Economic cycle– these are ups and downs in people’s economic activity that are repeated over a long period, with a general tendency towards economic growth.

The economic cycle is usually divided into separate periods, or phases.

There are two main classifications of phases of cyclical economic development:

four-phase and two-phase models.

The four-phase cycle structure, usually called classical,

includes phases of crisis, depression, recovery and recovery. Each of them

characterized by certain quantitative and qualitative characteristics

peculiarities.

The main quantitative parameter of the cycle is the change in such volumetric indicators as gross domestic product (GDP), gross national product (GNP) and national income (NI).

The overall change in the volume of products produced (both material and

immaterial) serves as the basis for dividing the classical cycle into four phases.

In the first phase(a crisis) there is a drop (reduction) in production to a certain minimum level;

in the second(depression) the decline in production has stopped, but there is still no growth;

in the third(revival) there is an increase in production to the level of its highest pre-crisis volume;

in the fourth(climb) production growth goes beyond the pre-crisis level and develops into an economic boom.

Moreover, each of the four phases has specific and fairly typical

During crisis the demand for basic factors of production, consumer goods and services is reduced, and the volume of unsold products increases. As a result of decreased sales, prices, enterprise profits, household incomes and state budget revenues decrease, loan interest increases (money becomes more expensive), loans are reduced, and unemployment rises sharply.

During depression stagnation sets in in the economy, the reduction in investment and consumer demand stops, the volume of unsold products decreases, mass unemployment persists with low prices. But the process of updating fixed capital begins, more modern production technologies are being introduced, and the prerequisites for future economic growth are gradually being formed when so-called “growth points” arise.

During revival the demand for factors of production and consumer goods increases, the process of renewal of fixed capital accelerates, loan interest decreases (money becomes cheaper), sales of finished products and prices increase, and unemployment decreases.

During rise acceleration affects the dynamics of aggregate demand, production and sales, and the renewal of fixed capital. During this phase, active construction of new enterprises and modernization of old ones takes place, interest rates are reduced, prices are rising and profits, household incomes and state budget revenues are increasing. Cyclical unemployment decreases to its minimum.

When describing the phase structure of cyclicity itself, modern economists usually use another option that differs from the classical one.

In this version, the cycle breaks down into the following elements:

1) peak(the point at which real output reaches its highest volume);

2) reduction(period during which there is a decrease in output

product and which ends at the bottom or sole);

3) bottom or sole(the point at which actual output reaches its minimum volume);

4) climb(the period during which there is an increase in real output).

With such structuring of the economic cycle, ultimately only two main phases are distinguished in it: ascending and descending, i.e. rise and decline in production, its “rise” and “fall”.

The wave-like curve shown on the graph reflects cyclical fluctuations in output (GDP) with peaks B and F and a low point of decline (bottom) D. The time interval between two points that are in the same stages of fluctuation (in this case between points B and F) is determined by as one period of a cycle, which in turn consists of two phases: descending (from B to D) and ascending (from D to F).

In this case, the wavy curve of cyclic fluctuations is located on the graph around

a straight line of the so-called “secular” trend, depicting the long-term trend in economic growth of gross domestic product and having a positive slope.

Annex 1.

Nature of the theory		Principles of cyclicality
Theory of cosmic factors	W. Jevons	The emergence of economic cycles is associated with the 10-year cycle of solar activity, which predetermines economic and political activity
Theory of external natural and climatic factors	U Beveridge, W. Sombart	Impact of natural and climatic conditions on productivity
Psychological theory	V. Pareto, A. Pigou	Alternating periods of optimism and pessimism in human economic activity
Population underconsumption theory	T. Malthus, J. Sismondi, D. Hobson	The thrifty and the rich prosper in society, and they tend to consume less and save and save more
The theory of excessive accumulation of capital	M. Tugan-Baranovsky, L. Mises, F. Hagen	The production of means of production is significantly ahead of the production of consumer goods, which creates imbalances in the national economy and causes a crisis
Innovation theory	J. Schumpeter	The spasmodic nature of the implementation of scientific and technical progress achievements in the economy as a consequence of cyclicality
Monetary theory	R. Hawtrey, I. Fisher	Monetary irregularities
Industrial cycle theory		Crises are the inevitable companions of capitalism, through which its contradictions are temporarily resolved and accumulated imbalances are eliminated
Keynesian theory	D. M. Keynes	Excess savings and lack of investment
Monetary theory	M. Friedman	Instability of monetary circulation

Appendix 2.

Cycles of Kitchin, Juglar, Kondratiev

In modern economic science, about 1400 different types of cyclicity have been developed with a duration of action from 1–2 days to 1000 years.

The most popular of them are:

1.Cycles J. Kitchina – short-term(small) market cycles of 3–4 years. They are usually associated with the disruption and restoration of equilibrium in the product market due to periodic mass updating of the product range;

2.Cycles K. Juglara– medium term(industrial, business, business) economic cycles lasting about 10 years. It is during this period of time that, on average, fixed capital functions in production; the replacement of worn-out fixed capital in the economy proceeds continuously, but not at all evenly, since it is under the determining influence of scientific and technical progress. This process is combined with the flow of investment, which in turn depends on inflation and employment.

