The policy of cheap and expensive money. Goals and tools of monetary regulation of the economy

Returning to the Central Bank, we note that monetary regulation is effective only in conjunction with other types of state regulation of the economy. After all, the national economy can be upset not only by unprofessional actions of the Central Bank, but also by miscalculations and mistakes on the part of the government in redistributing GDP in the form of taxes and budget expenditures. Therefore, the ruling political elites have a great responsibility for the professional and well-coordinated activities of the Central Bank and the government. The decisions and actions of the Central Bank must be consistent with the decisions and actions of the government, but at the same time, the activities of the Central Bank are protected by law from the voluntarism of officials. In other words, monetary policy should be balanced and at the same time flexible, adequate to the real economic situation.

An objective factor that necessitates a flexible monetary policy is the cyclical nature of the development of a market economy. Of course, during periods of economic recessions and depressions, the economy can manage less money than during periods of expansion when employment and production of goods increase.

The main tasks of the Central Bank as a regulator is to ensure 1) the stability of the national currency and 2) the growth of real GDP and full employment (Fig. 18.1).

Rice. 18.1.

The task of the monetary policy of the Central Bank is achieved mainly by regulating the amount of money in circulation. Such regulation of the money supply is carried out with the help of certain tools.

The main instruments of monetary regulation of the economy:

Open market operations;

Changes in the discount rate;

Reservation rate changes.

Open market operations- this is the purchase and sale by the central bank of government securities, mainly bonds (debt obligations of the state treasury).

By buying government securities from commercial banks, the central bank thereby gives the latter additional funds and opportunities for greater lending to customers. When the central bank does the opposite, that is, it sells government securities, then in this way it reduces the amount of money in the economy and restrains the credit expansion of commercial banks, and, consequently, reduces investment and consumer demand from firms and households.

In countries with developed market economies, open market operations are the most common and flexible instrument of monetary regulation. This is due, first of all, to the high confidence in the state, its obligations, as well as the financial power of the state, the presence of a developed infrastructure of the stock market.

accounting, or discount rate is the interest rate at which the central bank lends to commercial banks.

The term "rate" or "rate" arose long ago, back when the main form of bank lending was the accounting (and rediscounting) of bills, that is, loans were provided on the security of bills at a discount from their value (at a discount). Now the Central Bank usually lends them against the security of government bonds and other valuables (banking metals, foreign currency funds). Such loans are provided, as a rule, to large banks facing the threat of bankruptcy and lack of liquidity.

By changing the discount rate, the Central Bank in a certain way affects the money supply in the economy. By raising it, he "knocks down" the demand for credit resources and thereby reduces the purchasing power of firms and households; by reducing it, on the contrary, it contributes to an increase in demand for credit resources, and, accordingly, the economic activity of economic entities.

However, in economically developed countries, the discount rate is a less popular instrument of regulatory policy, since it is difficult for the Central Bank to predict the amount of loans that commercial banks will take from it. Moreover, local commercial banks rely more on working with clients, on creating more attractive conditions for keeping private savings, corporate funds, pension and insurance funds, and the like.

Reservation rate is a requirement of the Central Bank for commercial banks to reserve a certain percentage of their deposits.

By changing the reserve ratio, the Central Bank also adjusts the amount of money in the economy accordingly. An increase in this norm leads to a reduction in the excess reserves of commercial banks and the volume of lending to customers. In the case of a decrease in this norm, the lending activity of commercial banks increases.

However, in banking practice, changes in the official reserve ratio are rarely applied. This is due to the fact that this tool is the most rigid and potent. Thus, an increase in the reserve ratio may adversely affect the financial condition of commercial banks and the entire economy. Indeed, in this case, banks are forced to urgently sell part of their securities, buy their own bonds out of circulation ahead of schedule, and the like.

So, summing up the consideration of the tools of monetary regulation, we once again note the following: among the three main instruments (the Central Bank uses operations on the open securities market daily and in large volumes; it changes the discount rate periodically and as an additional means to the previous one; changes in the reserve ratio commercial bank regulator rarely succeeds and is extremely cautious.

Depending on the goals to be achieved, two models of the monetary policy of the Central Bank are practiced: the policy of "cheap money" the policy of "expensive money" (fig.18.2).

Rice. 18.2.

The "cheap money" policy is an expansionary monetary policy that is implemented by increasing the amount of money in the economy and is aimed at stimulating economic growth and employment.

An increase in the money supply in the economy is achieved by: a) the purchase by the central bank of government bonds from commercial banks; b) lowering the discount rate of interest when lending to commercial banks; c) decrease in the norm of bank reserves. As a result of these measures, the credit potential of commercial banks increases, their loans become cheaper, and, consequently, the demand for them grows, which, in turn, stimulates the growth of production and employment.

The policy of "dear money" is a restrictive (from lat. - restrictions) monetary policy, which is carried out by reducing the money supply in circulation and is aimed at curbing inflation.

Reducing the money supply in the economy is achieved by: a) the sale of government securities by the central bank on the open market; b) an increase in the discount rate; c) an increase in the reserve ratio. These measures of the Central Bank provide for a decrease in the credit capacity of commercial banks, make their loans more expensive, which leads to a reduction in demand, and, consequently, curbing the growth of prices in the country.

Introduction ……………………………………………………………………… 3-4

1.1. What is meant by money ……………………………………………4-

1.2. The main functions of money …………………………………………………

1.3. Politics of "expensive" and "cheap" money

2.1. Practical part

Conclusion

Bibliography

Introduction

Monetary policy occupies an important place in the life of society, aimed only at ensuring economic turnover with sufficient and necessary money supply. In fact, we can say that monetary policy looks like "swimming against the wind." Its main purpose is to stimulate business activity in the conditions of business activity and to suppress it when the economic situation overheats. Monetary policy is designed to ensure economic growth in the economy.

Monetary policy, in fact, by changing the money supply in the country, affects the aggregate demand in the country. Therefore, it is important to trace the mechanism of the impact of monetary policy on the output of the product in the country.

