Macroeconomic equilibrium is a state of the national economy when the use of limited production resources to create goods and services and their distribution among various members of society are balanced, i.e. there is an overall proportionality between:

Resources and their use;

Factors of production and the results of their use;

Total production and total consumption;

Aggregate supply and aggregate demand;

Material, material and financial flows.

Consequently, macroeconomic equilibrium presupposes the stable use of their interests in all spheres of the national economy.

Such balance is an economic ideal: without bankruptcies and natural disasters, without socio-economic upheavals. In economic theory, the macroeconomic ideal is the construction of general equilibrium models of the economic system. In real life, various violations of the requirements of such a model occur. But the importance of theoretical models of macroeconomic equilibrium makes it possible to determine specific factors of deviations of real processes from ideal ones and to find ways to realize the optimal state of the economy.

For macroeconomics, equilibrium means equality between aggregate demand and aggregate supply. At the same time, for macroeconomics, the optimal state is when aggregate demand coincides with aggregate supply (Fig. 1). It is called macroeconomic equilibrium and is achieved at the intersection point of the aggregate demand (AD) and aggregate supply (AS) curves.

The intersection of the aggregate demand and aggregate supply curves determines the equilibrium price level and the equilibrium real volume of national production. It means that at a given price level (P E), the entire produced national product (Y E) will be sold. One thing to keep in mind here is the ratchet effect, which is that prices go up easily but are difficult to go down. Therefore, when aggregate demand decreases, prices cannot be expected to fall over a short period. Producers will respond to a decrease in aggregate demand by reducing production and only then, if this does not help, lower prices. The prices of goods and resources, once increased, do not immediately fall when aggregate demand decreases.

Figure 1 Macroeconomic equilibrium

The following signs of macroeconomic equilibrium can be distinguished:

correspondence between public goals and real economic opportunities;

full use of all economic resources of society - land, labor, capital, information;

balance of supply and demand in all major markets at the micro level;P posted on Allbest.ru

free competition, equality of all buyers in the market;

immutability of economic situations.

There are general and particular macroeconomic equilibrium. General equilibrium means such a state of the economy as a whole when there is a correspondence (coordinated development) of all spheres of the economic system, taking into account the interests of society and its members, that is, overall proportionality and proportionality between the most important parameters of the formation of the macroeconomy: factors of economic growth and their use; production and consumption, consumption and accumulation, demand for goods and services and their supply; material and financial flows, etc.

In contrast to general (macroeconomic) equilibrium, which covers the economic system as a whole, private (local) equilibrium is limited to the framework of individual aspects and spheres of the national economy (budget, monetary circulation, etc.). General and particular equilibrium are relatively autonomous. Thus, the absence of partial equilibrium in any link of the economic system does not mean that the latter as a whole is not in equilibrium. And vice versa, the lack of equilibrium in the economic system does not exclude the lack of equilibrium in its individual links. However, the known independence of general and private equilibrium does not mean that there is no relationship and internal unity between them. After all, the state of the macroeconomic system as a whole cannot but influence the functioning of its individual parts. In turn, processes in local spheres cannot but have a certain impact on the state of the macroeconomic system as a whole.

As a condition for general (macroeconomic) equilibrium in the economy, we can distinguish: firstly, the correspondence of social goals and capabilities (material, financial, labor, etc.); secondly, full and effective use of all factors of economic growth; thirdly, the correspondence of the production structure to the consumption structure; fourthly, market equilibrium, the balance of aggregate supply and demand in the markets of goods, labor, services, technologies and loan capital, which must interact with each other.

The actual macroeconomic equilibrium of the entire system, not subject to spontaneous processes, inflation, decline in business activity and bankruptcies, is ideal, theoretically desirable. Such equilibrium is characterized by the complete optimality of the implementation of economic behavior and interests of subjects in all structural elements, sectors and areas of the macroeconomy. However, to ensure this balance, a number of reproduction conditions must be met (all individuals can find consumer goods on the market, and entrepreneurs can find factors of production, the entire social product must be sold, etc.). In the economic life of society, these conditions are usually not met. Therefore, there is a real macroeconomic equilibrium, which is established in the economic system under conditions of imperfect competition and external factors influencing the market.