3.Cycles N. Kondratieva – long wave ( large) cycles spanning approximately 50 years. Their existence is associated with the need to change the basic infrastructure of the market economy: bridges, roads, buildings and structures that last an average of 40–60 years.

UNEMPLOYMENT: DEFINITION, CALCULATION METHODS, TYPES.

Reason: disturbance of macroeconomic balance.

Unemployed - a person who did not have a job during the period under review, was actively looking for work and is ready to start doing it. (ILO).

Labor force (economically active population) = Employed + Unemployed.

Unemployment rate= ratio of unemployed to labor force * 100%.

The economically active population is engaged in professional activities that generate income.

Forms of unemployment.

1 Friction.

Search and place of work that matches qualifications and individual preferences. This form of unemployment is usually limited to short periods. As citizens' wealth increases, frictional unemployment may increase.

2.Structural unemployment associated with technological shifts in the economy that change the structure of labor demand.

3. Natural rate of unemployment.

The combination of frictional and structural unemployment forms the level of natural unemployment corresponding to potential GDP or the situation of macroeconomic equilibrium.

Frictional unemployment is the result of labor market dynamics. Structural unemployment occurs due to territorial or occupational discrepancies in labor supply and demand. These forms of unemployment correspond to a favorable period of the economy. Natural unemployment is the best labor reserve for the economy.

Natural unemployment represents the best labor reserve for the economy. These workers have high mobility and are able to quickly move (to another industry or region) depending on production needs.

In reality, the economy does not develop along a straight line (trend), which characterizes economic growth, but through constant deviations from the trend, through recessions and ascents. The economy develops cyclically (Fig. 1). The economic (or business) cycle is a periodic ups and downs in the economy, fluctuations in business activity. These fluctuations are irregular and unpredictable, so the term “cycle” is rather arbitrary. There are two extreme points of the cycle: 1) the peak point, corresponding to the maximum of business activity; 2) the bottom point (trough), which corresponds to the minimum of business activity (maximum decline).

The cycle is usually divided into two phases (Fig. 1.(a)): 1) a recession phase, which lasts from peak to bottom. A particularly long and deep decline is called depression. It is no coincidence that the crisis of 1929-1933 was called the Great Depression; 2) the rise phase or recovery, which continues from the bottom to the peak.

There is another approach in which four phases are distinguished in the economic cycle (Fig. 1.(b)), but extreme points are not identified, since it is assumed that when the economy reaches a maximum or minimum of business activity, then a certain period of time (sometimes quite long) it is in this state: 1) Phase I – boom, in which the economy reaches maximum activity. This is a period of overemployment (the economy is above potential output, above trend) and inflation. (Remember that when actual GDP in an economy is higher than potential GDP, this corresponds to an inflation gap). An economy in this state is called an “overheated economy”; 2) P phase – recession (recession or slump). The economy gradually returns to the trend level (potential GDP), the level of business activity declines, actual GDP reaches its potential level, and then begins to fall below the trend, which leads the economy to the next phase - crisis; 3) Phase III – crisis or stagnation. The economy is in a recession gap because actual GDP is less than potential. This is a period of underutilization of economic resources, i.e. high unemployment; 4) IV phase – revival or recovery. The economy gradually begins to emerge from the crisis, with actual GDP approaching its potential level and then exceeding it until it reaches its maximum, which again leads to a boom phase.

Causes of the business cycle

In economic theory, a variety of phenomena were declared to be the causes of economic cycles: sunspots and the level of solar activity; wars, revolutions and military coups; presidential elections; insufficient level of consumption; high population growth rates; investor optimism and pessimism; change in money supply; technical and technological innovations; price shocks and others. In reality, all these reasons can be reduced to one. The main cause of economic cycles is the discrepancy between aggregate demand and aggregate supply, between aggregate expenditures and aggregate production volume. Therefore, the cyclical nature of economic development can be explained: either by a change in aggregate demand with a constant value of aggregate supply (an increase in aggregate expenditures leads to an increase, a reduction in them causes a recession); or a change in aggregate supply with a constant value of aggregate demand (a reduction in aggregate supply means a recession in the economy, its growth means a rise).

Let's consider how indicators behave at different phases of the cycle, provided that the cause of the cycle is a change in aggregate demand (aggregate expenses) (Fig. 2.(a)).

In the boom phase, there comes a moment when the entire production volume cannot be sold, i.e. total expenditure is less than output. Overstocking occurs, and initially firms are forced to increase inventories. An increase in inventories leads to a curtailment of production. A reduction in production leads to firms laying off workers, i.e. the unemployment rate is rising. As a result, total incomes fall (consumer income - due to unemployment, investment income - due to the pointlessness of expanding production in the face of falling aggregate demand), and, consequently, total expenses. Households, first of all, reduce demand for durable goods. Due to the fall in firms' demand for investment and household demand for durable goods, the short-term interest rate (the price of investment and consumer credit) decreases.

The long-term interest rate tends to rise (when incomes are low and cash is tight, people start selling bonds, the supply of bonds increases, their price falls, and the lower the price of the bond, the higher the interest rate). Due to a decrease in total income (tax base), tax revenues to the state budget decrease. The amount of government transfer payments increases (unemployment benefits, poverty benefits). The state budget deficit is growing. Trying to sell their products, firms can reduce their prices, which can lead to a decrease in the general price level, i.e. to deflation (in Fig. 2.(a) output is reduced to Y1, and the price level falls from P0 to P1).

