Moscow State University of Printing. Basic macroeconomic schools Basic lecture notes

Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

Posted on http://www.allbest.ru/

Federal State Educational Institution of Higher Professional Education "Orenburg State Agrarian University"

Department of Economic Theory and Management

Abstract on the topic:

Main macroeconomic schools

Performed:

Student of group 25

"Economics and Management"

Emelyanenko Alena Sergeevna

Checked:

Rakhmatullina Lesya Ildarovna

Orenburg, 2011

Introduction

Main macroeconomic schools. Keynesianism

Neoclassical macroeconomic theory

Monetarism

New classical economics

Institutional - sociological direction

Historical school

Conclusion

Bibliography

INconducting

The second branch of economic theory - macroeconomics - deals with the economic analysis of complex or aggregate indicators. It examines the results of joint economic activity of all participants in social production simultaneously. Macroeconomics answers questions such as: what is money and what role does it play in the economy; what determines the price level and what determines their dynamics; what determines the degree of resource use; how economic growth occurs; what impact does the state have on the economy; what is the role of foreign economies in the development of the national economy.

The purpose of economic theory is to explain the behavior of people in the production, distribution and use of material goods and services in a world of limited resources.

Macroeconomic indicators are currently being watched with interest by the widest sections of the population. People's current incomes directly depend on the level of national income and employment. The value of family assets is directly related to the rate of inflation. The state of a country's balance of payments largely determines the degree of freedom of its residents to move across state borders.

The purpose of this essay is to describe the main macroeconomic directions, theories, schools (Keynesian direction, institutional-sociological direction, neoclassical macroeconomic theory, theory of supply-side economics, new classical economics, monetarism, historical school).

Basicmacroeconomicschools

Modern trends in economic thought include economic theories that were formed in the late 19th and early 20th centuries. They are represented by a wide variety of positions, views, and concepts.

Let us highlight the main directions of modern economic thought:

· Keynesian direction.

· Neoclassical macroeconomic theory.

· Monetarism.

· New classical economics.

· The theory of supply side economics.

· Institutional - sociological direction.

· Historical school.

Keynesianism- a direction of scientific analysis that puts the problems of macroeconomics at the center of attention.

John Maynard Keynes (1883-1946) - The birth of the Keynesian movement is associated with his name. In 1936, Keynes published the book “The General Theory of Employment, Interest and Money”; it made a genuine revolution in economic theory and provided answers to many questions that could not be obtained within the framework of microeconomic analysis. The engine of economic development, according to Keynes, is not supply, but demand, and it is demand that is the decisive factor in the development of production and supply. But the market mechanism cannot provide a sufficient level of aggregate demand, since the latter is determined by the expectations of entrepreneurs for the coming period.

These expectations help determine the amount of investment. Decisions to invest based on forecast demand depend on the relationship between the interest rate (the cost of cash needed to finance the investment) and the marginal efficiency of capital, which is determined by the entrepreneur. The ratio of these two indicators determines the volume of investment.

As for savings, they represent the remainder obtained after allocating a portion of income to consumer spending. Thus, as Keynes showed, in a modern market economy there are a number of factors that determine the persistence of a deficit in aggregate demand, and, consequently, insufficient production and underemployment. Therefore, to increase aggregate demand, Keynes recommended using appropriate fiscal and monetary policies of the state. Such policies should encourage private investment and consumer spending in a manner that promotes the fastest possible growth of national income.

Keynesians (neo-Keynesians) believe that the state, using incentive policy instruments, is able to achieve full employment. In addition, by reducing aggregate demand, it can alleviate inflationary pressures. To increase aggregate demand, it was proposed to expand government spending or reduce taxes, but to fight inflation, the exact opposite measures were required: reducing the purchasing power of the population by cutting government spending or raising taxes.

When Keynes's ideas were introduced into political practice, it turned out to be a real revolution in economic policy, which forced economists to declare the “Keynesian Revolution.”

Neoclassicalmacroeconomictheory

This scientific school was formed in the 70s as a result of applying the principles of microeconomic analysis to the field of macroeconomics. Neoclassicists put forward a very productive hypothesis of rational expectations, for which its author Robert Lucas, a professor at the University of Chicago, was awarded the Nobel Prize in Economics in 1995. According to this hypothesis, expectations are extremely important motives of behavior for everyone who makes economic decisions: companies, organizations and even individual families. Before this, such calculations were often based on an arbitrary or even statistical basis. Thus, the expected price level was considered as practically unchanged. The rational expectations hypothesis allowed us to constantly look ahead and relate these expectations to changing data.

From the point of view of neoclassics, even in the long term, any measures to stimulate economic growth turn out to be fully expected by the population and firms, which will adjust their behavior in such a way that economic indicators in real terms do not change. In particular, if the government increases government spending to create more jobs, taxpayers, aware that they will have to pay higher taxes in the future, will reduce their current spending by corresponding amounts in order to save money to pay future tax bills. At the same time, additional funds invested in the economy will increase in price and cause inflation.

Monetarism

It is a current of economic thought that places money at the center of macroeconomic policy, assigning it a decisive role in the cyclical movement of the national economy. Monetarist concepts served as the basis for monetary policy, used as the most important instrument of state regulation of the economy. The task of the state in the field of economic management comes down, from the point of view of modern monetarists, to control over the money supply, the issue of money in circulation and in reserves, achieving a balanced state budget, and establishing a high interest rate on loans.