However, for countries with economies in transition (to which our country belongs), the regulation of the economy through monetary policy acquires a special meaning. Such a policy creates the necessary conditions and prerequisites for the implementation of the strategic goal of any transitional economy - a reproductive structure, an adequately formed social model.

The main topic of this work is commodity-money relations, which include consideration of the issues "The policy of expensive and cheap money, the mechanism of its impact on the economy."

Money is an essential element of our daily life. Money is the most important attribute of the economy. The stability of the country's economic development largely depends on how the monetary system functions. The study of the nature and main functions of money, the process of evolution of the monetary system, the organization and development of money circulation, the causes, consequences and methods of combating inflation is necessary to understand the functioning of the entire financial system.

In the modern economy, money is the regulator of economic activity, increasing or decreasing their amount in circulation, the state thereby solves the tasks. Without money, the life of a modern person is unthinkable, all the aspirations of people in the economic sphere are aimed at obtaining as many of them as possible, while we receive satisfaction from their use, exchanging them for other benefits, giving them away.

During the study of the problem, the following tasks were set:

1. Study what is meant by money.

2. Consider the mechanism of the impact of monetary policy on the country's economy.

Chapter 1.

1.1. What is meant by money.

Money is the equivalent of wages artificially invented by mankind, a unit for measuring commodity-money turnover. Money appeared as a replacement for the barter exchange of natural products. In different countries, money has a different name and different quotes. Money is issued, as a rule, in paper or metal form.

The entire history of the development of the economy is at the same time the history of the development of commodity production and commodity consumption, where the links between producers and consumers are carried out through the exchange of one commodity for another. Money acts as an intermediary in such an exchange.

Money is an integral component of commodity production and develops along with it. The evolution of money, their history are an integral part of the evolution and history of commodity production, or market economy.

Money exists and acts where economic life is carried out through the movement of goods.

1.2.Basic functions of money

In the modern economy, money performs five functions:

1. Measure of value (consists in the fact that in money we express the value of all other goods);

2. Means of circulation (with the help of money we exchange one commodity for another, the exchange of goods performed with the help of money is called commodity circulation);

3. Means of accumulation;

4. Means of payment, settlement (money performs this function when payment for goods and services is not made immediately - lending and wages);

Money as a measure of value. This function of money plays a crucial role in the organization and operation of the entire social economy, since it is thanks to a single measure of measurement that we are able to quantitatively compare the relative values of various goods and services. Everyone knows that in order to measure distance, weight or volume, you need to choose the appropriate unit or scale - meter, kilogram or liter. In the economy, they do exactly the same: the governments of different countries set their own monetary unit or price scale. The unit chosen measures the relative value of all goods and services sold. Such a common unit greatly facilitates the quantitative comparison of goods and the establishment of equivalent ratios between them.

Money as a medium of exchange. Under money circulation refers to the process of continuous movement of money in cash and non-cash forms, serving the processes of circulation of goods and services, the movement of capital. The circulation of banknotes implies their constant transition from one legal entity or individual to another.

To show more clearly the advantage of money circulation over the exchange of one commodity for another (what is called bartering), it is enough to note that in order to barter you must find a buyer for your commodity, and that this buyer has the commodity you need. For example, if you have grain and want to buy vegetables, then you must find a grower who needs grain. Therefore, the act of selling and buying is not separated in time here. They occur simultaneously, and this is inevitably associated with inconvenience, not to mention certain distribution costs associated with the loss of time and money.

Money circulation eliminates the disadvantages of barter exchange:

1) The act of selling and buying for money can be separated from each other. You can sell your product, get money for it, and then buy the product you need for them at a convenient time and place.

2) Money makes it possible to carry out an incomparably greater choice of goods and partners in trade transactions.

3) Their most important advantage is that they act as a universal equivalent of value, and that is why they have a universal purchasing power, and therefore serve as a universal medium of exchange.

Money as a store of value. Money serves as a means of accumulation because, after the sale of goods and services, they give their owner the opportunity to purchase goods in the future. In other words, money provides its owner with future purchasing power. Other things can serve as a means of accumulation, for example, jewelry, real estate, works of art, not to mention stocks and bonds. In the economic literature, there is a common term for their designation - assets: they have a certain liquidity, i.e. ability to act as a means of payment.

Unlike other assets, money has the highest liquidity, since it functions as a measure of value and thus retains its nominal value. Other assets have less liquidity. So, in order to use real estate as a means of payment, you must first find a buyer, incur certain costs of sale, and besides, real estate prices can change depending on the place, season, and also over time. Government securities are closest to money in terms of liquidity. They can easily be sold on the financial market, and their value fluctuates very little. Stocks and bonds issued by enterprises, firms and corporations have less liquidity.

world money. Foreign trade relations, international loans, the provision of services to an external partner caused the emergence of world money. They function as a universal means of payment, a universal means of purchase, and a universal materialization of social wealth.

During the period of the gold standard, the practice of final balancing of the balance of payments with the help of gold prevailed in the world, although in international circulation mainly credit instruments of circulation were used.

In the twentieth century, the intensification of world relations expanded the introduction of credit instruments of circulation (bills, checks, etc.) into international circulation. However, the peculiarity of the use of credit instruments of circulation in international circulation lies in the fact that they do not play the role of the final means of payment, such as gold.

Introduction ……………………………………………………………………… 3-4

1.1. What is meant by money ……………………………………………4-

1.2. The main functions of money …………………………………………………

1.3. Politics of "expensive" and "cheap" money

2.1. Practical part

Conclusion

Bibliography

Introduction

The main topic of this work is commodity-money relations, which include consideration of the issues "The policy of expensive and cheap money, the mechanism of its impact on the economy."

During the study of the problem, the following tasks were set:

1. Study what is meant by money.

2. Consider the mechanism of the impact of monetary policy on the country's economy.

Chapter 1.

1.1. What is meant by money.

Money exists and acts where economic life is carried out through the movement of goods.