Faced with the impossibility of selling their products even at lower prices, firms (as rational economic agents) can either buy more productive equipment and continue producing the same type of goods, but at lower costs, which will reduce product prices without reducing profits (this is advisable to do if the demand for goods produced by the company is not saturated, and a reduction in prices in conditions of low income will provide the opportunity to increase sales); or (if the demand for goods produced by the company is completely saturated and even a reduction in prices will not lead to an increase in sales) switch to the production of a new type of goods, which will require technical re-equipment, i.e. replacing old equipment with fundamentally different new equipment. In both cases, the demand for investment goods increases, which serves as an incentive to expand production in industries producing investment goods. A revival begins there, employment increases, firm profits grow, and total income increases. Rising incomes lead to increased demand in consumer goods industries and increased production there. The recovery, employment growth (declining unemployment) and income growth are spreading throughout the economy. The economy is starting to pick up. An increase in demand for investment and durable goods leads to an increase in the cost of credit, i.e. an increase in short-term interest rates. The long-term interest rate decreases as the demand for bonds increases and, as a result, the prices (market rates) of securities increase. The price level is rising. Tax revenues are increasing. Transfer payments are being cut. The state budget deficit decreases and a surplus may appear. A rise in the economy and growth in business activity turn into a boom, into an “overheating” of the economy (Y2 in Fig. 2.(a)), after which another recession begins. So, the basis of the economic cycle is the change in investment spending. Investment is the most volatile part of aggregate demand (aggregate spending).

In Fig. 2. The cycle is represented graphically using the AD-AS model. In Fig. 2.(a) shows the economic cycle caused by changes in aggregate demand (aggregate expenditures), and in Fig. 2.(b) – changes in aggregate supply (aggregate output).

In conditions when a recession in the economy is caused not by a reduction in aggregate demand (aggregate expenditures), but by a decrease in aggregate supply, most indicators behave the same as in the first case (real GDP, unemployment rate, total income, firm inventories, sales volume , corporate profits, tax revenues, the volume of transfer payments, etc.) The exception is the indicator of the general price level, which increases as the recession deepens (Fig. 2.(b)). This is a situation of “stagflation” - a simultaneous decline in production (from Y* to Y1) and an increase in the price level (from P0 to P1). Investments also form the basis for exiting such a recession, since they increase the stock of capital in the economy and create conditions for the growth of aggregate supply (shift of the SRAS1 curve to the right to SRAS0).

Business cycle indicators

The main indicator of the cycle phases is the rate of growth (g), which is expressed as a percentage and calculated by the formula: g = [(Yt – Yt – 1) / Yt – 1 ] x 100%, where Yt is real GDP of the current year, and Yt – 1 is the real GDP of the previous year. Thus, this indicator characterizes the percentage change in real GDP (total output) in each subsequent year compared to the previous one, i.e. in fact, not the growth rate, but the GDP growth rate. If this value is positive, then this means that the economy is in a boom phase, and if it is negative, then it is in a recession phase. This indicator is calculated for one year and characterizes the rate of economic development, i.e. short-term (annual) fluctuations in actual GDP, as opposed to the average annual growth rate used in calculating the rate of economic growth, i.e. long-term trend of increasing potential GDP.

Depending on the behavior of economic quantities at different phases of the cycle, the following indicators are distinguished:

• pro-cyclical, which increase in the recovery phase and decrease in the recession phase (real GDP, total income, sales volume, corporate profits, tax revenues, transfer payments, import volume);
• countercyclical, which increase in the recession phase and decrease in the recovery phase (unemployment level, the value of firms' inventories);
• acyclic, which are not cyclical in nature and the value of which is not related to the phases of the cycle (export volume, tax rate, depreciation rate).

Types of cycles

There are different types of cycles based on duration:

• centennial cycles lasting a hundred or more years;
• “Kondratiev cycles,” which last 50-70 years and are named after the outstanding Russian economist N.D. Kondratiev, who developed the theory of “long waves of economic conditions” (Kondratiev suggested that the most destructive crises occur when the points of maximum decline coincide business activity of the “long-wave cycle” and the classical one; examples are the crisis of 1873, the Great Depression of 1929-1933, stagflation of 1974-1975);
• classical cycles (the first “classical” crisis (crisis of overproduction) occurred in England in 1825, and since 1856 such crises have become worldwide), which last 10-12 years and are associated with a massive renewal of fixed capital, i.e. equipment (due to the increasing importance of obsolescence of fixed capital, the duration of such cycles in modern conditions has decreased);
• Kitchin cycles lasting 2-3 years.

The identification of different types of economic cycles is based on the duration of operation of various types of physical capital in the economy. Thus, centennial cycles are associated with the emergence of scientific discoveries and inventions that produce a real revolution in production technology (remember, the “age of steam” was replaced by the “age of electricity” and then the “age of electronics and automation”). Long-wave Kondratiev cycles are based on the service life of industrial and non-industrial buildings and structures (the passive part of physical capital). After about 10-12 years, physical wear and tear of equipment (the active part of physical capital) occurs, which explains the duration of “classical” cycles. In modern conditions, the paramount importance for replacing equipment is not physical, but its obsolescence, which occurs in connection with the advent of more productive, more advanced equipment, and since fundamentally new technical and technological solutions appear every 4-6 years, the duration of cycles becomes shorter . In addition, many economists associate the duration of cycles with the massive renewal of durable goods by consumers (some economists even propose classifying them as investment goods purchased by households), which occurs at intervals of 2-3 years.

