Doctor of Economic Sciences I. OSADCHAYA.

Inflation is a steady rise in prices, which ultimately depreciates the value of money, income and savings of the population. even the weakest inflation is fraught with enormous dangers for the development of a modern monetary economy. It is no coincidence that in the economic policies of all countries (including the most developed) anti-inflationary measures - primarily monetary measures aimed at limiting the growth of money supply - are of paramount importance. The famous English economist J.M. Keynes wrote back in the 20s of the last century (mainly under the influence of colossal post-war inflation in Germany, defeated in the First World War): “there is no more cunning, and at the same time more sure way to overthrow the existing social order than the depreciation of money.”

Science and life // Illustrations

After the currency reform in Germany (1923), junk dealers bought old banknotes by weight.

When inflation sweeps goods off store shelves, a line can line up for men's hats. Drawing by Danish cartoonist H. Bidstrup. 1950s.

Dynamics of the consumer price index in 1992 - 2001. For almost two years (from mid-1992 to mid-1994), the monthly growth rate of consumer prices exceeded 15%.

Annual growth rate of the consumer price index (CPI) in 2000-2008.

On the conveyor belt is Druzhba processed cheese, one of the great brands of the Soviet era, when prices for all goods were fixed.

Share of social expenditures in GDP as a percentage (2006). Data for developed countries do not include spending on education, which reaches 5-6% of GDP. In Russia, these expenses amount to 1.3% of GDP.

CAUSES OF INFLATION AND HOW TO FIGHT IT

Inflation is a monetary phenomenon associated with an excessive release of money into circulation compared to the supply of goods. However, this increase in money occurs for various reasons. And the first of them is the growth of household incomes, which is not supported by a corresponding increase in the production of goods. This is how excess demand appears, pushing prices up - a phenomenon that is especially clearly manifested in a war economy. In this case, it is customary to talk about “demand inflation”.

Inflation is also caused by an increase in costs, which entails a rapid increase in prices for some goods or services of natural monopolies, for example, utilities. Then they talk about “cost-push inflation.” True, it is almost impossible to separate these two processes in real life, and debates about what came first - “the chicken or the egg,” demand or costs,

Often they don't make sense. Both processes are interconnected. An increase in costs, and therefore prices, requires compensation for the dwindling income of the population (salaries, pensions, benefits, etc.). The new injection of money into the economy, in turn, increases demand, putting pressure on prices. And everything repeats itself in a new round of the vicious inflationary spiral.

Inflation can take many forms. In a regulated economy, primarily a planned, command economy (such as existed in the USSR), as well as in wartime conditions, when prices are fixed, it can be of a hidden nature - this is the so-called suppressed inflation. Its companions include a shortage of many products, a surge in shadow trade, a sharp increase in prices in markets, etc. However, the abolition of such regulation (after a war or in countries that have transitioned from an administratively regulated to a market economy) often gives rise to “galloping inflation” with wildly rising prices. It arises due to the so-called huge “money overhang,” in other words, the discrepancy between the cash supply of money and the insufficient quantity of goods.

Inflation is sometimes expressed in a relatively slow, almost imperceptible rise in prices - it is called creeping. However, the long-term consequences of such inflation have a very harmful impact on the state of the monetary system and the well-being of the population.

During periods when demand begins to exceed supply, inflation tends to increase. However, there are known periods (for example, the 70s of the twentieth century in developed countries) when inflation and a decline in economic growth rates combined into a new phenomenon called “stagflation” (stagnation plus inflation).

The so-called waiting moments play a significant role in the development of the inflation process. The expected rise in prices pushes the population to buy goods. This creates an artificial shortage of some of them, and consequently, prices rise, which forces them to demand in advance an increase in wages (in the presence of a system of collective agreements). This kind of inflationary expectation is especially difficult to bring down.

Representatives of the main directions of modern economic theory differ in their assessment of the role of one or another cause generating inflation. Hence the differences in the proposed recipes for anti-inflationary policy.

Among theorists, primarily Western ones, the most common explanation for inflation is an excessive increase in the money supply. Proponents of this point of view - monetarists - proceed from the quantity theory of money. Here is its essence: any increase in the money supply that exceeds the growth rate of the gross national product inevitably gives rise to an increase in prices. What are the reasons for such inflation? In the expansionary monetary policy of the central bank and the growth of government spending. Hence the methods of anti-inflationary “treatment” proposed by monetarists: reduction of budget expenditures and strict monetary restrictions. The main task of the central bank, in their opinion, is to maintain stable prices and stability of the monetary system, allowing the growth of money supply only in accordance with GDP growth.

This, according to monetarists, is the main “rule” that the government must follow, regardless of the nature of the economic situation and the level of unemployment, which require an increase in government spending to revive the economy and stimulate production growth.

This group of theorists is joined by supporters of the so-called institutional theories, who believe that the main cause of inflation is excessive government spending - it is generated by the interests of certain groups of the population, political parties and the ruling bureaucracy. The main counteraction to inflation, in their opinion, is freedom of competition, free market relations and, above all, limiting the growth of state intervention in the economy, while the state bureaucracy is vitally interested in the opposite. Therefore, such a bureaucracy cannot be expected to truly control or limit this growth. Consequently, such restrictions must be introduced in the form of constitutionally enshrined rules that would protect the market system from the distorted influence of excessive redistributive activities of the state.