However, ideal economic equilibrium, which is abstract in nature, is necessary for scientific analysis. This macroeconomic equilibrium model makes it possible to determine deviations of real processes from ideal ones, to develop a system of measures to balance and optimize reproduction proportions.

Thus, all economic systems strive for an equilibrium state. But the degree to which the state of the economy approaches the ideal (abstract) macroeconomic equilibrium model depends on the socio-economic, political and other objective and subjective conditions of society.

The following models of macroeconomic equilibrium are distinguished: classical and Keynesian.

Classical macroeconomic equilibrium model dominated economic science for about 100 years, until the 30s of the 20th century. It is based on J. Say's law: the production of goods creates its own demand. Each manufacturer is at the same time a buyer - sooner or later he purchases goods produced by another person for the amount received from the sale of his own goods. Thus, macroeconomic equilibrium is ensured automatically: everything that is produced is sold. This similar model requires the fulfillment of three conditions:

every person is both a consumer and a producer;

all producers spend only their own income;

the income is completely spent.

But in the real economy, part of the income is saved by households. Therefore, aggregate demand decreases by the amount saved. Consumption expenditures are insufficient to purchase all products produced. As a result, unsold surpluses are created, which causes a decline in production, increased unemployment and a decrease in income.

In the classical model, the lack of funds for consumption caused by savings is compensated by investment. If entrepreneurs invest the same amount as households save, then Say’s law applies, i.e. the level of production and employment remains constant. The main task is to encourage entrepreneurs to invest as much money as they spend on savings. It is decided in the money market, where supply is represented by savings, demand by investments, and price by interest rates. The money market self-regulates savings and investments using the equilibrium interest rate (Fig. 2).

The higher the interest rate, the more money is saved (because the owner of the capital receives more dividends). Therefore, the saving curve (S) will be upward sloping. The investment curve (I), on the other hand, is downward sloping because the interest rate affects costs and entrepreneurs will borrow and invest more money at a lower interest rate. The equilibrium interest rate (r 0) occurs at point E. Here the quantity of money saved equals the quantity of money invested, or in other words, the quantity of money supplied equals the demand for money.

Figure 2 Classic model of the relationship between investment and savings

The second factor ensuring equilibrium is the elasticity of prices and wages. If for some reason the interest rate does not change at a constant ratio of savings and investment, then the increase in savings is compensated by a decrease in prices, as producers seek to get rid of surplus products. Lower prices allow fewer purchases to be made while maintaining the same level of output and employment.

In addition, a decrease in the demand for goods will lead to a decrease in the demand for labor. Unemployment will cause competition and workers will accept lower wages. Its rates will decrease so much that entrepreneurs will be able to hire all the unemployed. In such a situation, there is no need for government intervention in the economy.

Thus, classical economists proceeded from the flexibility of prices, wages, and interest rates, i.e., from the fact that wages and prices can freely move up and down, reflecting the balance between supply and demand. In their opinion, the aggregate supply curve AS has the form of a vertical straight line, reflecting the potential volume of GNP production. A decrease in price entails a decrease in wages, and therefore full employment is maintained. There is no reduction in the value of real GNP. Here all products will be sold at different prices. In other words, a decrease in aggregate demand does not lead to a decrease in GNP and employment, but only to a decrease in prices. Thus, classical theory believes that government economic policy can only affect the price level, and not output and employment. Therefore, its interference in regulating production and employment is undesirable.

The classics concluded that in a market self-regulating economy. Capable of achieving both full output and full employment, government intervention is not required; it can only be detrimental to its effective functioning.

Summarizing the above, we can conclude that the classical model of equilibrium production volume, based on J. Say’s law, assumes:

Absolute elasticity, flexibility of wages and prices (for factors of production and finished products);

Emphasizing aggregate supply as the engine of economic growth;

Equality of savings and investments achieved through free pricing in the money market;

The tendency for the volume of aggregate supply to coincide with the potential capabilities of the economy, therefore the aggregate supply curve is represented by a vertical line;

The ability of a market economy, with the help of internal mechanisms, to self-balance aggregate demand and aggregate supply at full employment and full use of other factors of production.