In a modern economy, the duration of cycle phases and the amplitude of fluctuations can be very different. This depends, first of all, on the cause of the crisis, as well as on the characteristics of the economy in different countries: the degree of government intervention, the nature of economic regulation, the share and level of development of the service sector (non-manufacturing sector), the conditions for the development and use of the scientific and technological revolution.

It is important to distinguish cyclical fluctuations from non-cyclical fluctuations. The economic cycle is characterized by the fact that all indicators change and that the cycle covers all industries (or sectors). Non-cyclical fluctuations are reflected:

• changes in business activity only in some industries that have a seasonal nature (an increase in business activity, for example, in agriculture in the fall during the harvest period and in construction in the spring and summer and a decline in business activity in these industries in the winter);
• in changes in only some economic indicators (for example, a sharp increase in retail sales before the holidays and an increase in business activity in relevant industries).

A recession is a negative trend in macroeconomics (the national economy), often preceding a crisis. This phenomenon is cyclical in nature and is inevitable for any economic system.

What is a recession in the economy

Recession (Latin recessus - retreat) is a concept in macroeconomics that denotes a drop in production rates over a long period (from six months or more).

The process is characterized by zero or negative dynamics of GDP (gross domestic product). A recession entails a decrease in business activity and a slowdown in economic development. A reduction in GDP refers to a decrease in the production of goods and a decrease in consumption.

A recession inevitably follows a boom (production boom), which is explained by the cyclical nature of any economic system.

In general the economic cycle consists of four phases– growth (rise), (stabilization, absence of any dynamics), recession (fall) and crisis (depression).

The duration of the economic cycle in the modern global world is 10-15 years, which can be tracked by the global financial crises - the 70s, 90s and the last global crisis of 2008-2009.

Causes of recession in the economy

There are several main causes of recession, depending on the level of economic development.

For resource-based economies, the decline is driven by lower prices for oil, gas and other exported minerals. The price of raw materials falls, the budget receives less revenue, and a deficit appears that needs to be compensated somehow.

To compensate, tax rates are increased and spending on social needs (education, medicine, etc.) is reduced. Such actions further intensify the decline in production.

In developed (industrial and post-industrial) countries, recession manifests itself as a result of a change in the technological structure, for example, due to the emergence and development of information technology.

The technological structure is understood as the level of development of technology and technology, the main directions of development of scientific and technological progress.

It is impossible to influence the indicated reasons for the occurrence of a recession; they arise due to the objective laws of economics, so a recession at the level of an individual national economy will happen sooner or later.

A recession in one country can lead to a recession in other economies, leading to a global crisis.

There are reasons that arise under the influence of market participants. The economic downturn may be caused by problems in the banking sector.

For example, commercial banks have issued too many loans that are not repaid. Then financial organizations are forced to raise rates and raise funds in the foreign and domestic markets. In a situation when there are too many such banks, the number of loans issued falls, enterprises therefore cannot borrow money and, in the absence of funds, stabilize or curtail production.

Because of this, unemployment is growing, people and companies are not paying off loans, banks are tightening rules, and the situation is entering a vicious circle and getting worse.

Force majeure circumstances, for example, war or a sharp change in energy prices, can plunge the economy into a recession phase. A way out of stagnation is only possible with the participation of the state, which will “pour” money into the economy, supporting various industries and stabilizing the exchange rate of the national currency.

Consequences of the recession

The main consequences of a recession in the economy include the following:

• drop in production volumes;
• collapse of financial markets;
• reduction in the volume of loans issued;
• increase in interest rates on loans;
• rising unemployment;
• decline in real incomes of the population;
• decline in GDP rates.

The most powerful and the critical consequence of a recession is the economic crisis. Due to the decline in production, the need for jobs and the number of workers decreases. This entails a wave of layoffs and rising unemployment. People begin to consume less, which leads to a decrease in demand for products and an increasing decline in production.

The debt of citizens and organizations to banks is increasing, which, in turn, are tightening the procedure for issuing loans. The volume of lending to individuals and legal entities is decreasing, the volume of investment in industry and science is decreasing, and scientific and technological development is slowing down. The decline in production is followed by a collapse of the securities market - shares of large industrial enterprises sharply lose value.

These events are followed by depreciation of money - inflation, further rise in prices and a decrease in real incomes of the population. Which ultimately leads to dissatisfaction and a decrease in quality of life.

The state is trying to find funds and is increasing its external debt. In the absence of sufficient finance, you have to refinance current loans and take out new ones.

All of these consequences are reflected in one indicator - a decrease in GDP (gross domestic product), which directly depends on the volume of production within the country.

Discussion (10)

It should be noted that recession, although an inevitable process, can be facilitated by certain factors. What can be called today is a negative economic situation throughout the world, and sanctions can only increase production indicators.

The sustainability of the country's development is characterized by the successful development of fundamental and applied sciences, the ability to manage effectively (professionally), mastering the processes of creating and introducing technologies into production. Professional work to improve the quality of human life and the prestige of the state. Suggest, friend, who among us has such an ability?
Hint: put less emphasis on the bobble…. Creativity is the most effective means of getting results!