The beginnings of the ideas of monetarism can be seen in economic teachings in ancient times and are clearly present among the mercantilists. Certain elements of the monetarist approach can also be traced in the works of English classics. Formulated by the Scottish philosopher David Hume (1711-1776), the quantity theory of money, which linked the price level with the volume of money supply in the country, received support, in particular, from D. Ricardo. But the modern version of the concept of monetarism is most clearly expressed in the works of the 1976 Nobel Prize winner in economics, Professor at the University of Chicago Milton Friedman (1912)

Friedman's achievements in the field of monetarism are in one way or another connected with the analysis of the theory of Keynes and his followers, who proceeded from the position of the insignificant influence of money on overall spending, consumption and prices and from the inability of a market economy to automatically ensure full employment and price stability.

Criticizing these provisions, Friedman, in a number of his works, including on the monetary history of the United States, showed that all major changes are associated primarily with “monetary impulses”, the emission of money. “The economy dances to the tune of the dollar, repeats its dance,” this is how Friedman figuratively formulated the main conclusion of his research.

The volume of money supply affects the amount of spending by households and firms: an increase in the amount of money in the economy leads to an increase in production, and after full capacity utilization - to an increase in prices and net inflation. Therefore, Friedman proposes to abandon the short-term monetary policy that the Keynesians insisted on, since changes in the money supply do not immediately affect economic development, but with some delay, and this can lead to unpredictable results. It should be replaced by a long-term policy designed to achieve a correspondence between the rate of growth of money in circulation and the rate of growth of the gross national product. This is the so-called Friedman monetary rule, compliance with which, according to the author, allows us to ensure price stability and stability of economic development.

Newclassicaleconomy

macroeconomics Keynesian monetarist

Representatives of the new classical economics (J. Moore, R. Lucas, T. Sargent, N. Wallace, R. Barro, etc.) tried to build a more complete theory by bringing a single microeconomic basis to the analysis of macroproblems. The focus of their attention was on economic agents capable of quickly adapting to changing economic conditions thanks to the rational use of the information received (the theory of rational expectations). Since each individual is able to properly adapt to a changing world, there is no need for government intervention in the economy.

Consistently defending neoclassical postulates, supporters of the theory of rational expectations are reviving the ideal market model.

The theory of supply-side economics gained popularity in the 70-80s. Its appearance was due to a serious crisis in government regulation of the market economy based on Keynesian recipes, which manifested itself with full force in the early 70s. Western economic thought moved on to an active search for new methods of improving the economy, which, as it became clear later, were based mainly on manetarian views and neoclassical approaches. In the very name of the theory - “supply economics” - the authors contrast it with Keynesianism, the focus of which is on regulating demand. From their point of view, the decisive factor in economic development is not demand, but supply. Among the most prominent representatives of the theory of supply-side economics are

R. Hall, G. Talok, Y. Browson, M. Rothbot, A. Laffer (USA). The latter was one of the main participants in putting the theory into practice, along with P. Roberts, Deputy and Assistant Secretary of the Treasury in the administration of US President R. Reagan.

One of the main postulates of the theory of supply-side economics was the weakening of government intervention in economic processes and the stimulation of private initiative and entrepreneurship. A special role was given to public finance: reducing taxes, reducing government spending, reducing the amount of money in circulation with the help of appropriate policies in the field of public credit.

In substantiating practical recommendations in the field of economic policy, the authors of the theory of supply-side economics assign a central place to the tax system. They argue that changes in the tax system can greatly increase potential output and therefore have a strong beneficial effect on the economy. One of their main arguments is that high income taxes reduce the incentive to work and consequently reduce the amount of labor supplied at each level of wages paid by firms.

Representatives of this school also believe that increasing taxes leads to higher costs and prices, which are ultimately passed on to consumers. Raising taxes generates impulses that create cost-push inflation. In addition, high taxes hinder the investment process, investment in new technologies, restructuring and improvement of production.

Based on these considerations, supporters of the new tax theory formulated two “moral” conclusions. The first conclusion was that, as the tax increases, commodity labor decreases, i.e. the desire of an individual to invest labor in areas of activity that are not subject to taxes increases to such an extent. The second conclusion established the relationship between taxes and savings: the tax burden reduces savings. The “moral” conclusions of supply-side economics clearly demonstrated that one of the main ways to ensure economic growth was to reduce taxes.

In their arguments about the harm of high tax policies, representatives of the theory of supply-side economics rely on the Laffer tax curve (Appendix 1), named after the American economist A. Laffer, who substantiated the dependence of budget revenues on tax rates. According to Laffer, an excessive increase in taxes on the income of firms discourages the latter from investing in technical re-equipment of production, slows down economic growth, which ultimately negatively affects state budget revenues. At tax rate T1 (optimal rate), maximum budget revenues are ensured. Further tax increases reduce incentives for work and entrepreneurship, and with 100/- taxation, government income is zero, since no one will work for free.