Keynesian model.

In the early 30s of the 20th century, economic processes no longer fit within the framework of the classical model of macroeconomic equilibrium. Thus, a decrease in wages did not lead to a decrease in unemployment, but to its increase. Prices did not decrease even when supply exceeded demand. It is not without reason that many economists criticized the positions of the classics. The most famous of them is the English economist J. Keynes, who in 1936 published the work “The General Theory of Employment, Interest and Money,” in which he criticized the main provisions of the classical model and developed his own provisions for macroeconomic regulation:

1. savings and investment, according to Keynes, are carried out by different groups of people (households and firms), guided by different motives, and therefore they may not coincide in time and in size;

2. The source of investment is not only household savings, but also funds from credit institutions. Moreover, not all current savings will end up in the money market, since households leave some money on hand, for example, to pay off bank debt. Therefore, the amount of current savings will exceed the amount of investment. This means that Say’s law does not apply and macroeconomic instability sets in: excess savings will lead to a reduction in aggregate demand. As a result, output and employment decline;

3. the interest rate is not the only factor influencing decisions about savings and investment;

4. lowering prices and wages does not eliminate unemployment.

The fact is that the elasticity of the price-wage ratio does not exist, since the market under capitalism is not completely competitive. Monopolistic producers prevent price reductions, and trade unions prevent wages. The classic assertion that lowering wages in one firm would allow it to hire more workers turned out to be inapplicable to the economy as a whole. According to Keynes, a decrease in wages causes a decline in income for the population and entrepreneurs, which leads to a decrease in demand for both products and labor. Therefore, entrepreneurs will either not hire workers at all, or will hire a small number.

So, the Keynesian theory of macroeconomic equilibrium is based on the following provisions. The growth of national income cannot cause an adequate increase in demand, since an increasing share of it will go to savings. Therefore, production is deprived of additional demand and is reduced, causing unemployment to rise. Therefore, an economic policy is needed that stimulates aggregate demand. In addition, in conditions of stagnation and depression of the economy, the price level is relatively stationary and cannot be an indicator of its dynamics. Therefore, instead of price, J. Keynes proposed introducing the “sales volume” indicator, which changes even at constant prices, because it depends on the quantity of goods sold.

Keynesians believed that the government could promote GDP growth and employment growth by increasing government spending, which would increase demand and keep prices almost unchanged as output increased. With an increase in GNP, there will be an increase in employment. Consequently, in the model of J. Keynes, macroeconomic equilibrium does not coincide with the potential use of production factors and is compatible with a fall in production, the presence of inflation and unemployment. If a situation of full use of production factors is achieved, then the aggregate supply curve will take a vertical form, i.e. actually coincides with the long-term AS curve.

Thus, the volume of aggregate supply in the short run depends mainly on the amount of aggregate demand. In conditions of underemployment of production factors and price rigidity, fluctuations in aggregate demand cause, first of all, changes in the volume of output (supply) and only subsequently can they be reflected in the price level. Empirical data confirms this position.

We can conclude that the most important provisions in the Keynesian theory of macroeconomic equilibrium are the following:

The most important factor determining the level of consumption, and, consequently, the level of savings, is the amount of income received by the population, and the level of investment is mainly influenced by the interest rate. Since savings and investments depend on different and independent variables (income and interest rates), there may be a discrepancy between investment plans and savings plans;

Since savings and investments cannot automatically balance, i.e. in a market economy there is no mechanism that independently ensures economic stability; state intervention in the economic life of society is necessary;

The engine of economic growth is effective aggregate demand, since in the short term, aggregate supply is a given value and is largely oriented toward expected aggregate demand. For this reason, the state must, first of all, regulate the required volume of effective demand.