1.2.Basic functions of money

In the modern economy, money performs five functions:

1. Measure of value (consists in the fact that in money we express the value of all other goods);

2. Means of circulation (with the help of money we exchange one commodity for another, the exchange of goods performed with the help of money is called commodity circulation);

3. Means of accumulation;

4. Means of payment, settlement (money performs this function when payment for goods and services is not made immediately - lending and wages);

Money circulation eliminates the disadvantages of barter exchange:

1) The act of selling and buying for money can be separated from each other. You can sell your product, get money for it, and then buy the product you need for them at a convenient time and place.

2) Money makes it possible to carry out an incomparably greater choice of goods and partners in trade transactions.

3) Their most important advantage is that they act as a universal equivalent of value, and that is why they have a universal purchasing power, and therefore serve as a universal medium of exchange.

Therefore, in order to reduce fluctuations in exchange rates and streamline the functioning of the leading world currencies (dollar, pound sterling) as world money, international agreements and currency blocks were used. Examples are - Special Drawing Rights (SDR) of the International Monetary Fund, ECU - the monetary unit of the member countries of the European Monetary System.

All five functions of money represent a manifestation of the single essence of money as the universal equivalent of goods and services. They are in close relationship and unity. Logically, historically, each subsequent function presupposes a certain development of the previous ones.

Due to the above functions, money plays a key role in the development of production. The social role of money in the economic system is that they are a link between independent commodity producers.

1.3. The policy of "expensive" and "cheap" money.

In modern conditions, the implementation of the policy of "expensive" or "cheap" money in the classical form leads rather to negative consequences. Obviously, taking into account the current structure of the Russian economy, structural problems, as well as the deterioration of the global environment, the use of purely market mechanisms is inevitably accompanied by costs, losses and new threats. The choice of one of the directions of the interest rate policy is complicated by comparisons of "pro" and "contra" in its implementation - in fact, one of the available "bad" decisions is being chosen. Improvement of solutions is possible only through administrative regulation (as far as the distribution of state savings is concerned) and active work of the state at the micro level with business representatives.

Thus, it is necessary to search for some combined option: either a tight monetary policy together with selective subsidization of interest rates, tax breaks, direct state financing; or large-scale support for the real sector, accompanied by increased currency regulation and control over the use of public funds.

The dear money policy aims to reduce the money supply. It is usually held during a period of rising inflation. Credit becomes expensive and difficult to obtain.

The reduction in the money supply is facilitated by the sale of securities by the central bank on the open market, an increase in primary requirements and the discount rate.

The policy of cheap money is carried out when there is an underutilization of production capacities and unemployment in the economy. Pursuing a policy of cheap money is most characteristic of periods of recession. Credit in this case becomes cheap, easily accessible. An increase in the money supply is facilitated by the purchase of securities by the central bank on the open market, a decrease in the reserve ratio, and a decrease in the discount rate. An increase in the money supply causes an increase in investment and an increase in business activity, but can intensify inflationary processes.

The policy of the central bank has the most direct impact on the state of finance in the country. The role of the central bank in preventing crises in the activities of commercial banks is especially great.

The equation for the quantity theory of money is

M*V= P*Y (1) ,

Where M is the amount of money,

V is the velocity of money circulation,

P - price level,

Y - physical volume of GNP (number of goods and services).

Money circulation is the circulation of money as a means of circulation and payment, as well as the movement of funds as an integral part of commodity-money, financial-credit, currency, and settlement operations.

Monetary policy has a number of features, and its implementation in reality faces a number of difficulties, which primarily include:

1. Cyclical asymmetry, that is, if a policy of “expensive money” is pursued, then a point will be reached at which banks will be forced to limit the volume of loans, which means a restriction in the money supply. While the "cheap money policy" can provide commercial banks with the necessary reserves, that is, the ability to make loans, it cannot guarantee that the latter will actually make loans and the money supply will increase. The population can also frustrate the intentions of the Central Bank by buying bonds from the population, and the population can use existing loans.

By limiting the volume and raising interest rates on loans provided, i.e. implementing a policy of "expensive money", the central bank forces commercial banks to limit the volume of their operations, as a result of which new means of payment are created. And vice versa, by pursuing a liberal policy of "cheap money", it allows banks to expand lending and thereby accelerate the issuance of means of payment.

This cyclical asymmetry is a serious hindrance to monetary policy only during a deep depression. In normal periods, an increase in excess reserves leads to the provision of additional credit and thus to an increase in the money supply.

2. Change in the velocity of money circulation. Thus, from the point of view of money circulation, total expenditures can be considered as the money supply multiplied by the velocity of money circulation. In this regard, some Keynesians believe that the velocity of money tends to change in the opposite direction to the money supply, which eliminates changes in the latter caused by monetary policy. In other words, during inflation, when the money supply is limited by the policy of the Central Bank, the velocity of money circulation tends to increase. Conversely, when policy measures are taken to increase the money supply during a downturn, the velocity of circulation is likely to fall.

3. The impact of investment, that is, the action of monetary policy, can be complicated and even temporarily slowed down as a result of unfavorable changes in the location of the investment demand curve. For example, a credit-tightening policy aimed at raising interest rates may have little effect on investment spending if, at the same time, demand for investment rises due to business optimism, technological progress, or the expectation of higher capital prices in the future. In such an environment, to effectively reduce aggregate spending, monetary policy must raise interest rates extremely high. Conversely, a severe downturn could undermine business confidence, and thereby nullify all cheap money policies.

Thus, the monetary policy pursued by the central bank, as an instrument of state regulation of the economy, has its strengths and weaknesses. The latter, for example, include the dilemma of the goals of credit policy, which arises from the impossibility for governing institutions to stabilize both the money supply and the interest rate at the same time. The foregoing allows us to conclude that the correct use of these levers to improve the economic situation in the country is realistic only with accurate planning and forecasting of the impact of the credit policy of the country's main bank on domestic business activity.

Interest rate management is a relatively new instrument of monetary policy. In recent history, the Russian monetary authorities pursued an active interest rate policy only in 2002–2003, rapidly expanding the government borrowing market. Then, despite the increased in modern conditions, the implementation of the policy of "expensive" or "cheap" money in the classical form leads rather to negative consequences.