The recession is a rabble of charlatans in power. These are not economists, there is a conspiracy of officials here and they are tasked with destroying Russia. And also to create conditions under which Russia should remain in bondage to foreign banks. Let me give you an example: I was not allowed to create a single production facility over the past 29 years. And now the population of my city is almost all unemployed, living on the pensions of old people. In 10-15 years, Russia's external debt will amount to several tens of trillions of dollars. The government and the State Duma are dealing with one issue: how to increase the flow of funds into the country's budget. An increase in taxes will not produce results; on the contrary, production will be closed, housing and communal services in cities will become unusable, and there will be no funds for the restoration of infrastructure. Customs and border services, which now help fill the budget, will be reduced in the future since there is no currency to purchase goods abroad, etc. I consider first of all to create, while funds are available, a Presidential Monetary Fund, which would specifically direct funds to the opening and creation of new production facilities, as well as products that would be exported. Under no circumstances should funds be allocated to already opened industries. There is a saying that an old horse is shot. Entrepreneurs who would like to create a production must provide a raw project for opening a production and, together with the Presidential Fund, bring this project to a ready-made full-fledged enterprise. If, in the event of termination of an individual’s business activity, the property that was built at the expense of the Presidential Fund should be transferred or repurposed into another type of activity. Upon full repayment of the debt to the Presidential Fund, the property becomes the property of the entrepreneur. An entrepreneur is prohibited from taking loans from other banks using property owned by the Presidential Fund as collateral. Allow the constituent entities of the Russian Federation to transfer land from Federal use to urban use and simplify this procedure. P.s Well, we still need to do something or the whole country will switch to doshirak.

Sergey, alas, all economies, even the most successful ones, have ups and downs. There are many reasons for this. A good economy differs from a bad one by the smaller depth of the recession and its short duration.

1. Today's crisis in the economy is the work of accountants Selyu-Liu Lyu from the economic block. Accountants who can only distribute the country's budget a priori cannot develop the country's economy, since they do not understand how to develop the economy.
2. If you are engaged in cyclical economics, then it is stupid to expect that after the rise you and your economy will not fall into a hole after the rise, and the higher your rise, the deeper your pit of fall will be.
3. A good economy does not have a cyclical nature and is in almost equilibrium; for this, any economist can see what gives rapid growth not to the economic sector that influences the economy, or to the industrial sector in order to prevent overproduction. The economist will determine how to do so that there is no sharp growth in this sector, which creates instability in the economy.

Recession is a harbinger of crisis. In our country, it is currently provoked by the price of energy resources (oil and gas), financial sanctions of partner countries that wanted to avoid the crisis at the expense of individual countries and regions, trade sanctions on import exports for our enterprises, financial credit sanctions, accelerated repayment of loans to foreign banks and the inability to obtain new ones, the confusion of the foreign exchange market and the decrease in the circulation of foreign currency, especially the US dollar, the conduct of military operations and political pressure from other states. All this increases the country’s responsibility for developing its own production, moving away from the commodity market, import substitution, strengthening the role of its own currency within the country and reducing the influence of foreign currency on its own economy. I think so.

I would also like to read about ways to fight and overcome the recession. Personally, I can think of two ways off the top of my head.
The first is US policy during the Great Depression (late 20s - mid 30s), namely the increase in government spending as part of large-scale financing of the construction of large infrastructure facilities (fighting unemployment), regulation of healthcare and education, ensuring a living wage, devaluation dollar. These measures, although not immediately (over about 5 years), returned both the PPI and the unemployment rate to the “pre-depression” level.
The second method is the policy of, for example, Saudi Arabia and other Gulf states, which, having significant reserves, can use them to offset the consequences of the economic downturn by pumping funds into artificially maintaining consumer demand (subsidies, unsecured salary growth etc.) instead of investing in real sectors of the economy. By the way, Russia also used this method in 2008. Its disadvantage is obvious - recession syndromes are stopped without eliminating its root cause, namely, the inconsistency of the economic model with the realities of the surrounding world.

It is known that the functioning of a capitalist economy is subject to cyclical fluctuations.

The cyclical nature of macroeconomic processes was first identified back in the 19th century in connection with periodic crises of overproduction in England (since 1825), which have since been regularly repeated at intervals of 7-12 years.

Since 1825 periodic crises those. declines (recessions) in national production and, above all, industrial production And employment, as well as other indicators, are repeated with approximately the same frequency, although with different intensity, and since 1857. This phenomenon began to manifest itself on a global scale.

Such crises are always followed climbs national production. And since it's alternation recessions And rises(hesitation) wears periodic, that is natural character, obvious cyclical nature macroeconomic fluctuations. It is this cycle that modern economists have in mind when they use the term “economic (or business) cycle” (business cycle).

1. The concept of the business cycle. Main components of economic dynamics. Phases of the economic (business) cycle.

2. Classical and Keynesian interpretations of cyclical fluctuations.

3. Modern theories of macroeconomic fluctuations.

4. Forecasting problems.

The concept of the economic (business) cycle. Main components of economic dynamics. Phases of the cycle.