To summarize, we can conclude that both the classics and Keynesians did a lot to understand macroeconomic equilibrium, but, unfortunately, as practice has shown, the macroeconomic equilibrium models they built were valid only for a short period of time, which, in my opinion, is not surprising, since even economic laws are objective, but any decision in economics, one way or another, is made by people, and they are subjective. Therefore, much more will have to be done to create conditions for the macroeconomic balance to be maintained.

Value added method.

Methods for calculating GNP or GDP

GNP/GDP calculated by expenditures GNP/GDP calculated by income

Consumer expenditures (C) Wages (w)

Gross Private Investment (Ig) Percentage (r)

Government procurement of goods and services (G) Rent (R)

Net Exports (NX) Profit (P)

Depreciation (d)

Indirect taxes (T)

Both methods are considered equivalent and should ultimately yield the same value of GNP or GDP.

Along with calculating GNP (GDP) based on expenses and income, there is a third method of calculating it, based on the concept of value added.

Added value is the value created in the production process at a given enterprise and covers the real contribution of the enterprise to the creation of the value of a particular product, i.e. wages, profits and depreciation of a particular enterprise.

Therefore, the cost of consumed raw materials and materials that were purchased from suppliers and in the creation of which the enterprise did not participate is not included in the added value of the product produced by this enterprise.

All indicators in the SNA system are calculated in current market prices. Therefore, based on GNP or GDP indicators, the nominal value of the total annual production volume is estimated. Nominal GNP or GDP is GNP or GDP calculated at current prices. Nominal GNP or GDP changes every year for two reasons. The first is that the physical volume of output of goods changes. The second reason is changes in market prices. Real GNP is the actual volume of output calculated in base year prices. An indicator characterizing the rate of growth of market prices of the current year compared to the base one is called the price level (index) or GNP deflator (GDP). The terms “GNP deflator” or “GDP deflator” are used when talking about converting nominal values ​​into real ones.

Topic 10. Macroeconomic equilibrium and

deviations from it[:]

LECTURE PLAN:

1. Aggregate demand and aggregate supply. Macroeconomic equilibrium.

2.The essence of unemployment and employment. Types, forms and causes of unemployment

3. Inflation: essence, types, causes and consequences.

SEMINAR PLAN:

1. Aggregate demand and aggregate supply. Macroeconomic equilibrium.

2. The essence of unemployment and its types.

3. Inflation. Anti-inflationary regulation of the economy

Aggregate demand is the demand for the total volume of goods and services that can be supplied at a given price level. Aggregate supply is the total quantity of goods and services that can be produced and offered in accordance with the prevailing price level. They can be measured in current or constant prices, depicted in the form of a model (curve, graph). Aggregate demand has two forms: physical and cost.

The natural-material form of aggregate demand reflects the social need of the population, firms and the state for goods and services. Its structure can be represented by: firstly, certain types of products and services of non-productive consumption that satisfy personal and other non-productive needs; secondly, the totality of all means of production and production services (research and development aimed at improving technology; information serving production; communications, etc.).

Aggregate demand is equal to the total amount of demand for final products: Y d =C + I + G + NX, where

C – household consumer expenditures;

I – investment expenditures of the private sector;

G - government procurement;

NX - net exports - the difference between foreigners' demand for domestic goods and domestic demand for foreign goods.

The aggregate demand curve AD (from English aggregate demand) shows the quantity of goods and services that consumers are willing to purchase at each possible price level. It gives such combinations of output and the general price level in the economy at which the commodity and money markets are in equilibrium.

Aggregate demand, being inversely related to price, decreases under the influence of a number of factors. These include the following:

1. “Interest rate effect.” Increasing the interest rate level, i.e. loan usage prices. The fact is that an increase in the price level forces both consumers and producers to borrow money. This circumstance increases the interest rate. Therefore, buyers are postponing their purchases, and entrepreneurs are reducing investments. As a result, aggregate demand decreases.

2 “Cash balance effect”, or “wealth effect”. Rising prices reduce the real purchasing power of accumulated financial assets with a fixed value (bonds, fixed-term accounts), which makes their owners poorer and encourages them to cut spending.