The savings of the population and declining inflation all ended in a systemic financial crisis. In modern conditions, the implementation of the policy of "expensive" or "cheap" money in the classical form leads rather to negative consequences.

In the current century, the monetary authorities have actually abstained from conducting interest rate policy, concentrating in the most liberal style on the fight against excess liquidity. Low interest rates and a significant amount of available financial resources were ensured by the flow of oil revenues and attraction of foreign loans with minimal restrictive actions of the state. As a result, production, incomes and consumption of the population grew, but imports and external debt increased faster, which worsened Russia's position in the context of the global financial crisis. Ultimately, the “safe haven” turned out to be more prone to the “global storm” than other “victims” of the global crisis.

Today, apparently upholding a liberal economic model, the Bank of Russia is trying to solve very contradictory problems with its interest rate policy. On the one hand, the goals of stabilizing the ruble exchange rate and reducing inflation are met by a tight monetary policy, which implies positive real interest rates and restrictive growth in the money supply. On the other hand, support for the real sector of the national economy requires large-scale financial assistance, including the attraction of affordable loans with relatively low interest rates. At the moment, there are a significant number of enterprises (of strategic interest, backbone, carrying out modernization, related to imports in their production cycle, and others) that are experiencing a production shock caused by a drop in demand, an increase in the cost of components, and the unavailability of bank loans. The result of such a "shock" was not long in coming - in January of this year, the output of the manufacturing industry fell by a quarter.

The devaluation of the ruble (since August 2008 the exchange rate of the ruble has fallen against the dual-currency basket by 40%) is already a fait accompli. Despite all the pros and cons discussed, the depreciation of the ruble has already fundamentally changed the currency of savings of the population and enterprises, caused an increase in prices in the domestic market and keeps devaluation and inflation expectations high. All the efforts of the Russian monetary authorities to give the ruble the functions of a currency of settlements, savings and investments, undertaken over the course of five years, ended up being crossed out by a two-month devaluation. The possibility of a return to the previous situation will be largely determined by the interest rate policy of the Bank of Russia, which is greatly complicated by the financial crisis and the decline in economic activity. The policy of "cheap" money should be accompanied by increased foreign exchange control and control over the spending of public resources.

In its most general form, interest rate policy is divided into restrictive (implying a restriction of the money supply and increasing the cost of financial resources) and expansionary (aimed at expanding the money supply and implying low interest rates). Conventionally, the policy of "cheap" or "expensive" money depends on the level of interest rates and inflation, as well as on expectations of the level of inflation in the future. There is no clear definition of these types of monetary policy. We believe that for the Russian economy, whose development in the past twenty years has been characterized by high inflation, a conditional division into "expensive" and "cheap" money can be made on the basis of real interest rates.

The macroeconomic tasks currently facing the government of the Russian Federation and the Central Bank are as follows:

Overcoming the economic downturn;

Keeping inflation within acceptable limits (less than 15%);

Stabilization of the ruble exchange rate and balance of payments;

Support for the standard of living of the population;

Unemployment limitation;

Stabilization of the banking system;

Maintaining a minimum level of lending to the real sector.

These tasks seem to be rather contradictory from the point of view of the development of monetary and economic policy in general. Additional factors affecting the choice of certain optimal proportions are:

A) In monetary policy - the change of instruments that has taken place in recent months. In the years leading up to the financial crisis, the Central Bank of the Russian Federation practically did not refinance the banking system, and the Ministry of Finance placed its securities in limited volumes. Now the situation has fundamentally changed: the Bank of Russia actually determines the cost of money in the economy by its refinancing rates.

B) In economic policy - the aggravation of the "personnel crisis". Any decision-making on the selection of enterprises and projects for financing, subsidizing, issuing guarantees, etc. due to both the lack of qualified personnel and the “human factor”. Within the framework of this problem, a search is being made for universal market mechanisms that allow for the adjustment of economic policy and the behavior of business entities.

Therefore, purely market mechanisms are inevitably accompanied by costs, losses and new threats. That is why the choice of one of the directions of the interest rate policy is, in fact, the choice of one of the "bad" decisions.

Dear money policy

Restrictive (aimed at limiting the expansion of the money supply) policy of "expensive" money implies a high level of interest rates and is traditionally seen as a means of suppressing inflation.

Today, the choice of such a policy may be determined by the tasks:

Maintaining a stable ruble exchange rate and reducing demand for foreign currency;

Maintain and reduce inflation. The choice of one of the directions of the interest rate policy is actually the choice of one of the available "bad" decisions.

The implementation of the “dear” money policy includes raising (or not reducing) the level of interest rates on financial resources provided by the Bank of Russia and the government, as well as restrictions on expanding the money supply. The implications of implementing this policy will vary.

Positive consequences:

Stimulation of savings in the non-financial sector (due to the growth of interest rates on deposits and the stabilization of inflation and devaluation expectations);

Selection of enterprises according to efficiency (expensive bank loans can only be attracted by enterprises that are effective today).

Negative consequences:

Reducing lending and worsening recession in the economy;

Growth of costs associated with the rise in the cost of servicing bank loans, and provoking cost inflation;

Reducing the stability of the banking system;

Deterioration of the situation with "bad" debts.

Expected results this year:

Stabilization of the ruble exchange rate;

Growth of savings of the population;

Slower lending growth;

Preservation of the inflation rate due to devaluation, inflation expectations, risk premiums (inflation will not increase, but will not decrease);

Increase in the number of defaults on domestic and foreign loans;

Reducing demand and reducing production volumes;

Decline in investment activity;

Growth in the number of bankruptcies of enterprises and banks.

On the whole, the “dear” money policy will make it possible in 2009 to keep the ruble exchange rate within the announced range and keep inflation within 20%. In addition, it will provide an opportunity to reduce the gap between loans and savings in the non-financial sector.

The real sector of the economy in the context of the policy of "expensive" money will experience a growing shortage of credit. Only an insignificant part of today's efficient enterprises will be able to use a bank loan, which can be explained by the declining profitability of industrial production. New levels of profitability indicate a decline in the ability to survive and a deterioration in the prospects for industrial production during the period of the policy of "expensive" money, as well as the real sector of the economy in the context of the policy of "expensive" money will experience a growing shortage of credit.