Economic cycle representssuccessive and periodically recurring recessions and increases in economic (business) activity against the background of the general tendency (trend) of economic growth.

Figure 7.1 shows the standard interpretation of the loop: potential GDP in combination with actual GDP.

The purple prime line characterizes the general trend of economic growth, i.e. long-term dynamics of potential GDP.

The wavy red line characterizes short-term dynamics of actual GDP.

As follows from the presented diagram, short-term analysis is required to identify cyclicality as a form of movement (functioning) of a capitalist market economy, while long-term analysis, the subject of which is potential GDP, is necessary to identify patterns of economic growth and development.

In fact, detecting the business cycle is not that easy. The fact is that a market economy (like any other) is characterized by a wide variety of fluctuations, for example, seasonal, of both natural and anthropogenic origin. Both irregular and random fluctuations can be detected. Therefore, scientists are faced with the need to develop methods for eliminating such fluctuations in the course of macroeconomic analysis.

Although the cyclical development of the capitalist economy was noticed long ago and is recognized by most economists, not everyone shares the opinion about the existence economic (business) cycle. Term « cycle » implies recognition natural and therefore regular And projected nature of macroeconomic fluctuations, and also - this is the main thing - recognition endogenous (internal) nature of these vibrations.

Some economists argue that macroeconomic fluctuations– fluctuations in business activity – irregular, since they are conditioned exogenous (external to the economy) factors and, therefore, these fluctuations not natural And not predictable.

Phases of the economic (business) cycle.

Economic ( business, medium term ) cycle consists of four phases (Fig. 7.2):

climb (revival),

highest point of the cycle – peak loop(" boom»),

slump or recession(can go to depression),

lowest point of the cycle (depression, bottom).

Rise (revival) begins with the growth of actual GDP and reducing unemployment, which due to the growth of aggregate demand, primarily investment. Then a slight increase in the price level begins ( premature inflation). Once the economy reaches potential GDP , the next phase begins.

GDP

recession

depression

The presented modern cycle structure is essentially a two-phase cycle model: phase recession(recession) and phase expansion (climb). Depression And peak act as turning points between these two phases.

Has become widespread and four-phase(Fig. 7.3) cycle model. Even K. Marx identified four phases (although he meant industrial cycle):

a crisis(decrease in production volume, increase in unemployment);

depression(the fall in production and the rise in unemployment stops);

revival(some reduction in unemployment, the beginning of growth in production volume - up to so on) A);

climb(rapid growth in production and employment after the so-called A).

Dot A represents the maximum level of economic activity achieved in the previous cycle. The dotted line touching the peak points of the cycles represents the long-term (secular) trend of economic growth.

Cyclicity was first identified as a statistical pattern in the 60s of the 19th century. French statistician K. Juglar. The credit for the theoretical explanation and analysis of the (industrial) cycle belongs to K. Marx. Therefore, these cycles are called Marx–Juglar cycles.

What is characteristic of a crisis (or recession, or recession)?

In the past (in the 19th century), crises usually began with a suddenly discovered gap between excessive aggregate proposal and insufficient aggregate demand. As a result, prices and profits fell sharply, dragging down production and employment (rising unemployment).

K. Marx explained crises (and therefore the cycle) endogenous inherent in a capitalist economy is the contradiction between social nature of production And private in nature assignments production results:

The social nature of production means the universal interconnection and interdependence of macroeconomic processes.

Private nature of appropriation production results is manifested in the fact that firms seeking to maximize profits make decisions and act autonomously ( atomistically– K. Marx’s term), i.e. independently of each other.

Autonomous decisions and the actions of firms based on them lead to violations private, general, and finally macroeconomic equilibrium .

Violations of the conditions of macroeconomic equilibrium are explosive character: suddenly appear all the contradictions that accumulated in the economy in the previous period, first of all:

contradiction betweenproduction and consumption (hence the name overproduction crisis);

contradiction betweenlabor and capital (manifested, in particular, in the growth of unemployment).

other macroeconomic indicators are violatedproportions (what we formulate as the conditions of macroeconomic equilibrium, which manifests itself, in particular, in a sharp increase savings compared with investment demand, primarily due to the accumulation of a depreciation fund, which J.M. Keynes later paid special attention to).

Thus, according to Marx, crisis (recession, recession) is a period of forced return to macroeconomic equilibrium (through restoration of private and general equilibrium). This return opens the way to the new cyclical rise economy. Then everything repeats all over again.

Marx proved that cyclicality is an immanent form of economic movement inherent in capitalism.

Marx believed that based on the periodicity of crises(i.e. at the basis of the cycle) lies periodic mass renewal of fixed capital. The period itself corresponds in terms of duration to the average service life of the active part of fixed capital - industrial equipment.

For our compatriots, the word “crisis” has long become almost familiar. We hear it quite often in the news - after all, the economic crisis in Russia happens even more often than once a decade (if we take the period after the collapse of the Soviet Union).

However, not everyone knows exactly what the causes of the economic crisis in Russia are and how this threatens the ordinary citizen.and when it will end.IQReview I have collected up-to-date information and answers to similar questions in one place.

What is an economic crisis and what are its symptoms?

To summarize: an economic crisis is a set of events during which significant and sharp drop in production.

T This situation has a number of signs, including:

Rising unemployment rate.

Significant depreciation of the national currency.

