output changes. On the horizontal segment, firms have access to resources at constant prices and production increases without increasing prices. In the upward segment, production costs rise, and the general price level in the economy rises. On the vertical segment, the possibilities for increasing output are exhausted, since all resources are occupied. Expanding aggregate demand will only lead to higher prices. Firms can repurchase already employed resources, increasing their production costs and increasing output. But overall, real output in the economy will not increase.

Macroeconomic equilibrium is the equality of aggregate demand and aggregate supply. A graphical illustration of this equality is the intersection point Yr of the aggregate demand and aggregate supply curves. At this point, all produced national product will be purchased.

P AD

Figure 2.3 - Equilibrium in the AD-AS model.

Keynesian theory assumes that macroeconomic equilibrium can be achieved at any segment of the aggregate supply curve. On the horizontal segment, equilibrium is achieved without inflation, on the upward segment - with a slight increase in prices, and on the vertical - in conditions of inflation.

The equilibrium output changes as the aggregate demand and aggregate supply curves shift. The result of an increase in aggregate demand depends on the state of the economy. The multiplier effect has different strengths on different segments of the aggregate supply curve.

On the horizontal segment, the effect of the multiplier is fully manifested. An increase in aggregate spending causes a significant increase in output while the price level remains unchanged. However, in the ascending and vertical segments, changes in aggregate demand will be absorbed by inflation to one degree or another.

Due to the inflexibility of prices in the short term, a reduction in aggregate demand in the upward and vertical segments will lead to their fall only after a certain time.

A reduction in aggregate supply – a shift in the aggregate supply curve to the left will reduce output and cause prices to rise. In such a situation, cost-push inflation occurs. An increase in aggregate supply indicates economic growth, output increases, and prices fall.

2.2 The principle of effective demand

Effective demand, according to J.M. Keynes, is simply the actual aggregate demand for goods, in which aggregate demand is equal to aggregate supply. The principle of effective demand is that real national income is determined by effective demand, and the latter may be less than necessary to ensure full employment. Consequently, society's resources may not be fully utilized. Thus, setting out the principle of effective demand, J. M. Keynes formulated the main task of his economic analysis: determining the factors influencing the volume of use, that is, employment, of resources available in the economy. According to J.M. Keynes, the problems of resource allocation under conditions of full employment are not so important when resources are not fully used.

So, effective demand = consumption + investment + government purchases + net exports.

The last indicator - net exports, that is, the excess of gross exports over imports - expands the market and thereby stimulates production. Measures to support exports are especially necessary in the context of active growth of national income. An increase in income awakens and develops a tendency to import, which replaces domestic demand with foreign products. An excess of imports over exports is also dangerous because it leads to a balance of payments deficit, the accumulation of external debt, and undermines the currency system.

The subject of Keynes's special attention and the stimulator of his theoretical search was the problem of employment.

Keynes writes: “The level of employment is determined by the point of intersection of the functions of aggregate demand and aggregate supply. It is at this point that the profit expected by entrepreneurs will be greatest. The value D (revenue expected by entrepreneurs when N people are employed) at the point of the aggregate demand function curve where it intersects with the aggregate supply function will be called effective demand.”

3. MARGINAL PROPENSITY TO CONSUMPTION AND MULTIPLIER

3.1. The concept of marginal propensity to consume

Marginal propensity to consume is the share of increases in spending on consumer goods and services in any change in disposable income.

MPC = ∆C ⁄ ∆Yd, (3.1)

MPC – marginal propensity to consume;

∆C – increase in consumer spending;

∆Yd – increase in disposable income.

Fluctuations in the amount of real income are the result of the application of different amounts of employment to a given capitalist asset, so that real income rises and falls with the number of units of labor employed. If, with an increase in the number of units of labor expended with the same size of capital equipment, there is a decrease in profitability, then income (measured in units of wages) will increase faster than the volume of employment, and this in turn will increase more than in proportion to the value of real income ( measured in physical terms).

Real income (measured in physical terms) and income (measured in wage units) will increase and decrease in parallel; it refers to short periods of time during which the size of capital assets remains virtually unchanged. Since real income (in physical terms) may not be accurately measured, in many cases it is more convenient to consider income expressed in units of wages (Yw) as an indicator that fairly accurately establishes changes in real income. In some cases, one cannot overlook the fact that Yw tends to rise and fall in greater proportion than real income; but in other cases the fact that they always undergo changes in the same direction makes it possible to pass unhindered from one value to another.