The “dear” money policy as a market selection mechanism works effectively and strategically correctly in a stable economy, moderately dependent on external risks, with stable growth rates, in the context of a progressive (without sharp bursts) expansion of investment. It will be possible to improve the structurally unbalanced Russian industry and revive its growth during the period of the “dear” money policy only with the use of targeted state programs.

In particular, there is a deterioration in the financial and dynamic performance of the machine-building complex - the actual locomotive of Russian industrial growth in recent years, developing on innovation and stimulating the innovative development of related industries. The obvious problems of the machine-building complex, which is the most important from the point of view of the future landscape of Russian industry, make it extremely important for the state to form and pursue an active policy to support enterprises' investments and current production activities - both with credit resources and demand formation.

Cheap money policy

Expansionary (aimed at increasing the overall money supply in the economy) "cheap" money policy based on low interest rates is traditionally used to reduce (or limit growth) unemployment in a recession.

Today, the choice of a “cheap” money policy may be determined by the following tasks:

Stimulating domestic demand and production (including supporting the level of employment);

Ensuring the stability of the banking system.

Positive consequences:

Minimization of the decline in production;

Employment support;

Stability (partly temporary and apparent) of the banking system.

Negative consequences:

Continued threat of further devaluation of the ruble;

High risks of accelerating inflation;

Conservation of structural imbalances.

Possible results this year:

The expansion of demand will reduce the rate of decline in production;

The solution to the problem of "bad" debts will be postponed to subsequent years;

High inflation will continue;

The depreciation of the ruble will continue;

There will be a sharp reduction in public resources;

The problem of low efficiency and competitiveness of Russian enterprises and banks will remain.

In addition, we note that the key issue of the policy of "cheap" money is their source. There is every reason to expect a rapid depletion of state reserves. Then the main sources of money supply will be emission refinancing of the banking system and money emission for the issuance of government securities, which poses high risks for financial stability.

2. Practical part

Cost analysis budget

Let's carry out a comparative analysis of the expenditure part of the federal budget for 2009 and for the planned period of 2010 and 2011. Consider table number 1.

Table No. 1 - Federal budget expenditures for 2009 and for the planning period of 2010 and 2011

Federal budget expenditures
Federal budget expenditures	Specific	Specific	Specific
General government issues
national defense
National Security and Law Enforcement
National economy
Department of Housing and Utilities
environmental protection
Education
Culture, cinematography and media
Health and sports
Social politics
Intergovernmental transformers
Conditionally approved expenses
Secret Articles

The largest share in the classification of expenditures is occupied by interbudgetary transfers. In 2009, the share of spending these funds is 29.38%. If we talk about the dynamics of this indicator, then next year (2010) it will decrease by 0.8%. But in monetary terms, it increases by 630.46 billion rubles. In the medium term, an absolute increase in interbudgetary transfers by 2011 to 3,994.42 billion rubles is envisaged, which is 1,007.31 billion rubles. more than in 2009. In diagrams 1 and 2, you can clearly see how this indicator changes.

Diagram 1. Dynamics of interbudgetary transfers in absolute terms

Diagram 2. Dynamics of interbudgetary transfers in relative terms

This indicates the financing of the budgets of the constituent entities of the Russian Federation.

The second section, the share of which is 11.24% of the total amount of expenditures, are national issues. In dynamics, we see that this indicator is decreasing in percentage terms. It is predicted that in 2011 the amount of expenses will amount to 1,135.45 billion rubles, which will decrease by 7.83 billion rubles compared to the planned in 2009. . The main subsections include budget allocations for the judiciary, ensuring the activities of financial, tax and customs authorities and supervisory authorities, servicing state and municipal debt and other national issues. Directly increasing the salaries of civil servants (deputies and their assistants, judges, increasing compensatory remuneration for jurors and arbitration assessors, assistant judges of arbitration courts, court secretaries of arbitration courts, etc.), overhauling administrative buildings, ensuring the activities of the Accounts Chamber of the Russian Federation . And there are a lot of such allocations in each subsection, which indicates the growth of this indicator as a whole.

The national economy ranks third in the distribution of budgetary funds. It is predicted that in 2009 the amount will be 1,063.31 billion rubles, in 2011 it will increase to 1,371.49 billion rubles. which is significantly noticeable in the percentage of 28.98%.

This section includes the powers to regulate and support economic activity, including issues of environmental management, development of infrastructure and natural resource potential, state support for certain sectors of the economy, are mainly within the jurisdiction of the Russian Federation.

The main place in their structure is occupied by budget allocations for transport, reproduction of the mineral resource base, agriculture and fisheries, communications and informatics, and other issues in the field of the national economy.

According to the forecast, this indicator is now in 3rd place, but already in 2011 it will take the second place.

The 4th place in the list of budget expenditures is national security and law enforcement, and the 5th place is national defense.

Both of these sections are increasing funding. Consider diagrams 3, 4 and 5. We see that such an indicator as national defense has a growth dynamics, from 2009 to 2011 an increase in the amount of 94.36 billion rubles is predicted. And the forecast for the national security and law enforcement section will increase by 131.19 billion rubles. As a percentage, this figure is falling. The indicator "national defense" first falls significantly (by 1.2%), and then slightly increases (by 0.3%).

Diagram 3. The share of federal budget expenditures for 2009

Diagram 4. Share of federal budget expenditures for 2010

Diagram 5. Share of federal budget expenditures for 2011

The next section, the share of which is decreasing in the total volume of expenditures, is education, in 2009 it will amount to 4.04%. In dynamics, this figure is falling, by 2011 it will decrease by 0.67%. In monetary terms, this figure is increasing. This is due to the implementation of the national project "Education", as well as an increase in teachers' salaries. Allocations are made for advanced training and retraining of employees of federal budgetary institutions, the implementation of social protection measures for orphans and children left without parental care studying in these institutions, the appropriations will ensure the provision of secondary vocational education to students, higher education, namely, an increase in budget places .