The provisions and conclusions of supply-side economics theorists became one of the important elements of the “reagonomics” policy in the United States in the 80s, during which there was a sharp reduction in income taxes. The increase in income caused by increased incentives to work, according to supporters of supply theory, should have more than compensated for the reduction in revenue due to a decrease in the tax rate. But in reality, everything turned out differently: overall tax revenues decreased and the US budget deficit increased significantly. However, this circumstance did not call into question the concept of the Laffer curve. In fact, according to many economists, the mistake was to assume that the tax rate in the American economy was above T1 before the tax cuts of the early 1980s.

InstitutionallyO- sociologicaldirection

Representatives of this direction are T. Veblen, J. Commons, W. Mitchell, J. Galbraith. This movement received its name from the title of J. Commons’ book “Institutional Economics,” published in 1924 in New York. However, the founder of the institutional-sociological direction is considered to be T. Veblen (1857-1929), Doctor of Philosophy from Yale University, who graduated in 1899. book "The Theory of the Leisure Class". Literally, the term “institutionalism” comes from the concepts of “institution” (custom, established order) and “institution” (order enshrined in the form of a law or institution).

Representatives of institutionalism approached the study of economic problems from non-traditional positions. Essentially, their method was a reaction to the method of the classical and neoclassical schools, the starting point of which was economic man (consisting of the smallest psychological elements combined into a single whole). Institutionalists proposed to study a person “not in isolation, but taking into account his environment.”

Historicalschool

Historical school - is a branch of economic analysis founded by German economists in the mid-19th century. (Roscher, Hidelbrand and Knies) and developed in the period after 1870. Schmoller, Wagner, Brentano, Bucher and others. These economists proposed studying economic phenomena taking into account place, time and environment. Institutionalists believe that the human environment consists mainly of institutions in the broadest sense of the word, i.e. from the totality of written and unwritten laws and guidelines adhered to by economic entities of any community, as well as from the totality of bodies, institutions, sociological and administrative groups that form the structure of this environment. The circle of institutions includes such concepts as the state, family, moral and legal norms, corporations, trade unions, various economic phenomena and mechanisms. This also includes public opinion, fashion, higher education, free enterprise, private property, credit, etc.

Zconclusion

Let's summarize. During the development of economic theory, its subject is defined in different ways. Mercantilists considered its subject to be activities related to foreign trade and the flow of money into the country. The classics of political economy considered it as the science of wealth. Representatives of the historical school defined it as the doctrine of the everyday activities of people. Marxists, studying social production, the dialectics of productive forces and production relations, came to the conclusion that political economy studies the laws governing the production, distribution, exchange and consumption of vital goods at various stages of development of human society, the economic laws of this development. Marginalists and neoclassicalists associated this activity with the use of rare (limited) resources in a market economy. Keynesians added to this the need to study and formulate the economic policy of the state; Institutionalists paid attention to the social aspects of this policy. Thus, economic theory allows us to identify the historical features of systems and understand the patterns of development of world civilization.

This work examined the main macroeconomic directions, theories and schools:

Keynesianism is a direction of scientific analysis that puts the problems of macroeconomics at the center of attention.

Institutional - sociological direction - the study of man “not in isolation, but taking into account his environment”

Monetarism is a current of economic thought that places money at the center of macroeconomic policy.

The theory of supply-side economics - ensuring economic recovery by reducing taxes.

New classical economics is the theory of providing a single microeconomic basis for the analysis of macroproblems.

Historical school - studies economic phenomena taking into account place, time and environment.

Differences and similarities in the main directions, and the influence of these macroeconomic schools, directions, theories on state policy were also identified.

WITHlist of literature

1. Agaapova T.A., Seregina S.F., Macroeconomics: Textbook. - M.: “Deloiservis”, 2008

2.Ivashkovsky S.N. Macroeconomics: Textbook. - M.: Delo, 2009

3. Macroeconomics. Theory and Russian practice: Textbook / edited by A.G. Gryaznova, N.N. Dumna. - M.: KNORUS, 2007

4.Economic theory / Ed. Doctor of Economics sciences, prof. V.D. Kamaeva.-M.: VLADOS, 2008

5.Economic theory: Textbook / Ed. Ed. acad. IN AND. Vidyapina, A.I. Dobrynina, G.P. Zhuravleva, L.S. Tarasevich. - M.:INFRA-M, 2008.

6. Economics: Textbook. - 3rd ed., revised. and additional / Ed. Doctor of Economics Science., Prof. A.S. Bulatova.-M.: JURIST, 2009

7.Vechkanov G.S., Vechkanov G.R. Macroeconomics. - St. Petersburg: Peter, 2007

8. Sokolinsky V.M., Korolkov V.E. Economic theory: Textbook. Manual.-M.: KNORUS, 2009

9.R..M. Nureyev course of Macroeconomics. Because. “Norma” Moscow 2008

Posted on Allbest.ru

Similar documents

The formation of the subject of economics in the ancient and Middle Ages. Interpretations of the subject of economic theory by schools of economists in the 17th – mid-19th centuries. Analysis of the views of the neoclassical school, Keynesian direction and institutional-sociological teaching.

course work, added 09/23/2016

Characteristics of the country's economy. Main macroeconomic indicators and their role. Indicators of reserves and indicators of economic conditions. Dynamics of main macroeconomic indicators in Russia. Methods for regulating macroeconomic indicators.

test, added 11/30/2008

Main macroeconomic indicators. Flow quantities. Indicators of reserves and indicators of economic conditions. Methods for calculating GDP. The role of macroeconomic indicators. Dynamics of main macroeconomic indicators in Russia.