3. “The effect of imported goods.” Rising prices within the country with stable import prices shifts part of the demand from domestic goods to imported goods and reduces exports, which reduces aggregate demand in the economy.

Aggregate supply is the sum of all final goods and services produced in a country that firms are willing to offer to the market during a certain period at each possible price level (in value terms). In other words, this is the real volume of national production at various values ​​of the price index for final goods and services. This concept is often used as a synonym for gross national, or domestic product.

The aggregate supply curve, AS (from the English aggregate supply), shows what volume of aggregate output can be offered to the market by entrepreneurs at different values ​​of the general price level in the economy.

AS can be equated to the value of GNP or to the value of GDP.

AS = GNP = GDP

The ability of an economy to produce a particular volume of goods and services is influenced by the quantity and quality of the factors of production used (land, labor, capital).

AS = salary + rent + interest + profit.

The nature of the influence of the price level on the volume of national production and, consequently, the shape of the aggregate supply curve depends critically on the length of time under consideration. Therefore, we must distinguish between long-run and short-run aggregate supply curves.

In addition to the price level, the volume of national production is influenced by many non-price factors, under the influence of which the aggregate supply curve can shift to the left or to the right. These factors include: changes in the volume of resources used, changes in resource productivity, and changes in taxes and subsidies.

Macroeconomic equilibrium in the goods market occurs when aggregate demand equals aggregate supply. The relationship between aggregate demand and aggregate supply determines the levels of real GNP and prices established in a given period. General equilibrium is achieved at the intersection point of AD and AS, and means that sellers and buyers are satisfied, i.e. the price level is such that buyers are willing to buy exactly as much as sellers are willing to produce and sell. In real life, equilibrium often turns into disequilibrium. Let's consider deviation options.

1. Let us assume that aggregate demand exceeds aggregate supply: AD > AS. To achieve balance, there are two options:

2. - without changing production volume, increase prices;

Expand production.

Practice shows that firms follow the second path. But increasing production output leads to higher production costs and higher prices. Therefore, the new equilibrium point will correspond to higher values ​​of output and price level. The economy will experience growth in the national product.

3. Let’s assume that aggregate demand is less than aggregate supply: AD< AS. Здесь также возможны два варианта: сократить производство и оставить выпуск без изменения, но понизить цены.

In this situation, entrepreneurs will reduce production and sell their products at competitive prices. If the goal is not achieved, then, without changing the scale of production, entrepreneurs will gradually reduce prices. This will continue until the layoffs of workers begin. As a result, the national product will decline.

Macroeconomic equilibrium - This is a state of the national economy when the use of limited economic resources to create goods and services and their distribution among various members of society are balanced, i.e. there is an overall proportionality between resources and their use; factors of production and the results of their use; production and consumption; supply and demand; material and financial flows. Achieving complete equilibrium is an economic ideal, since in real life economic crises and incomplete or inefficient use of resources are inevitable. In economic theory, the macroeconomic ideal is the construction of general equilibrium models of the economic system.

Macroeconomic models are formalized (logical, graphical) descriptions of various economic phenomena and processes in order to identify functional relationships between them. Despite the fact that in practice there are various violations of the requirements of such a model, knowledge of theoretical models of macroeconomic equilibrium allows us to determine specific factors of deviations of real processes from ideal ones and find ways to realize the most optimal state of the economy. In economic science, there are quite a lot of models of macroeconomic equilibrium, reflecting the views of different directions of economic thought on this problem:

• F. Quesnay's model of simple reproduction using the example of the French economy of the 18th century;
• classical model of macroeconomic equilibrium;
• model of general economic equilibrium under conditions of perfect competition by L. Walras;
• schemes of capitalist social reproduction (model of K. Marx);
• J. Keynes's short-term economic equilibrium model;
• input-output model by V.V. Leontiev.