There is also the Keynesian theory of inflation, which is also associated with the pressure of monetary demand. However, according to this theory, not every increase in money demand causes inflation. On the contrary, an increase in the amount of money in circulation when there is underemployment, high unemployment and significant underutilization of production capacity in a country can, according to Keynes, stimulate production growth without affecting prices. True inflation appears when there is full employment of human and production resources. Then a further increase in money demand leads not to an increase in production, but in prices, that is, to inflation.

Other economists focus on the role of costs. They see the key element driving the inflationary spiral (costs - prices - costs) not so much in wages, but in the policy of trade unions, which, when concluding agreements with entrepreneurs, seek special clauses on a possible increase in wages if inflation rates increase - that is, about its indexing. But the fact is that large corporations easily translate rising wage costs into prices. Thus, the mechanism of continuous price increases is built into the modern economy of corporations and powerful trade unions.

Theoretical discussions about inflation and ways to combat it appeared in a developed market economy. To some extent, they can explain the nature of inflationary processes in our country. But, I repeat, only partially. In our economic system, in its sectoral structure, there are so many features, or rather, disproportions, without taking into account which it is impossible to explain such a multifaceted process as inflation.

It is not the task of the author of this article to show how inflationary processes developed there, “over the hill.” I will only say that the economies of Western countries, especially the United States, experienced the greatest “suffering” from inflation in the 80s of the last century, when fuel prices sharply increased during the oil crisis. In the United States at that time, much was written about double-digit inflation, reaching 14% per year. However, by the end of the 1980s, thanks to measures taken both in relation to costs and in relation to money supply, inflation dropped to 5-6%. In recent decades, both in the United States and in the countries of the European Union, the annual rate of price growth has remained at the level of 2-2.5%. Today, inflation manifests itself primarily in world markets - in the rapid rise in prices for basic resources (oil, gas and metals) and for food products.

FEATURES OF INFLATION IN RUSSIA

Many believe that in Soviet times, right up to the beginning of reforms in the 90s of the last century, prices rose (they were fixed for all goods), and therefore inflation did not exist in Russia at all. In fact, the inflationary process developed - quietly and secretly. Inflation was subdued. According to some data, the annual rate of price growth in the 80s was 1.5%. Soon food products almost disappeared from store shelves. People of the older generation remember the “sausage excursions” to Moscow. In many cities, a kind of card system has appeared - coupons, food orders. Money meant little; there was almost nothing to buy with it.

The transition to economic reforms in the 90s - and they began with the liberalization of prices in an environment of general shortages and the collapse of production - made inflation open and truly “robbery”. The “money overhang” (that is, the gap between the mass of money thrown into circulation and the volume of commodity output), which had emerged under these conditions, collapsed. Inflation has reached catastrophic proportions. In 1992 alone, prices increased 26 times, and in the next year - another 10. Consumer prices in the first half of the 90s grew monthly by 15-18%.

The measures taken (primarily a sharp tightening of monetary policy) led to the fact that by 2000, inflation began to weaken. The annual increase in consumer prices in 2002 was 15.1%, in 2003 - 12%, in 2004 - 11.7%, in 2005 - 10.9%, in 2006 - 8.2% . For 2007, it was planned to bring inflation to 6-7%, and in 2008 - to 4-5.5%. And suddenly the autumn of 2007 gave an unexpected outbreak of rising prices, overturning all forecasts. The government was forced to take emergency administrative measures to freeze prices on socially important products - six types of food.

In just one month, October 2007, consumer prices rose by 1.6%, and food prices by an average of 3.3% (this was more than three times the September price increase). Some food products managed to rise in price even before the price freeze: prices for sunflower oil increased from July to October by 60%, for butter, milk and dairy products - by 50%, for eggs - by 40%. The inflation rate for 2007 as a whole was, according to official data, 12% (one should not forget that the above figures are average figures). According to calculations by the Center for Macroeconomic Forecasting (CMAP), during 2007, goods in the “basket for the poor” increased in price by 15% (in 2006 - by 9%).

What caused such a sharp revival of the inflation trend? What is its nature - short-term or long-term? “Our” and “not our” experts argue a lot about this. Where to look for the root cause? Is it an excess of demand resulting from the excessive release of money into circulation, or an increase in costs? In my opinion, such a contrast is fundamentally false. For, as already noted, both reasons are interdependent, and no matter where we start, we will certainly end up with a vicious inflationary spiral.

Let's start with the main thing - with an increase in money in circulation. Such an increase occurred and is occurring for many reasons, including thanks to the serious social policy of the state aimed at increasing the incomes of the population, whose demand is beginning to grow. Many Russian economists see this as the main reason for the development of inflation in the country. Others take a more cautious position, not seeing a direct connection here. The second position seems more balanced. I will refer to one of these studies.