Health and sports is one of the most important indicators, because the ability of the country's population to participate in all spheres of production depends on the financing of this section. Those. with the help of labor resources, all the tasks set by the state, small organizations, factories, factories, etc. are carried out.

It is predicted that in 2009 the volume of expenses under this section will amount to 349.87 billion rubles, in 2010 there will be an increase by 4.55%, and in 2011 by 5.05%.

The social policy section is of no small importance, but its financing occupies an insignificant share in the total volume of federal budget expenditures. This figure first increases and then decreases. It is predicted that in 2009 federal budget revenues will amount to 310.26 billion rubles, by 2011 this amount will decrease by 2.38 billion rubles. Financing is carried out at the expense of subventions of the Compensation Fund (section "Interbudgetary transfers").

Less funded sections of the federal budget, the share of which is from 0.14-1.12% in total expenditures, is occupied by: 1. culture, cinematography and the media; 2. housing and communal services; 3. environmental protection.

According to changes in the budgetary legislation in the structure of expenditures in 2010 and 2011 there will be a new item - conditionally approved expenditures. That is, a certain amount of funds that is not distributed by sections and articles, which will make it possible to plan new arising obligations. In accordance with Article 199 of the RF Budget Code, these expenditures must be at least 2.5% of the total federal budget expenditures for the first year of the planning period and at least 5% of the total federal budget expenditures for the second year of the planning period.

The last section of the federal budget expenditures is secret items. If we talk about the content of this indicator, then these are articles that are not disclosed, and there is no access to this information, as well as funds that are not separated by articles, in connection with amendments to the federal law "On the federal budget for 2009 and the planning period of 2010 and 2011".

Conclusion

Monetary policy plays an important role in government policy. One of the most important ministries of the state is the Ministry of Finance, which conducts monetary policy in accordance with the tasks and goals of the development of the state and society. It is not surprising that quite a lot of different structures are subject to the Ministry of Finance, for example, such as the Central Bank. A lot of bodies (ministries, departments, committees, departments) pursue state policy in various areas, directly or indirectly related to the economy.

In a market system, the state is not a magical source of funds, but only a mechanism designed to ensure that some citizens (with a higher income) pay through taxes to others (having a lower income). In the new conditions, the main factors for the well-being of the individual are his initiative, the desire for personal activity, the readiness to choose options for economic decisions.

Conclusion - to choose from two evils.

In modern conditions, the implementation of the policy of "expensive" or "cheap" money in the classical form will rather lead to negative results. The main objectives of economic policy are to overcome the financial crisis and solve the accumulated structural problems, which are complicated by the lack of effective state institutions and their employees capable of effectively managing in a crisis period (taking into account the fact that the state has free financial resources). On the whole, the “dear” money policy will make it possible in 2009 to keep the ruble exchange rate within the announced range and keep inflation within 20%.

The policy of "expensive" money presupposes the preservation of financial stability and the selection of enterprises according to the criterion of efficiency. However, there is a significant part of enterprises (of strategic interest, backbone, carrying out modernization, related to imports in their production cycle), for which a bank loan will not be available. Therefore, such a policy should be accompanied by selective subsidization of interest rates, tax incentives, and direct government funding. Meanwhile, it is precisely the choice of areas of support.

The policy of "cheap" money includes the expansion of demand and increased production activity, but provokes inflation and devaluation. The implementation of this policy assumes the growth of all sectors of the economy without selection of their efficiency (as was observed in 2006-2007), which preserves the problems and disproportions that have accumulated over the years of intensive economic growth. The policy of "cheap" money should be accompanied by the strengthening of foreign exchange control and control over the expenditure of public resources. The most important threat in its implementation is the limited state reserves. After their exhaustion, the policy of "cheap" money will be implemented through money emission and external borrowings. Additionally, in order to avoid inflationary “overheating”, it is necessary to develop a government securities market that allows sterilization. It will be possible to improve the structurally unbalanced industry with the policy of "expensive" money only with the use of targeted state programs. excess liquidity. It will be possible to improve the structurally unbalanced industry with the policy of "expensive" money only with the use of targeted state programs.

Interest rate policy will be a key component of the fiscal policy and anti-crisis package in the coming months. A key component of financial policy - because it determines the value of the money provided to the banking system and available to Russian enterprises. And if the banking system in the formation of demand for public money is largely focused on the return on investment, margin (the difference between attracted and placed funds) and risks, then the real sector is ultimately focused on business profitability, and the population is focused on inflation. Various benchmarks in the value of money for institutional agents represent the most important contradiction in interest rate policy.

The progressive crisis (financial and in the real sector) leaves an extremely short period of time for choosing and clarifying the main directions of financial policy. The liberal version of the policy of high interest rates currently being implemented will in the near future face obvious consequences - the expansion of the use of "money surrogates" in settlements between enterprises (the spread of bill circulation, barter, as well as an increase in non-payments). The real sector has not yet responded to this policy on a large scale by increasing “bad” debts, since there are still expectations of financial assistance from the state. If such bailouts are not forthcoming and interest rates remain at their current high levels, rising NPLs as well as a lack of working capital will exacerbate the already significant decline in output recorded in January 2009.

Bibliography

1. Economy. Textbook for the course "Economic theory" / Under. ed. A.S. Bulatov. - / M .: Publishing house "BEK".

2. Burda M., Viplosh Ch. Macroeconomics. Per. from English. / Ed. V.V. Lukashevich, K.A. Refrigeration. - St. Petersburg: Shipbuilding. 2007.

3. Course of economic theory / Ed. A.V. Sidorovich. - / M .: Moscow State University. M.V. Lomonosov, "DIS".

4. McConnell K., Bru S. Economics. M.: Republic.

5. Mankiw N.G. Principles of economics. - / St. Petersburg: Peter Kom. 1999.

6. Mankiw N.G. Macroeconomics, Per. from English. - / M .: Publishing House of Moscow State University.

7. Mikloshevskaya N.A., Kholopov A.V. International economy. Textbook. - / M .: Moscow State University. M.V. Lomonosov, publishing house "Case and Service". 2000.