Therefore, the usual psychological law, according to which, with an increase or decrease in the real income of society, the size of aggregate consumption will change in the same direction, but not with such rapidity, can be formulated by resorting to the following provisions: the quantities ∆Cw and ∆Yw have the same sign, but ∆Yw > ∆Cw, where Cw represents consumption expressed in wage units. The marginal propensity to consume can be defined as dCw ⁄dYw. This value plays a very significant role; it shows how the next increase in output will be divided between consumption and investment.

∆Yw = ∆Cw + ∆Iw, (3.2)

∆Cw – consumption increment;

∆Iw – investment increment.

Thus, we can write the following relation:

∆Yw = k ∆Iw, (3.3)

where the value 1 – 1 ⁄ k is equal to the marginal propensity to consume.

According to psychological observations, the value of the marginal propensity to consume is between one and zero 0< MPC < 1.

This leads to the following conclusions:

If MPC = 0, then the entire increase in income will be saved, since savings is that part of income that is not consumed;

If MPC = 1/2, this means that the increase in income will be divided equally between consumption and saving;

If MPC = 1, then the entire increase in income will be spent on consumption.

3.2. Employment multiplier and investment multiplier

The concept of a multiplier was first introduced into economic theory by the English economist R. F. Kahn (a student of Keynes) in 1931 in connection with the rationale for organizing public works to combat the crisis and unemployment. R. F. Kahn saw the effect of the employment multiplier in the fact that as a result of government spending on public works, not only “primary employment” arises in these jobs, but also derivatives from it - secondary, tertiary, etc. This is how it happens the “multiplication” of purchasing power and employment caused by initial outlays.

The employment multiplier is a coefficient showing how much total employment will increase when one job is created in a particular industry.

Keynes in his work put forward, along with the “employment multiplier,” a new category – the “income multiplier” or “investment multiplier.” The Keynesian multiplier expresses the ratio of income growth to investment growth.

The mechanism of the “investment multiplier” is as follows. Investment in any industry causes a corresponding increase in production and employment in that industry. The result of this will be an additional expansion of demand for consumer goods, which will cause an expansion of their production in the relevant industries. The latter will present additional demand for means of production, etc.

Consequently, as a result of the initial investment there is an overall increase in aggregate demand, employment and income. The multiplier theory sets the task of finding a measure of the increase in demand, employment and income in relation to the increase in investment. Keynes writes: “The investment multiplier indicates that when there is an increase in the total amount of investment, income increases by an amount that is k times greater than the increase in investment.”

According to Keynes, the “multiplier” depends on the value of the “propensity to consume”

Y – national income;

C is the part of it spent on personal consumption.

The ratio of income growth to the amount of new investment (this is the multiplier) acts as a direct function of the “propensity to consume.” In this case, we often talk about the dependence of the “multiplier” on the “marginal propensity to consume,” that is, the ratio of the increase in consumption to the increase in income. Keynes writes in this regard: “The greater the marginal propensity to consume, the greater the magnitude of the multiplier and, therefore, the greater the shift in employment caused by a given change in the size of investment.”

Thus, the multiplier theory substantiates the existence of a direct and proportional relationship between capital accumulation and consumption. The amount of capital accumulation (investment) is determined by the “propensity to consume,” and accumulation causes a multiple increase in consumption.

The generally accepted multiplier formulas in Keynesian literature are as follows:

k = ∆Y ⁄ ∆I; or k = ∆Y ⁄ ∆Y - ∆C; or k = 1 ⁄ 1 - ∆C ⁄ ∆Y. (3.5)

From the formula k = ∆Y ⁄ ∆I it follows that the increase in income is the amount of increase in investment multiplied by the “multiplier”, that is

∆Y = ∆I * k. (3.6)

According to the “multiplier” theory, the coefficient of growth of national income to the amount of investment is determined by the “marginal propensity to consume.” This formal dependence has a twofold explanation. First, the “marginal propensity to consume,” that is, the ratio in which last year’s increase in income is divided into investment and consumption, determines the amount of next year’s consumption that will be caused by these investments. Therefore, the basic formula of the “multiplier” is as follows:

∆Y = (1 ⁄ 1-∆C ⁄ ∆Y)*∆I, (3.7)

∆Y – income increase;

∆I – investment growth;

∆C ⁄ ∆Y – marginal propensity to consume.