course work, added 02/25/2003

The emergence of institutionalism: concepts, development and representatives of the theory. Institutionalism and other schools. Galbraith's institutional and sociological directions. The institutionalism of Galbraith's thought. Galbraith's technocratic ideas. "New Socialism".

course work, added 03/25/2008

Concept and types of benefits: material and intangible. Consideration of macroeconomic aggregate markets and their interactions. Features of the goods market in the system of aggregated markets. The commodity market of the Russian Federation: its problems and prospects.

course work, added 07/10/2015

Ensuring economic security as a guarantee of independence. System of macroeconomic indicators. Determination of general and threshold indicators of the country's economic security. Characteristics and indicators of living standards as an economic category.

abstract, added 05/28/2009

The concept of macroeconomic indicators and their types. Features and composition of the system of national accounts. State instruments for creating favorable conditions for economic growth. Comparison of macroeconomic indicators of the Russian Federation with other countries.

course work, added 11/03/2013

The essence and subjects of economic security. Macroeconomic indicators of economic security of the national economy. Main trends, factors and conditions of socio-economic development of the Russian Federation. Ways of Russia's integration into the world economy.

course work, added 05/20/2014

Analysis of macroeconomic indicators. Gross product. Aggregate demand. Aggregate offer. Employment and unemployment. Inflation. Methods for regulating macroeconomic indicators. Monetary policy. Fiscal policy.

course work, added 04/05/2004

The history of the origin and development of economic theory, its origins and main stages. The main scientific schools, directions and sections in modern economic theory. Subject, method and functions of economic theory. The problem of economic crime.

Some of the schools of macroeconomic theory can be distinguished: Keynesianism, neo-Keynesianism, neoclassical synthesis, monetarism, historical school of institutional-sociological direction.

The economic program of Keynesianism includes: a comprehensive increase in state budget expenditures; expansion of public works; absolute and relative increase in the amount of money in circulation; employment regulation, etc.

Some provisions of Keynesianism were revised and developed by representatives neo-Keynesianism(mainly in the analysis of technical and economic factors of economic growth) and Post-Keynesianism(achieving “effective demand” depends on a number of social measures).

Neo-Keynesianism is based on the ideas of J. Keynes about the need for constant, systematic influence of the state on economic processes in order to adapt economic relations to new conditions.

The main postulates of Keynesianism and neo-Keynesianism: non-self-regulation of a market economy, imperfect information, relative inflexibility of prices, non-identity of conditions for saving and investing.

The main difference is in the emphasis on the imperfections of different markets (for Keynes, the labor market, for his followers, the market for goods and services).

The neoclassical movement is based on the principle of state non-interference in the economy. The market mechanism is capable of regulating the economy itself, establishing a balance between supply and demand, between production and consumption. Neoclassicists advocate freedom of private enterprise. Neoclassical theory is the theory according to which unforeseen changes in the price level can give rise to macroeconomic instability in the short term; in the long term, the economy remains stable in the production of a national product, ensuring full employment of resources due to the flexibility of prices and wages.

The neoclassical direction examines the behavior of the so-called economic person (consumer, entrepreneur, employee), who seeks to maximize income and minimize costs. Neoclassical economists developed the theory of marginal utility and the theory of marginal productivity, the theory of general economic equilibrium, according to which the mechanism of free competition and market pricing ensures fair distribution of income and full use of economic resources; economic theory of welfare, the principles of which form the basis of the modern theory of public finance (P. Samuelson).

Neoclassical synthesis is a combination of Keynesian macrotheory and neoclassical microtheory in a single system. The essence of the concept of neoclassical synthesis is the combination of state and market regulation of the economy. The combination of state production and private entrepreneurship produces a mixed economy.

J. Hicks considers the Keynesian theoretical model as a special state of the economy when it is in the so-called liquidity trap, i.e. when the growth of the money supply ceases to influence the interest rate, and therefore on investment, and when the automatic restoration of economic equilibrium using the monetary-price mechanism provided for by the neoclassical system is disrupted. In Hicks's interpretation, Keynes's theory ceased to be a general theory and turned into a theory describing the conditions of economic depression, stagnation, economic crisis, i.e. theory of equilibrium under conditions of underemployment.

In the mid-50s there arose monetarism– an economic theory that attributes to the money supply in circulation the role of a determining factor in the process of formation of economic conditions and establishes a causal relationship between changes in the quantity of money and the size of the gross final product.

M. Friedman tried to prove that the market economy is characterized by special stability, making government intervention unnecessary.

Monetarism is one of the main trends of modern neoconservatism. The main feature of monetarism is that the main problems of a modern market economy are considered through the prism of money circulation. The methodology of monetarism attaches great importance to the division of the economy into the real and monetary sectors. The real sector, in which market forces operate exclusively, is identified with the production and sale of goods and services. It is characterized by the levels and dynamics of investment, employment, prices, etc. The monetary sector is the sphere of activity of the state. Materialists consider it necessary to make the monetary sector “neutral” in relation to the real one, to give the market mechanism favorable operating conditions, and to supply commodity markets with the required amount of money. One of the strongest points of monetarist theory is its detailed study of issues related to the organization of non-inflationary monetary policy.