Aggregate demand and aggregate supply

When developing macroeconomic equilibrium models, significant development, along with the construction of market-structured models (L. Walras model), was given to an approach that analyzes the conditions for ensuring equality between aggregate demand and aggregate supply in the national economy. To reveal the patterns of macroeconomic equilibrium, it is necessary, first of all, to formulate the concepts of aggregate demand and aggregate supply, since all changes in the national economy are associated with their changes.

Aggregate demand

Under aggregate demand refers to the sum of all individual demands for final goods and services offered on the product market. Aggregate demand consists of consumer spending (aggregate household demand), investment spending by businesses, government spending, and net export spending. Some elements of aggregate demand are relatively stable, such as consumer spending; others are more dynamic, particularly investment spending. The aggregate demand curve (Figure 12.1) shows the quantity of goods and services that consumers are willing to purchase at the appropriate price level. It will give such options for combining the volume of production of goods and services and the general price level in the economy, at which

Rice. 12.1.

of which the commodity and money markets are in equilibrium.

In macroeconomics, the level of aggregate demand as aggregated monetary demand on the elements of GNP is influenced by two main factors: the amount of money in the economy (M) and the speed of its turnover (V). The influence of all other factors of demand for an individual product ultimately comes down to changes in these factors. The negative slope of the aggregate demand curve can be explained as follows: the higher the price level (P), the lower the real cash reserves (M/R), and, consequently, the quantity of goods and services for which demand is lower (Q). The inverse relationship between the amount of aggregate demand and the price level is also associated with the interest rate effect, the wealth effect and the effect of import purchases. Thus, when prices rise, the demand for money and the interest rate increase. An increase in the cost of credit leads to a decrease in consumer and investment spending and, accordingly, to a decrease in the volume of aggregate demand. Rising prices also reduce the real purchasing power of accumulated financial assets with a fixed value (bonds, fixed-term accounts) and encourage their owners to reduce expenses. An increase in prices within the country, while import prices remain unchanged, shifts part of the demand from domestic goods to imported goods and reduces exports, which also leads to a fall in aggregate demand in the economy.

When analyzing general economic equilibrium, an important role is played by consideration of the relationship between the national product and the main components of aggregate demand. As the monetary income of the population grows, which is a factor in aggregate demand, saving. They can be represented as the difference between income and consumption (consumer spending). In economic theory, to analyze the role of consumption and savings in ensuring macroeconomic equilibrium, the concepts of consumption and savings functions were introduced. Consumption function shows the ratio of consumer spending to income in their dynamics. The same is considered and the saving function, which shows the ratio of family savings to its income in their dynamics. The trend in changes in the amount of consumption of the population as income grows is characterized by the marginal propensity to consume: it shows what part of the additional income goes to increase consumption. By analogy, the marginal propensity to save shows what part of the additional income the population uses for additional savings when the amount of income changes. Obviously, the main factor influencing consumption and saving levels is income. In addition, taxes, prices for goods and services, and the volume of supply in the market influence consumption and savings.

Aggregate offer

This is the sum of all individual offers. Total supply represents the monetary value of the total amount of all final goods and services offered for sale. It consists of wages, rent, interest and profit. The aggregate supply curve shows what volume of aggregate output can be offered to the market by producers at certain values ​​of the general price level in the economy (Fig. 12.2). The shape of the aggregate supply curve is interpreted differently by the classical and Keynesian schools.

Rice. 12.2.

Segment I characterizes supply under conditions of under-employment, segment III determines aggregate supply at full employment, and segment II characterizes supply under conditions approaching full employment.

The aggregate supply is influenced by the same factors (technical and technological base of production, production costs) that cause changes in the market for an individual product.

Macroeconomic equilibrium presupposes equality of the volume of aggregate demand and aggregate supply. In reality, there are quite a lot of options for changes in aggregate demand and aggregate supply. Thus, with an increase in aggregate demand, prices, production volumes, and national income increase. A decline in aggregate demand is accompanied by a decline in prices, output and national income. Increasing aggregate supply leads to increased production and lower prices. The reduction in supply, as well as production volume, is accompanied by an increase in prices. Thus, as a result of constant fluctuations in aggregate demand and aggregate supply, equilibrium at the macro level is very rarely achieved. The problem of achieving macroeconomic equilibrium by the national economy is considered by representatives of various areas of economic science, as already noted, in different ways.