It should follow that, firstly, the effect of an increase in investment ∆I, expressed in an increase in income ∆Y, is directly dependent on the “propensity to consume” ∆C ⁄ ∆Y and, secondly, therefore, as a rule, increased investment leads to a short-term increase in income, employment and consumption.

The second explanation of the formal dependence of the national income growth rate on the amount of investment determined by the “marginal propensity to consume” is associated with the phenomenon of “secondary effect”. The essence of this phenomenon is as follows: costs in any part of the economy “induce” subsequent costs in other areas, but within the limits of the “propensity to consume”. Therefore, the increase in income occurs in a decreasing progression, but after a certain period, the increase in income forms a multiple of the initial cost. Moreover, the coefficient of this ratio (multiplier) is directly dependent on the “propensity to consume”.

This mechanism should serve as an explanation for why the “animation process” occurs and why it stops. It occurs due to the “secondary”, “tertiary”, etc. effect. In other words, due to the “induction” of some costs by others and the dependence of the magnitude of this effect on the “propensity to consume”. The “animation process” stops due to the fact that not all income is spent, since part of it is saved and “floats away” from the process. The animation process ends at the moment when the increase in income approaches 0, and the amount of leakages approaches 1, that is, the value of the initial costs.

The multiplier theory shows that large expenditures by the state, large firms, and individuals on consumption have a positive effect on the volume of national income.

4. POSSIBILITIES OF USING THE KEYNESIAN MODEL OF MACROECONOMIC EQUILIBRIUM IN APPLICATION TO THE RUSSIAN ECONOMY

The “postulates of Keynesianism” are important to keep in mind when we reflect on the fate of Russia. From our own experience, we are convinced of the need for qualified macroeconomic analysis, reasonable monetary policy, and studying the feedback between unemployment and inflation.

Economically, the year 2000 in Russia was the most successful in the last ten years. At the same time, there is a widespread opinion that the factors that ensured the favorable development of our economy are not of a fundamental nature. And in this sense, the problem is this: will we be able to take advantage of the favorable situation in order to transfer the economy into a sustainable growth mode, or, after a short respite, will we return to many of the problems that we previously faced.

Many Russian “Keynesians” are sincerely convinced that the deficit of aggregate demand is the lack of money among economic entities. Accordingly, their recipes boil down to one or another option for increasing the money supply and implementing “monetization” of the economy on this basis. Meanwhile, Keynes himself was worried about the exact opposite problem: how to force money to be spent in conditions when economic entities do not want to do this. It is no coincidence that he considered fiscal rather than monetary policy as the main tool for increasing effective demand.

The monetary policy of the Russian monetary authorities can really only deal with processes occurring over a short period of time, and in crisis conditions. This is precisely the approach to the analysis of economic processes developed by J. M. Keynes.

Keynes's ideas, interpreted by J.R. Hicks in the spirit of the neoclassical school, were embodied in the famous IS-LM model.

The main dependencies described by this model are the inverse dependence of national income on interest in the real sector of the economy, and the direct dependence of interest on national income in the monetary sector of the economy. The main conclusion from the IS-LM model is that an increase in the money supply relative to the achieved level of national income makes it possible to reduce the equilibrium interest rate and achieve an increase in national income.

If in the real sector the IS-LM model postulates equality of investment and savings, then in the monetary sector this model postulates the automatic initial flow of money to service transactions, and only the excess money supply in excess of necessary transactions to speculative markets.

The possibility of investing savings and lack of money to service transactions is a priori excluded, which contradicts Russian realities.

However, the IS-LM model describes certain patterns that persist in the Russian economy (the dependence of investment on the interest rate, the decline in national income as investment declines, the dependence of interest on the supply of money) at a given level of national income.