Representatives of the institutional-sociological school consider the economy as a system in which relations between economic agents develop under the influence of both economic and sociological, political and socio-psychological factors. The object of their research is “institutions” (cooperatives, trade unions, the state), as well as various kinds of legal, moral, ethical and psychological phenomena (customs, norms of behavior, habits, instincts).

originality historical school of institutional-sociological direction is that the main object of study is real economic systems at different stages of their development. The greatest contribution to the field of macroeconomic theory is the study of cyclical fluctuations in the economy, the creation of the theory of long-wave cycles (N.D. Kondratiev).

Despite the differences, most economists recognize that the main objective of macroeconomic policy should be to increase the efficiency and social orientation of the functioning of a market economy.

3. Macroeconomic indicators: essence, indicators of flows and stocks, nominal and real.

Indicators of the performance of the economy as a whole at the macro level are usually called macroeconomic. They are determined on the basis of the system of national accounts and characterize the various stages of economic activity: production of goods and services, education and distribution of income, their final use.

All indicators used in macroeconomics are divided into three groups:

Flows (flow quantities);

Inventories (assets);

Indicators (indicators) of economic conditions.

The difference between them is as follows: flows reflect the movement of values from one entity to another in the process of economic activity, and stocks characterize the accumulation and use of values by entities.

For example, savings and investments are flow quantities, and the capital accumulated as a result is a stock. The budget deficit is a flow quantity, and public debt is a stock.

Indicators of economic conditions perform an important indicative function. These include: interest rate; norm (rate) of return on an asset; price level;

inflation; unemployment rate, etc.

Many macroeconomic indicators have nominal and real values. This must be taken into account when comparing them.

Since some indicators (for example, GDP/GNP) are measured in monetary terms, to compare them for different years you need to know whether there was inflation or deflation in a given period, i.e. it is necessary to distinguish between nominal and real values.

Nominal GDP/GNP reflects the physical volume of goods and services produced at current (i.e., current in a given year) prices. The value of nominal GDP/GNP is influenced by the dynamics of real production volume and changes in the price level.

Real GDP/GNP is nominal GDP/GNP adjusted for price changes or expressed in base year prices. The base year is taken to be the year from which the measurement begins or with which GDP/GNP is compared.

Some of the schools of macroeconomic theory can be distinguished: Keynesianism, neo-Keynesianism, neoclassical synthesis, monetarism, historical school of institutional-sociological direction.

Keynesianism – This is a theory of state regulation of the economy. It arose in the second half of the 30s of the twentieth century. Keynesianism explores practical ways to stabilize the economy, quantitative connections between macroeconomic quantities: national income, investment, employment, consumption, etc. The decisive sphere of reproduction is the market, and the main goals are maintaining “effective demand” and “full employment.” The economic program of Keynesianism includes: a comprehensive increase in state budget expenditures; expansion of public works; absolute and relative increase in the amount of money in circulation; regulation of employment, etc. Some provisions of Keynesianism were revised and developed by representatives neo-Keynesianism(mainly in the analysis of technical and economic factors of economic growth) and Post-Keynesianism(achieving “effective demand” depends on a number of social measures).

Neo-Keynesianism is based on the ideas of J. Keynes about the need for constant, systematic influence of the state on economic processes in order to adapt economic relations to new conditions.

The main difference is in the emphasis on the imperfections of different markets (for Keynes, the labor market, for his followers, the market for goods and services).

Neoclassical the direction of political economy arose in the 70s of the twentieth century. Its representatives: K. Menger, F. Wieser, E. Boehm-Bawerk (Austrian school); W. Jevons, L. Walras (mathematical school); A. Marshall, A. Pigou (Cambridge school); J.B. Clark (American school). The neoclassical movement is based on the principle of state non-interference in the economy. The market mechanism is capable of regulating the economy itself, establishing a balance between supply and demand, between production and consumption. Neoclassicists advocate freedom of private enterprise. Neoclassical theory is the theory according to which unforeseen changes in the price level can give rise to macroeconomic instability in the short term; in the long term, the economy remains stable in the production of a national product, ensuring full employment of resources due to the flexibility of prices and wages. The neoclassical direction examines the behavior of the so-called economic person (consumer, entrepreneur, employee), who seeks to maximize income and minimize costs. Neoclassical economists developed the theory of marginal utility and the theory of marginal productivity, the theory of general economic equilibrium, according to which the mechanism of free competition and market pricing ensures fair distribution of income and full use of economic resources; economic theory of welfare, the principles of which form the basis of the modern theory of public finance (P. Samuelson).

J. Hicks considers the Keynesian theoretical model as a special state of the economy when it is in the so-called liquidity trap, i.e. when the growth of the money supply ceases to influence the rate of interest, and therefore on investment, and when the automatic restoration of economic equilibrium with the help of the monetary-price mechanism provided for by the neoclassical system is disrupted. In Hicks’s interpretation, Keynes’s theory ceased to be a general theory and turned into a theory that describes the conditions of economic depression, stagnation, economic crisis, i.e. theory of equilibrium under conditions of underemployment.