8. Fundamentals of economic theory. Textbook /Under. ed. V.D. Kamaev. - M.: Publishing house of MSTU im. N.E. Bauman.

9. Ovchinnikov G.G. Microeconomics. Macroeconomics. St. Petersburg: V.A. Mikhailov.

The main types of monetary policy include the policy of expensive money (restriction) and the policy of cheap money (expansion).

Let the economy face unemployment and falling prices. Therefore, the money supply needs to be increased. To achieve this goal, a cheap money policy is applied, which consists of the following measures:

First, the Central Bank must purchase securities on the open market from the public and from commercial banks.

Secondly, it is necessary to lower the discount rate.

Thirdly, it is necessary to carry out a reduction in reserve allocations.

As a result of the measures taken, the excess reserves of the commercial banking system will increase. Since excess reserves are the basis for increasing the money supply by commercial banks through lending, it can be expected that the money supply in the country will increase.

An increase in the money supply will lower the interest rate, causing an increase in investment and an increase in the equilibrium net national product. From the foregoing, it can be concluded that the objective of this policy is to make credit cheap and readily available in order to increase aggregate spending and employment.

In a situation where the economy is faced with excessive spending, which gives rise to inflationary processes, the Central Bank should try to reduce overall spending by limiting or reducing the money supply. To solve this problem, it is necessary to reduce the reserves of commercial banks. This is done in the following way. The central bank must sell government bonds on the open market in order to cut the reserves of commercial banks. Then it is necessary to increase the reserve ratio, which automatically frees commercial banks from excess reserves. The third measure is to raise the discount rate to reduce the interest of commercial banks in increasing their reserves by borrowing from the Central Bank. The above system of measures is called the dear money policy. The purpose of the policy is to limit the money supply, i.e. reducing the availability of credit and increasing its costs in order to lower costs and contain inflationary pressures.

It is necessary to note the strengths and weaknesses of the use of monetary regulation methods in influencing the country's economy as a whole. In favor of monetary policy, the following arguments can be cited. First, speed and flexibility compared to fiscal policy. Otherwise, the situation is with monetary policy. The central bank and other monetary authorities can make daily decisions to buy and sell securities and thus influence the money supply and the interest rate. The second important aspect is related to the fact that in developed countries this policy is isolated from political pressure, in addition, it is by its nature softer than fiscal policy and operates more subtle, therefore, it seems to be more acceptable politically.

But there are a number of negative points. A high price policy, if pursued vigorously enough, can indeed drive commercial banks' reserves down to the point where banks are forced to limit lending. And that means limiting the money supply. A cheap price policy can provide commercial banks with the necessary reserves, i.e. the possibility of making loans, but it is not able to guarantee that banks will actually lend and the money supply will increase. In such a situation, the actions of this policy will be ineffective. This phenomenon is called cyclical asymmetry, and it can be a serious hindrance to monetary management during a depression. during more normal periods, an increase in excess reserves leads to the provision of additional loans and, thereby, to an increase in the money supply.

Another negative factor noted by some neo-Keynesians is the following. The velocity of money tends to change in the opposite direction to the money supply, thereby slowing down or eliminating policy-induced changes in the money supply, i.e. when the money supply is limited, the velocity of money tends to increase. Conversely, when policy measures are taken to increase the money supply during a recession, the velocity of money is very likely to fall.

The monetary policy of the Republic of Belarus is an integral part of the unified state economic policy.

The main goal of the monetary policy of the Republic of Belarus is to promote the development of all sectors of the economy, to ensure the internal and external stability of the national currency.

Particular attention is paid to the creation of conditions for guaranteeing deposits of the population in banks. It should be ensured through an appropriate legislative and regulatory framework, increasing the role of centralized bank funds in this and creating deposit guarantee funds. It is envisaged in the near future to complete the compensation for the depreciation of deposits and bonds of the target interest-free loan of 1990 for the purchase of durable goods (securities).

The money supply in the national currency should be formed in volumes sufficient to provide the economy with settlement and payment means and adequate growth rates of real GDP and prices planned for years. The most important monetary policy instruments (required reserves, open market operations, bank refinancing, deposit operations, interest rate policy) will be formed at levels and in proportions that ensure the maintenance of target inflation parameters and the dollar exchange rate. The tightening of monetary policy will be the main factor in ensuring a consistent reduction in inflation.

The exchange rate policy of the Belarusian ruble should be focused on reducing inflation and replenishing the country's official foreign exchange reserves. When forming the exchange rate of the Belarusian ruble, the conditions of foreign trade will be taken into account, and above all fluctuations in world prices for goods, changes in the cross-currency rates of the countries that are its main economic partners.

The basis of the interest rate policy will be measures to ensure that interest rates consistently reach a positive level in real terms and that the real return on assets denominated in the national currency exceeds their return in foreign currency.

Monetarism as a methodological basis for developing a neoclassical monetary policy. Neo-Keynesian approach to monetary policy, its tools.

Monetarism is a school of economic thought that assigns a decisive role to money in the oscillatory movement of the economy. Monetary - means monetary (money - money, monetary - monetary). Representatives of this school see the main reason for the instability of the economy in the instability of monetary parameters.

The focus of monetarists is on monetary categories, monetary instruments, the banking system, and monetary policy. They look at these processes and categories to identify the relationship between the money supply and the level of aggregate income. In their opinion, banks are the leading instrument of regulation, with the direct participation of which changes in the money market are transformed into changes in the market for goods and services.

We can say that monetarism is the science of money and its role in the process of reproduction. This is a theory that justifies the specific methods of regulating the economy with the help of monetary instruments.

Monetarism is one of the most influential currents in modern economics, belonging to the neoclassical direction. He considers the phenomena of economic life mainly from the point of view of the processes taking place in the sphere of money circulation.

The term "monetarism" was introduced into modern literature by Karl Brunner in 1968. It is usually used to characterize the school of economics (mainly the Chicago school), which claims that total money income has a primary influence on the change in the money supply.