However, this model is not completely adequate for the Russian economy. The absolute lack of money to service transactions in the Russian economy indicates that in its pure form, methods of regulating interest and investment through manipulation of the money supply, proposed by supporters of the Keynesian-neoclassical synthesis, will not give the desired effect. It follows that the Russian economy requires a more stringent model for regulating interest rates, the money supply and its channelization into the real sector of the economy. This model, partly based on a radical interpretation of Keynes's postulates, was worked out and functioned in practice in Japan in the post-war decades. This model includes strict restrictions on open speculative markets (currency and stock markets), the concentration of savings in the form of bank deposits, direct regulation of the size and direction of loans provided by commercial banks, direct regulation of not only the monetary base, but also the money supply, and widespread refinancing of commercial banks. the central bank.

Keynesianism in macroeconomics accepts the so-called effect of real cash balances: a rise in prices in itself does not lead to a long-term decrease in effective demand, since simultaneously with the rise in prices, nominal incomes also rise; rising prices depreciate not current income (they increase), but savings. However, the desire of individuals and firms to restore the real value of savings temporarily limits current consumption and stops further price increases. As a result, after a certain time, the usual ratio between income and savings is restored, but at an increased price level. Thus, aggregate effective demand over a long period of time does not depend on the absolute price level; it is determined by the real level of national income and its distribution between social groups.

However, in the Russian economy, the effect of real cash balances has practically no effect, and aggregate effective demand does not recover for a long time.

As a result, in the Russian economy, not only relative, but also absolute price increases cause a decrease in aggregate demand. This conclusion forces us to turn to traditional theories of demand dynamics under the influence of price changes, but to extend the applicability of these theories to the overall market in the national economy, and not just to the markets of individual goods.

In the modern Russian economy, the most important factors of production, limiting its growth even in those periods when existing demand would seem to allow it to expand, are the shortage of energy resources and metals, as well as the lack of capital in cash. These factors have led to the stagnation of production in Russia in recent years.

In conclusion, I would like to note that none of the theoretical concepts of economic development and economic policy in their pure form is suitable for Russia in this difficult transition period. It is known that in no country has the implementation of Keynesian policy in its pure form been observed. Historical and national characteristics, the role of the social factor - all this leaves its mark on specific policies and gives rise to their own compromise solutions.

But it is necessary to know economic theories. Knowledge of their practical experience, understanding of the conditions under which this or that economic policy measure will produce the maximum effect, will help protect against mistakes in the course of reforming the economy and searching for Russia’s own path of development.

CONCLUSION

The main principle of Keynesian theory is the need for government intervention in establishing macroeconomic equilibrium. According to Keynesians, the market system is accompanied by instability and cyclicality; it is not capable of self-regulation. In the short run, prices and wage rates are difficult to change and therefore cannot balance aggregate demand and aggregate supply. The equilibrium level of output does not always coincide with the level of full employment.

The tools for economic analysis of macroeconomic equilibrium of the Keynesian school are the aggregate demand – aggregate supply model, the IS – LM model.

The aggregate demand–aggregate supply model, where individual markets are aggregated into a single market, reflects changes in the level of production and the price level. Macroeconomic equilibrium in the model is achieved at the point of intersection on the graph of the aggregate demand and aggregate supply curves.

The aggregate supply curve in the Keynesian interpretation consists of three parts: horizontal, upward and vertical.

Each part of the aggregate supply curve corresponds to a specific state of the economy. The aggregate demand–aggregate supply model can illustrate the impact of government economic policy on equilibrium output.

The IS-LM model, being a specification of the aggregate demand – aggregate supply model, combines the commodity market and the money market. The IS curve shows equilibrium in the goods market, the LM curve – in the money market. The point of their intersection determines the combination of interest rate and output level at which the goods market and the money market are in equilibrium. Using the model, you can show the impact of fiscal policy and monetary policy on aggregate spending and equilibrium output.

To help achieve macroeconomic balance, the state must take special measures to regulate the economy. Fiscal policy involves manipulating government spending and taxes, while monetary policy regulates the supply of money. These measures influence changes in the levels of aggregate expenditure and equilibrium output.

The implementation of economic policy is complicated by many factors, but, nevertheless, the correct use of its tools allows us to avoid many negative phenomena associated with the cyclical nature of the economy and direct economic development along the right path.

The Keynesian model of macroeconomic equilibrium is not suitable for the Russian economy during this period. Historical and national characteristics, the role of the social factor - all this leaves its mark on specific policies.

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