Imbalance of supply and demand in various markets for goods and services.

Decrease in the solvency of citizens.

Decrease in GDP (or cessation of growth - if before this GDP was steadily increasing).

Decrease in the pace and volume of production in various industrial sectors.

Outflow of foreign capital.

Reducing the cost of raw materials.

The listed “symptoms” are only the main ones - in fact, the list of problems in the economy is much longer. They usually manifest themselves sharply, comprehensively (several points at once), and in a significant volume. For example, if the unemployment rate in the country increases by 5% over a year, then this is bad, but far from a crisis. But if in six months the national currency has depreciated by 30%, GDP has fallen, several thousand enterprises have gone bankrupt, and performance in various sectors of the economy has fallen - this is already a crisis.

Classification of crisis situations

Since a crisis is a large-scale phenomenon, it can be divided into various categories based on a number of characteristics:

Partial or sectoral. It is characterized by the fact that it covers a separate sector of the economy without leading to significant problems in other areas.

Cyclical. Characterized by the fact thatoccurs regularly (repeated at approximately equal time intervals). Typically, its causes are the obsolescence of industrial equipment and technologies, which leads to higher prices for products. To overcome such problems, a reorganization of the production structure is required.

Intermediate. It is similar to cyclical, but differs in that problems do not appear so acutely and sharply. Also, the intermediate crisis is not regular - it does not repeat itself at approximately equal time intervals.

Crisis situations can also be divided by localization. They can occur in a single region, in a single country, several countries (neighboring), or in a large number of countries. The global economic crisis is the last option, when an economic decline is observed in several major countries at the same time.

Modern classification of economics

According to the NBER classification (National Bureau of Economic Research, USA), the state of the modern economy consists of only 4 phases:

Economic cycle

Peak (when the economic situation is at its most comfortable level).

Recession (when stability is disrupted and the economy begins to steadily deteriorate).

Bottom (lowest point of decline).

Revival (overcoming a low point, followed by a way out of a crisis situation).

N A little history: when have serious economic crises ever occurred?

To confirm the words that the global economic crisis is a regular phenomenon, here is a list of the largest economic collapses:

1900-1903. The crisis suddenly began in most European countries, and a little later in the United States. This economic crisis in Russia (in those years - still the Russian Empire) began even earlier - in 1899. Moreover, in Russia it developed into a protracted depression, which lasted about a decade - until 1909.

1914-1922, First World War. The crisis erupted due to military action that stopped or seriously affected the operations of thousands of companies in participating countries. The problems began even before the outbreak of hostilities - when the situation began to heat up and panic began in the financial markets.

“Price Scissors”, 1923. The collapse that affected the economy of the “young” USSR. It arose due to the lack of balance between the prices of industrial and agricultural goods.

"The Great Depression", 1929-1939. It had the strongest impact on the USA and Canada, to a lesser extent on France and Germany, and was also felt in other developed countries. The reasons for this collapse have not been precisely established; there are several versions. It broke out after the stock market crash in the United States, on Wall Street (this is where the expression “Black Monday” came from).

1939-1945, World War II. Naturally, such large-scale military actions led to the decline of the economies of all participating countries and affected other states.

Oil crisis (or oil embargo), 1973. Began due to the refusal of a number of countries (Arab states that are members of OAPEC, Egypt, Syria) to supply oil to Japan, the USA, the Netherlands, Canada, and the UK. The main objective of this action was to put pressure on these countries for supporting Israel in the military conflict against Syria and Egypt. This economic crisis in Russia (USSR at that time) did not bring negative consequences. On the contrary: oil supplies from the Union have increased significantly, and its cost in 1 year has increased from $3 to $12 per barrel.

The collapse of the USSR, the end of the 80s and the beginning of the 90s. The situation that led to the collapse of the Union developed under the pressure of several factors: sanctions from the West, decreased oil prices, lack of sufficient quantities of consumer goods, high unemployment, military operations in Afghanistan, and general dissatisfaction with the ruling elite. The collapse had a strong impact on the countries of the Union, and to a lesser extent on neighboring states (due to the deterioration or complete cessation of cooperation).

Russian crisis, 1994. After the collapse of the Union, the economic situation of the Russian Federation was in a deplorable state, and from 1991 to 1994 the situation steadily worsened. The causes of the problems were errors in state property, loss of economic ties, outdated technologies and equipment in production.

Russian default, 1998. Developed due to the inability to pay government debts. The precondition was the crisis in Asia, a sharp drop in oil prices and a sharp rise in the dollar exchange rate against the ruble (from 6 rubles to 21 rubles in just less than a month). The way out of the situation was protracted and difficult, and lasted for several years (it took different periods for different areas of the economy).

Asian financial crisis, 1997-1998 (one of the reasons for the Russian default). To one degree or another, it affected all states of the planet. It developed due to the very rapid growth of the economies of Asian countries, which is why they began to experience a massive influx of foreign capital. As a consequence, this led to “overheating,” sharp fluctuations in the financial and real estate markets, and subsequently to their destabilization and decline.

2008-2011. The scale and consequences of the economic crisis are comparable to the Great Depression. The collapse developed sharply in the United States, starting with the financial crisis. Having spread to the eurozone, it lasted even longer - until 2013. The crisis had little impact on the Russian segment, and its main consequences were overcome back in 2010.