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The intersection of the aggregate demand curves AD and aggregate supply AS gives the point of general economic equilibrium (N). The conditions of this equilibrium will be different depending on the segment on which the aggregate supply curve AS intersects with the aggregate demand curve AD (Fig. 4.3).

Rice. 4.3. Equilibrium between aggregate demand and aggregate supply

The intersection of the AD and AS curves at point N reflects the correspondence of the equilibrium price to the equilibrium production volume.

If the equilibrium is disturbed, the market mechanism will equalize aggregate demand and aggregate supply; The price mechanism will work first.

This model has two options:

1) aggregate supply exceeds aggregate demand. In this case, the sale of goods is difficult, inventories increase, production growth slows down, and production may begin to decline;

2) aggregate demand exceeds aggregate supply. Then the opposite situation occurs: inventories are reduced, and unsatisfied demand stimulates production growth.

Economic equilibrium presupposes a state of the economy when all the economic resources of the country are used. Equilibrium means that the overall structure of production is brought into line with the structure of consumption. The condition for market equilibrium is the balance of supply and demand in all major markets. Changes in equilibrium occur when aggregate demand or aggregate supply increases (or decreases). Graphically, changes in equilibrium are reflected by shifts in the aggregate demand (AD) or aggregate supply (AS) curves.

Let us consider changes in equilibrium with an increase in aggregate demand on three segments of the aggregate supply curve.

An increase in aggregate demand on the horizontal (Keynesian) segment will lead to an increase in the level of employment and, accordingly, to an increase in the volume of real national product.

The intersection of the AS and AD curves in the short-term segment (intermediate segment) means that the economy is in short-term equilibrium, in which the price level for final products and the real national product is established on the basis of equality of aggregate demand and aggregate supply. Equilibrium in this case is achieved as a result of constant fluctuations in supply and demand. An increase in aggregate demand will entail both an increase in real output and an increase in the price level. If demand AD exceeds supply AS, then to achieve an equilibrium state it is necessary either to increase prices at constant production volumes or to expand production output. If supply AS exceeds demand AD, then production should either be reduced or prices should be lowered.

An increase in aggregate demand in the classic (vertical) segment does not affect the volume of real output, since this segment implies full employment. In this case, prices will only rise.

As a result of the above, the question arises: how long can equilibrium in the economy be maintained, if we imagine that it has been achieved? With changes in the phases of the economic cycle, market conditions, and incomes in society, shifts in demand occur. All this indicates that the equilibrium state cannot remain unchanged for long. Coordination of supply and demand, the interrelation of the main elements of the national economy can only be achieved in dynamic development, and short-term (current) equilibrium is only its prerequisite.

Equilibrium in the economy is a state of the system to which it constantly returns in accordance with its own laws. In the event of a violation of the equilibrium state, the general direction of the process becomes significant, i.e. It is important to know whether macroeconomic disequilibrium is increasing or decreasing.

Another macroeconomic model that reflects the relationship between aggregate demand and aggregate supply is the Keynesian “Income - Expenses” model. Over the course of several decades of the 20th century. The macroeconomic policy of the leading countries of the world was based on the theory of J. M. Keynes, according to which the main cause of economic crises is the insufficiency of aggregate demand. The insufficiency of aggregate demand was caused by two main reasons:

1) the action of the basic psychological law, according to which, as income grows, people increase the share of it that goes to savings. To describe this pattern, indicators of propensity to consume and save are used:

The marginal propensity to consume (MPC = ΔС: ΔУ) shows the change in the amount of consumption depending on changes in income,

The marginal propensity to save (MPS = ΔS: ΔY) determines the change in the amount of savings depending on changes in income;

2) low rate of return on capital due to high interest rates (this reduces investment demand from firms).

Under these conditions, the state’s task is to compensate for the fall in aggregate demand through government spending.

In the Keynesian Income-Expenditure model, market equilibrium is achieved when total expenditure AE equals total income NI (national income), and NI = DI (disposable income).