In the mid-50s there arose monetarism- an economic theory that attributes the role of the determining factor in the process of formation of economic conditions to the money supply in circulation and establishes a causal relationship between changes in the quantity of money and the size of the gross final product. M. Friedman tried to prove that the market economy is characterized by special stability, making government intervention unnecessary. Monetarism is one of the main trends of modern neoconservatism. The main feature of monetarism is that the main problems of the modern market economy are considered through the prism of money circulation. The methodology of monetarism attaches great importance to the division of the economy into the real and monetary sectors. The real sector, in which market forces operate exclusively, is identified with the production and sale of goods and services. It is characterized by the levels and dynamics of investment, employment, prices, etc. The monetary sector is the sphere of activity of the state. Materialists consider it necessary to make the monetary sector “neutral” in relation to the real one, to provide the market mechanism with favorable operating conditions, and to supply commodity markets with the required amount of money. One of the strongest points of monetarist theory is its detailed study of issues related to the organization of non-inflationary monetary policy.

The basis institutional-sociological direction constitutes an expanded interpretation of the subject of political economy. This trend is characterized by increased sociologization of the analysis of economic phenomena (F. Perroux, J. Fourastier, G. Myrdal, J. Galbraith). Distinctive features of the institutional-sociological direction are: the desire to implement the idea of social control over production through planning; an attempt to present recommendations aimed at overcoming the economic backwardness and poverty inherited by developing countries from colonism; attention to social problems of society and proposal of practical measures to solve them. Representatives of the institutional-sociological school consider the economy as a system in which relations between economic agents develop under the influence of both economic and sociological, political and socio-psychological factors. The object of their research is “institutions” (cooperatives, trade unions, the state), as well as various kinds of legal, moral, ethical and psychological phenomena (customs, norms of behavior, habits, instincts). originality historical school of institutional-sociological direction is that the main object of study is real economic systems at different stages of their development. The greatest contribution to the field of macroeconomic theory is the study of cyclical fluctuations in the economy, the creation of the theory of long-wave cycles (N.D. Kondratiev).

Despite the differences, most economists recognize that the main objective of macroeconomic policy should be to increase the efficiency and social orientation of the functioning of a market economy.

In the goods market (Fig. 3.(c)), the initial equilibrium is established at the point of intersection of the aggregate supply curve AS and aggregate demand AD1, which corresponds to the equilibrium price level P1 and the equilibrium production volume at the level of potential output - Y*. Since all markets are connected to each other, a decrease in the nominal wage rate in the labor market (which leads to a decrease in income) and an increase in savings in the capital market cause a decrease in consumer spending, and therefore aggregate demand. The AD1 curve shifts to the left to AD2. At the previous price level P1, firms cannot sell all of their products, but only part of it, equal to Y2. However, since firms are rational economic agents, under conditions of perfect competition they will prefer to sell the entire volume of production produced, even at lower prices. As a result, the price level will decrease to P2, and the entire volume of production produced will be sold, i.e. equilibrium will again be established at the level of potential output (Y*).

The markets balanced themselves due to price flexibility, and equilibrium in each market was established at the level of full employment of resources. Only the nominal indicators changed, while the real ones remained unchanged. Thus, in the classical model, nominal indicators are flexible, and real indicators are rigid. This applies to both the real output volume (still equal to the potential output volume) and the real income of each economic agent. The fact is that prices in all markets change in proportion to each other, so the ratio W1/P1 = W2/P2, and the ratio of nominal wages to the general price level is nothing more than real wages. Consequently, despite the fall in nominal income, real income in the labor market remains unchanged. Real income to savers (the real interest rate) also remained unchanged because the nominal interest rate fell in the same proportion as prices. The real income of entrepreneurs (sales revenue and profits) did not decrease, despite the fall in the price level, since costs (labor costs, i.e. the nominal wage rate) decreased to the same extent. At the same time, the fall in aggregate demand will not lead to a fall in production, since the decline in consumer demand (as a result of a fall in nominal incomes in the labor market and an increase in the amount of savings in the capital market) will be compensated by an increase in investment demand (as a result of a fall in the interest rate in the capital market). Thus, equilibrium was established not only in each of the markets, but there was also a mutual balancing of all markets with each other, and, consequently, in the economy as a whole. From the provisions of the classical model it followed that protracted crises in the economy are impossible, and only temporary imbalances can occur, which are gradually eliminated by themselves as a result of the action of the market mechanism - through the mechanism of price changes.

But at the end of 1929, a crisis erupted in the United States that engulfed the leading countries of the world, lasting until 1933 and called the Great Crash or Great Depression. This crisis was not just another economic crisis. This crisis showed the inconsistency of the provisions and conclusions of the classical macroeconomic model, and above all the idea of a self-regulating economic system. Firstly, the Great Depression, which lasted four long years, could not be interpreted as a temporary imbalance, as a temporary failure in the mechanism of automatic market self-regulation. Secondly, what kind of limited resources, as a central economic problem, could be discussed in conditions when, for example, in the USA the unemployment rate was 25%, i.e. one in four was unemployed (a person who wanted to work and was looking for work, but could not find it).

But it should be borne in mind that the inconsistency of the provisions of the classical school is not that its representatives, in principle, came to the wrong conclusions, but that the main provisions of the classical model were developed in the 19th century and reflected the economic situation of that time, i.e. era of perfect competition. But these provisions and conclusions did not correspond to the economy of the first third of the twentieth century, which was characterized by imperfect competition. Keynes refuted the basic premises and conclusions of the classical school by building his own macroeconomic model.