Current crisis (since 2014). It was reflected in many countries by a sharp decline in the cost of oil. Sanctions that have disrupted economic relations between Western countries and the Russian Federation also have an impact.

Economic situation in Russia: a brief history of the current crisis

Since the last major crisis for Russia has not yet ended, we should dwell on it in more detail.

Economic situation in Russia

One of the first reasons for its development was the “Ukrainian events”, during which the Crimean peninsula passed from Ukraine to Russia. Also, since the first half of 2014, the Russian Federation has been regularly accused of sending troops into the Donetsk and Lugansk regions of Ukraine. There is still no evidence of these accusations, but they still continue to be voiced.

To put pressure on the “aggressor,” Western countries (the United States and a number of European countries) introduced sanctions against the Russian Federation. Restrictions affected the industrial and financial sectors, which led to a sharp deterioration in the situation due to the fact that a number of companies lost the opportunity to receive “cheap” loans abroad and buy foreign equipment (raw materials, technologies).

At the same time, oil prices began to decline rapidly. From 2012 to mid-2014 they were in the range of $100-115 per barrel, and already in December 2014 they reached $56.5 (the lowest point since 2009). After this, the price of oil did not stabilize, but fluctuated regularly, and when it fell, it reached $27.5 per barrel (for the first time since 2003).

Due to the fact that the Russian economy was largely dependent on oil exports, this quickly led to a deterioration in the economy in all its sectors (in addition to the deterioration that arose due to sanctions).

Now (at the beginning of 2017) the country from the economic crisis gradually comes out. The price of oil has stabilized and has been in the 50-57 range since the fall of 2016$ per barrel. Along with the cost of raw materials, the national currency has also stabilized - about 55-60 rubles per dollar.

How do such problems threaten the average citizen?

The crisis is not only felt by companies in various sectors of the economy. It has no less influence on the ordinary citizen. An unfavorable situation leads to the following consequences:

Wages decrease (or slow down, or their growth stops).

Purchasing power decreases (due to rising prices, decreasing wages, and the desire to save).

We have to give up the usual range of products and entertainment.

Opportunities for receiving medical care and education are deteriorating.

Jobs are being cut (this can both lead to dismissal if a person has a job, and makes it more difficult for those who are looking for one).

The selection of goods in stores is decreasing (not always, not critically, and not in all areas).

Add to this other - intangible - problems. For a population whose standard of living is falling, their mood worsens—for every citizen individually. If the situation drags on, social tension may increase: trust in the government decreases, citizens more actively express their dissatisfaction (online, at rallies).

Causes of the crisis

There are many theories and explanations of the causes of crises, but one of the most common is the Marxist version. Proposed by Karl Marx (1st volume of Capital, 1867), it quite accurately describes the essence of problematic situations in the economy. Karl Marx noted that until the end of the 18th century (before the Industrial Revolution, when production began to rapidly develop in many countries), there were no regular cycles of booms and busts in the economy.

According to this theory, crisis is an integral part of the capitalist economy. No matter how stable, reliable and balanced the economic system of the state is, crisis situations still happened in it, are happening and will continue to happen. They can be “tamed,” their impact can be weakened, and they can be made more rare, but they cannot be completely eliminated.

Distributing free food to the unemployed during the Great Depression (USA)

According to the author, this is explained by the fact that any capitalist (owner of an enterprise) strives to increase profits. To do this, you need to sell as many goods as possible at the lowest cost of production. That is, the volume of production is reached to the maximum.

However, no one controls the balance between the total cost of goods produced and the real wages of the population (which always receives less than it produces - otherwise the capitalist would not make a profit). As a result, over time, this leads to the production owner’s profit falling.

To avoid this, he begins to take active steps that are aimed either at increasing the volume of goods or at further reducing production costs. When this does not help, layoffs begin at enterprises until they go bankrupt. As a result, unemployment is growing, and competitors are trying to take over the vacated market space, who will then face the same problems.

To summarize, every new economic crisis arises due to a lack of balance between the production and consumption of goods and services.

If we evaluate more narrowly, then among the causes of problems we can highlight:

Uncontrolled growth of inflation.

Focus on one sector of the economy and insufficient attention to other areas.

Political instability.

Errors in management.

Obsolescence of production.

The production of uncompetitive products that are inferior to imported goods, and at the same time cost no less (or not much less) than them.

Ways out of the crisis

TO Each crisis situation is individual, and therefore there is no single “recipe” for overcoming it. However, we can summarize several basic steps that the authorities need to take to solve the problem:

Diversification of budget funds: creating the maximum number of ways to generate income. In this case, due to a fall in production in one industry (as in oil prices now in Russia), the economy as a whole will suffer less.

Creation of jobs - to increase employment of the population. This is useful for the budget because more funds will come in in the form of taxes, and, in addition, the population will spend more, stimulating production. To create jobs, it is necessary to maintain a conducive environment for doing business.

Containing inflation.

Financial control: exchange rate, interest rate.

Informing the population and enterprises: about the current situation, forecasts and prospects, recommendations for overcoming problems.

Updating the industrial sector: equipment, technologies.

Support for key sectors of the economy, if necessary - adjustment of budget distribution (reducing costs for less important sectors and increasing costs for more important ones).

On the development and causes of financial crises (video)