We denote NI = DI by Y. The expenditure flow represents aggregate demand, and the income flow represents aggregate supply. To build a model, it is necessary to write down the following equalities: AE = Y, AD = AE, AS = Y,

We abstract from G and NX (demand from the state and the external market).

Hence,

We build a coordinate system (Fig. 4.4).

Rice. 4.4. Equilibrium model "Income - expenses"

To determine the equilibrium point, it is necessary to draw a line at an angle of 45°. All points on this line are in equilibrium - expenses are equal to income. To find the equilibrium point we need, we need to build a consumption line:

Let's construct line C. Let's take Y to zero. Then C will equal C exogenous (100). Let's give Y, for example, a value of 200 units. Then C= 100+ (0.8x200) = 260.

The point where the consumption line intersects the 45° line is called the critical point at which all income is consumed. At consumption values ​​above this point, part of the income goes to savings. If consumption exceeds disposable income (the area located to the left of the critical point), then it is carried out partly due to previous savings.

Now you need to draw a savings line and find the point where investment equals savings. We build a savings line S = Sex + MPS x Y. At Y = 0, this line will pass through point (-C), since all savings will go to consumption. Where the critical point is projected onto the OX axis, S = 0.

Now you need to find the point of intersection of the savings line with the investment line. Investment demand is quite volatile. Its size is determined by the expected rate of net profit, the real interest rate, production technology, the level of taxation and other factors. In our example, we will make the assumption that investment demand is equal to 50 units. at all income levels. By projecting the point of intersection of line S and line I onto a line at an angle of 45°, we will find the equilibrium point. The straight line AE = C + I will also pass through this point (parallel to line C).

Determining the general equilibrium point is necessary to predict economic development. If actual national income is currently less than the equilibrium income, we can assume that the economy will expand. If the national income exceeds the equilibrium level, it can be assumed that there will be a reduction in production in the future. The question arises by how much will national income change as a result of changes in spending?

The expenditure multiplier is a numerical coefficient showing how many times the final amount of increase or decrease in planned expenditures that form the national income will exceed the initial amount of expenditure.

Simple multiplier formula:

Let's look at the multiplication process using a simple example. Let's say investments in society increased by 1000 units. On the one hand, these are expenses, on the other, income. This money materializes in the form of labor, equipment, raw materials and other goods. The owners of these factors of production will receive an income also equal to 1000 units. At MPC = 0.8, they will allocate 800 units for consumption and 200 units for savings; 800 units also for some they will become expenses, and for others - income (Table 4.1).

As a result, the initial investment of 1000 units led to an increase in national income to 5000 thousand units (with a multiplier of 1: 0.2 = 5), i.e. 1000 x 5 = 5000.

The principle of acceleration is closely related to the animation process. Its essence lies in the fact that income growth as a result of the multiplying effect of initial investments causes an increase in demand for consumer goods, which in turn causes an increase in demand for means of production, and to a much greater extent. This is due to the fact that enterprise equipment (fixed capital) is expensive and requires significant capital expenditures.

A measure of the scale of acceleration is the accelerator - a numerical multiplier by which each monetary unit of incremental income increases investment. It is calculated by the formula:

It should be noted that the principles of animation and acceleration have a two-way effect. An increase in savings by the population in conditions of underemployment and insufficient demand gives rise to the “paradox of thrift” - savings and investments in society as a whole decrease. Even a small reduction in investment has the opposite multiplying effect - a multiple reduction in national income. The action of the accelerator can also generate not only an upward trend in investment spending, but also lead to a fall in demand for fixed capital, subject to a decrease in the growth rate of demand for consumer goods.

Researchers explain the processes of expansion and contraction of business activity by a combination of the action of a multiplier and an accelerator and believe that it is possible to find a combination of these coefficients that will ensure undamped economic growth.

(Materials are based on: E.A. Maryganova, S.A. Shapiro. Macroeconomics. Express course: textbook. - M.: KNORUS, 2010. ISBN 978-5-406-00716-7)