The main provisions of the Keynesian macroeconomic model:

1. The real sector and the monetary sector are closely 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 indicators. The money market becomes a macroeconomic market, a part (segment) of the financial market along with the securities market (borrowed funds).

2. All markets have imperfect competition.

3. Since there is imperfect competition in all markets, prices are inflexible, they are rigid (rigid) or, in Keynes’ terminology, sticky, i.e. 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:

a contract system operates: a 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;

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);

the state sets the minimum wage, and entrepreneurs do not have the right to hire workers at a rate lower than the minimum. Therefore, on the labor market graph (Fig. 3.(a) - see the article "Classical Model"), when the demand for labor decreases (the curve LD1 shifts to LD2), the price of labor (nominal wage rate) will not decrease to W2, but will remain ( “stick”) at level W1.

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, being price-makers (and not price-takers as in conditions of perfect competition). Therefore, on the graph of the commodity market (Fig. 3.(c)), when the demand for goods decreases, the price level will not decrease to P2, but will remain at the level of P1.

The interest rate, according to Keynes, is formed not in the market for borrowed funds 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 (in essence, we are talking about the expected internal rate of return on investment), 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. (So, if the investor’s estimate of the marginal efficiency of capital is 100%, then a loan will be taken at an interest rate of 90%, and if this estimate is 9%, then he will not take a loan at an interest rate of 10%). And the factor that determines the amount of savings is also not the interest rate, but the amount of disposable income (Remember that RD = C + S). If a person’s disposable income is small and barely enough for current expenses (C), then the person will not be able to save even at a very high interest rate. (To save, you must at least have something to save.) 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 a sum of 10 thousand dollars for retirement, he must save 10 thousand dollars annually at an interest rate of 10%, and only 5 thousand dollars at an interest rate of 20%.

Graphically, the relationship between investment and savings in the Keynesian model is presented in Fig. 3.2 Since savings depend on the interest rate, their graph is a vertical curve, and investment weakly depends on the interest rate, so they can be depicted by a curve with a slight negative slope. If saving increases to S1, then the equilibrium interest rate cannot be determined, since the investment curve I and the new saving curve S2 do not have an intersection point in the first quadrant. This means that the equilibrium interest rate (Re) should be sought elsewhere, namely in the money market (according to the ratio of the demand for money MD and the supply of money MS) (Fig. 3.3)

Fig. 3.2 Investments and savings in the Keynesian model

Fig. 3.3.Money market

3. Since prices are rigid in all markets, market equilibrium is not established at the level of full employment of resources. Thus, in the labor market (Fig. 3.(a)), the nominal wage rate is fixed at the level of W1, at which firms will demand a number of workers equal to L2. The difference between LF and L2 is unemployed. 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.

On the commodity market, prices also stick at a certain level (P1) (Fig. 3.(c)). A decrease in aggregate demand as a result of a decrease in total income due to the presence of unemployed (note that unemployment benefits were not paid), and therefore a decrease in consumer spending leads to the inability to sell all produced products (Y2< Y*), порождая рецессию (спад производства). Спад в экономике влияет на настроение инвесторов, на их ожидания относительно будущей внутренней отдачи от инвестиций, обусловливает пессимизм в их настроении, что ведет к снижению инвестиционных расходов. Совокупный спрос падает еще больше.

4. Since private sector expenditures (consumer expenditures of households and investment expenditures of firms) are not able to provide the amount of aggregate demand corresponding to the potential volume of output, i.e. the amount of aggregate demand at which the volume of output produced under full employment of resources could be consumed. 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 (state activism).

5. 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 “demand-side” model, i.e. studying economics from the perspective of aggregate demand.

6. Since the stabilization policy of the state, i.e. policy to regulate aggregate demand affects the economy in the short term, then the Keynesian model is a model that describes the behavior of the economy in the short term (“short-run” model). Keynes did not consider it necessary to look far into the future, to study the behavior of the economy in the long run, wittily remarking: “In the long run we are all dead.”

The difference between the views of representatives of the neoclassical school and the ideas of representatives of the “classical school” is that they use the main provisions of the classical model in relation to modern economic conditions, analyzing the economy from the side of aggregate supply, but in the short term. Representatives of the neo-Keynesian school also take into account the inflationary nature of the modern economy in their concepts. Therefore, in modern macroeconomic theory, it is rather not about contrasting the neoclassical and neo-Keynesian approaches, but about the development of a theoretical concept that would most adequately reflect and theoretically explain modern economic processes.

Conclusion

Keynesian methods of regulating the economy by influencing aggregate demand (primarily through fiscal policy measures), 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 (since this further provoked inflation), but the problem of aggregate supply. The “Keynesian revolution” is being replaced by a “neoclassical counter-revolution”. The main trends of the neoclassical direction in economic theory are: 1) monetarism (“monetarist theory”); 2) the theory of “supply-side economics”; 3) the theory of rational expectations (“rational expectations theory”). The main focus of neoclassical concepts is on the analysis of the microeconomic foundations of macroeconomics.

LIST OF SOURCES USED:

Agapova, I.I. History of economic doctrines / I.I. Agapova: course of lectures. – Moscow: Yurist, 2001. – 285 p.

Bartenev, S. A. Economic theories and schools (history and modernity): a course of lectures / S. A. Bartenev - Moscow: BEK Publishing House, 1996.