Initially, monetarism was identified with anti-Keynesianism, which is confirmed by the title of some works of prominent representatives of the monetarist theory (G. Jonsan's book "The Keynesian Revolution and the Monetarist Counter-Revolution").

Such a policy is proposed by dirigisme-minded Keynesians and consists in flexible maneuvering of society's monetary resources. Namely: the supply of these resources then increases (policy cheap money, or credit expansion), then it is reduced (policy expensive money, or credit restriction). At the same time, different chains of events are built and different final goals are pursued. So, cheapening money stimulates an increase in loans, total spending and investment in the economy and is aimed at "invigorating" production and increasing employment. While appreciation money, on the contrary, helps to reduce loans, spending and investment, thereby knocking down excessive commodity demand and suppressing inflation (Table 7.3).

Table 7.3

Comparative characteristics of the policy of cheap and expensive money

Directed	The politics of cheap money	Expensive money policy
Directed	against the underutilization of economic resources against a decline in production against an increase in unemployment	growing inflation
Assumes

As can be seen from the table, increase in the money supply achieved through: (1) the state buying up government bonds from banks, other enterprises, and the population (as a result, "excess" money is put into circulation); (2) a decrease in the established norm of the monetary reserve of commercial banks (as a result, their credit resources grow); (3) a decrease in the discount rate at which the central bank lends to commercial banks (as a result, the latter take more cheaper loans from the central bank and give them more and cheaper to firms and the public).

In its turn contraction in the money supply provided by the opposite measures: (1) the state sells its bonds ("binding" free money), (2) increases the bank reserve ratio and (3) raises the discount rate. Thus, the lending capacity of banks is reduced, the interest rate on loans is growing, their availability is decreasing, investments and total spending in society are declining, the aggregate demand for goods and services is falling, prices and inflation are going down.

"monetary rule" monetarists

Considered above Keynesian the policy of cheap and expensive money presupposes, as we see, active monetary regulation of the economy by the state. A different position is held by modern neoclassicists, in particular monetarists ("money-mongers"). They are represented primarily by the so-called Chicago School, led by the American liberal economist Milton Friedman (born 1912) formed at the University of Chicago in the 1950s. Monetarists rely more on the well-known market SELF-adjustment and consider active government intervention in the economy ineffective. The essence of their reasoning can be reduced to the following (Fig. 7.15)

First, in the sphere of the economy there are sometimes months-long time lags , which break in time the moment when the state takes regulatory measures and the moment when their real action begins. As a result, these measures may come too late and may work

Rice. 7.15.

already in a new economic situation, when they are either not needed or even harmful.

Secondly, the factor of so-called rational expectations market entities. This means that in today's information society, consumers, businessmen and workers are able to "calculate" in advance the development of market conditions and government policies. Proceeding from this and from their own interests, they can change their economic behavior and thereby disorganize the activities of the state. For example, inflation expectations population encourage him to "flight from money", to buy goods in stock, which pumps up current demand and increases inflation.

Thirdly, another neoclassical argument in favor of limiting state intervention in economic life is theory of supply-side economics . She develops the idea of the French economist Say about the primacy of the market offers (i.e. production) in the system of economic processes.

In the chain "production - exchange - distribution - consumption" known to us, the starting and main point is production (supply). It is this, on the one hand, that creates a mass of diverse goods, and on the other hand, the amount equivalent to their cost income (salary, rent, interest, profit). These incomes simply have nowhere to go, except to be spent on the purchase of the produced mass of commodities. From here "Say's law" in that supply automatically generates its own demand.

Thus, the market is a self-balancing system, and free market supply (production) is the main spring for the successful development of the economy and the rise in the welfare of society. Therefore, the state should not interfere with self-adjustment of the market. Its task is to stimulate the economic activity of people: (A) cut taxes to promote economic growth and (b) reduce social benefits, encouraging the unemployed to look for work, and the employed - to high wages through efficient work. An economy thrives when all people work hard, make good money, and spend a lot on shopping.

Finally, fourthly, stagflation conditions (recession and unemployment + inflation) make cheap money policy (against recession and unemployment) or expensive money policy (against inflation) unacceptable, because it can "rock" the economy even more. Hence, according to monetarists, macroregulation should be limited to compliance with "monetary (monetary) right-hander". According to him, the mass of money in circulation (money supply) should systematically and regardless of the current state of the economy increase at an annual rate corresponding to the average (over a long period) growth rate of GNP (3-5% per year).

The problem of optimal filling of the national economy with money is also very relevant for Russia. According to a number of experts, in the second half of the 1990s, an artificial money shortage, because the Central Bank pursued an excessively tight monetary policy.

The level of monetization of the economy (as a percentage of the money supply to GDP) basically barely exceeded 20%, while in the most developed countries of the "Big Seven" it varies between 55-100%, and in developing countries - between 40 and 60%. This made it difficult to fulfill the state budget of the Russian Federation, violated the current financing of production and the investment process. As a result, non-payments "raged" in our country (especially in wages), economic growth was held back, and crisis phenomena were stimulated.

Be that as it may, the ongoing theoretical discussions between Keynesians and neoclassicals confirm the extreme complexity of macroeconomic processes. That is why most practical economists strive not to be "captured" by individual theories and advocate a balanced and flexible application of all the valuable recommendations of scientists in accordance with the specific conditions of a particular period of time and their country.

Restriction(from Latin restrictio - restriction) - restriction of certain business processes (production, lending, sales).
lag(from English, lag - delay, backlog) - a time gap between interrelated phenomena or processes (for example, between investments in production and getting the effect from them - term return on investment).
"Supply Economics" from the English term supply-side economics– (literally) supply-side economics.
"Big Seven"(eng. "The Great Seven", or "G-7") - a group of seven advanced and most influential world powers: UK, Italy, Canada, USA, Germany, France, Japan. Annual meetings at the highest level, as well as at the level of heads of ministries and other institutions of these countries, have been held since 1975 (the first meeting without Canada, which joined in 1976). They discuss pressing economic and political problems, on which agreed solutions are developed. Since the late 1990s, many of these meetings have been attended by Russia("big eight").