Borisov, E.F. “Economic theory” / E.F. Borisov - Moscow: Yurist, 2000. - 95 p.

Zhid Sh., Rist Sh. History of economic doctrines / Sh. Zhid, Sh. Rist; lane Y. I. Kuzminova. - Moscow: Economics, 1995. – 93-112 p.

Keynes J.M. General theory of employment, interest and money / trans. M. N. Kuzminova - Moscow, “Business”, 1978.

Myburgh, E.M. Introduction to the history of economic thought. From prophets to professors / E. M. Maiburg. - Moscow: Case; Vita-Press, 1996. - 544 p.

Matveeva, T.Yu. "Macroeconomics: A course of lectures for economists": textbook. allowance / T.Yu Matveeva; State University – Higher School of Economics. , 2001.

World economy. - Access mode: http://www.ereport.ru/articles/macro/macro07.htm. - Access date: 07.11.2010

Negeshi, T. History of economic theory / T. Negeshi; pres. L.L. Lyubimov and B.S. Avtonomova. – Moscow: Aspect - press, 1995. – 462 p.

IE (Institutional Economics) Society. - Access mode: http:// ie. boom. ru/ Rozmainsky/ Ch6. htm. - Access date: 02.11.2010

Samuelson, P. Economics / P. Samuelson - Moscow: NPO "Algon" VNISI, 1992. - 33 p.

Yartseva, N.V. Modern concepts of economic thought: textbook. allowance / N.V. Yartseva - Barnaul: Alt Publishing House. University, 2003.

Annex 1

Comparative characteristics of the main macroeconomic schools

Concepts	Main macroeconomic schools
Concepts	Neoclassicism	Keynesianism	Monetarism (post-Keynesianism)	New macroeconomics
Competition	Perfect competition is inherent in the economy	Imperfect (the reason is the nature of markets)	Perfect competition must be ensured	Perfect competition
	Absolutely flexible		We must strive for absolute price flexibility	Absolutely flexible
Economic behavior	Rational	Traditional, limited rationality	Holistically rational, adaptive expectations	Holistically rational, rational expectations
	Neutral in the long term	Not neutral, have independent value, a form of wealth	Neutral in the long term, not in the short term	Absolutely neutral in any period
Economic regulation	Laissez faire	Government intervention needed	State intervention is a necessary evil	Can be done without intervention under certain conditions
AD-AS
Resource Occupancy		Incomplete
Substitutability of factors of production	Interchangeable		Interchangeable	Interchangeable

The question of the goals and methods of implementing macroeconomic policy is one of the most controversial in economic theory. It is on this issue that the differences between different schools of macroeconomic theories are most clearly visible. The range of these differences is very wide: from almost complete denial of the need for state intervention in the functioning of the national economy to recognition of the leading role of the state in solving all macroeconomic problems. Let's consider each point of view in more detail.

Neoclassical direction

In the process of development of macroeconomics, starting from the middle of the last century, two main schools emerged: neoclassical and Keynesian. Before the work of J.M. Keynes, the “general theory of employment, interest and money” (1936), the macroeconomic approach in its modern sense was not used at all. The neoclassical point of view prevailed, according to which a perfectly competitive market naturally leads the economy to the efficient allocation of resources. The role of the state was limited to protecting external borders and private property rights.

It should be noted that the neoclassical school is the heir to the classics of economic theory - A. Smith, D. Ricardo, J.S. Millat, J.-B. Say and other economists who believed that the market mechanism best solves the problem of efficient allocation of resources. A. Smith's famous metaphor - the “invisible hand” of the market - has become a scientific term used by all economists, both in micro- and macroeconomics. Representatives of the neoclassical movement - A. Marshall, A. Pigou, I. Fisher - based their conclusions on the same conceptual premises that are characteristic of the theory of the classics: the rationality of individual behavior, perfect competition, price flexibility. The analysis of limiting values began to play a special role in the works of neoclassics. First of all, this is the marginal utility and marginal productivity of factors of production. Modern representatives of the neoclassical school are a group of economists who have a common view of the market as a self-regulating system for which government intervention can do more harm than good.

Keynesianism

The founder of macroeconomic theory was the British economist John Maynard Keynes, who developed a scientific concept that explains the occurrence of market fluctuations in the economy, and also proposed a special government action program to overcome depression and smooth the economic cycle. Keynes's main theoretical ideas were outlined in his work "The General Theory of Employment, Interest and Money", published in 1936. Despite the fact that a number of provisions and conclusions of this work are currently criticized, it, according to most modern scientists, is the most significant economic work of the 20th century. The central links of Keynes's theory were the following provisions:

Rejection of the classical doctrine of smooth self-regulation of a market economy. Keynes argued that a market economy does not have this ability and, therefore, does not guarantee full employment, price stability and high levels of output. This logically followed the conclusion about the need to carry out a stabilization macroeconomic policy of the state.

Recognition of the determining role of demand. Substantiating this thesis, Keynes criticized one of the fundamental postulates of classical economic doctrine - Say's law, which states that supply creates demand.

- “understanding the national economy as an integral system that has the property of emergence, that is, the irreducibility of the characteristic features of its functioning to the properties of its constituent elements. An example of such irreducibility is the “paradox of savings” justified by Keynes, according to which for an entire nation (as opposed to an individual), an increase in savings does not lead to an increase in wealth.”