Indeed, its author notes, in Russia throughout the 90s of the twentieth century and into the new century, the growth rate of the money supply systematically exceeded the indicators planned by the central bank. The range of these excesses is from 20 to 50%. In total, during the period from 1999 to 2006, the money supply increased 13.4 times. “Here comes inflation,” a supporter of the first position will say. But it's not that simple. Firstly, along with the increase in the money supply, there was and is an increase in the demand for money itself, and savings increase. Evidence of this is the growth of household cash deposits in savings institutions, especially in Sberbank (this reduces the relationship between the increase in money supply and the consumer price growth index). Secondly, the speed of circulation of money slows down, and a large amount of money is required to service the same commodity turnover. And finally, the third factor that must be taken into account: the volume of money in circulation is important not in itself, but in comparison with the value of GDP - this ratio is called the monetization coefficient.

It must be said that with the beginning of the reforms, when inflation exceeded all imaginable levels and the government began to pursue a tough monetary policy, the monetization coefficient was reduced to the minimum imaginable size. Even at the beginning of 1999 it was only 16%. At that time, they talked and wrote a lot about the underfinancing of the economy, which became one of the reasons for the acute shortage of money among enterprises. Remember non-payment of salaries and pensions, the spread of barter exchange?

Figures for comparison: the monetization coefficient in developed countries ranges from 60-120%, and in countries with economies in transition it is 25-30%. To date, this figure has reached 26%. As we can see, nothing catastrophic has happened so far in the growth of money supply.

Catastrophic consequences could have occurred if the central bank and the government had not restrained the growth of the money supply entering the country from the sale of continually rising oil prices on foreign markets. Among the deterrent measures, first of all, we note the role of the Stabilization Fund. Its value today is almost 4 trillion rubles. For many years now there have been discussions on the topic: how long should this “bag” of money be increased and is it time to spend it in one way or another? Opponents of this kind of spending have two main arguments. First. The main purpose of the fund is to create a “safety cushion” in case of a sharp drop in oil prices and a crisis situation in the country. The second argument is no less important: the danger of rampant inflation due to a sharp increase in the money supply. (The same role is played by the budget surplus, that is, the excess of government revenues over expenses - more than 7% of GDP.)

Recently, the arguments of those who believe that it is time to use part of the accumulated funds to develop important sectors of the economy, especially its infrastructure, have prevailed. It was decided to divide the Stabilization Fund into the Reserve Fund (in the amount of 10% of GDP) and the National Welfare Fund in February 2008. According to data announced by Finance Minister A. Kudrin, in 2007 Vnesheconombank has already received 180 billion rubles for development purposes, the Russian Nanotechnology Corporation - 130 billion rubles, and the Housing and Communal Services Reform Assistance Fund - 240 billion rubles.

But let’s return to the prices that seemingly so unexpectedly soared last fall. Investigating the reasons for rising prices in the country, many economists point to the high costs generated by the unreasonable degree of monopolization of industries supplying food to the consumer. In other words, we are reaping the results of extremely weak development of small and medium-sized production and complete inaction of cooperation. Here's an example: in one package of milk, only 5% is its cost; everything else is packaging, taxes and especially high trade markups that form the profitability of retail chains. In our country it reaches 25-30% (while in Europe a rule has been introduced according to which retail profitability should not exceed 8-12%).

Finally, we must point out the very high growth rates of prices for utilities and housing, transport, communications and gasoline - they significantly exceeded the average growth rate of consumer prices. For example, the cost of electricity in Russia as a whole increased by 15%, and for utilities - by 18-20%. Gas prices are also rising: in 2008, wholesale gas prices for households and industrial consumers will increase by 25%.

INFLATION AND FOOD PROBLEM IN RUSSIA

The so-called unbalanced food problem plays an important role in the development of the inflation mechanism in our country. We are talking, first of all, about the shortage of food products. And it is the result of the previous weakness of our almost bankrupt agriculture, which was bankrupt not only as a result of the reforms of the 90s. They only revealed the complete lack of competitiveness of its organizational forms - collective farms and state farms, which arose in the early 30s of the last century. It is no coincidence that during the transition crisis the decline in production in agriculture turned out to be much stronger than in industry. A huge gap has formed between supply and demand. Moreover, for some types of food it continues to increase. (For more information about this, see “Science and Life” No., article by B. Rudenko “What will we be full of?”.)

This gap is filled by imports, which, unfortunately, tend to increase. Here are some figures: in recent years, the share of imports in the consumption of butter has reached 52.3%, fatty cheeses, including feta cheese - 42.1%, sugar - 67%, fish - 30%, vegetables, fruits, berries - 32% , meat and sausage products - 40%, raw meat - 80%. In general, 35% of the products included in the Russian diet are imported from abroad.

The meaning of imports is controversial. On the one hand, it replaces the missing food and thereby solves important socio-economic problems, but, on the other hand, it displaces domestic producers from the market. This often happens because imported products are cheaper than domestic ones. At the same time, we find ourselves captive to price movements that occur in world markets. For example, in recent years, food prices have begun to rise everywhere (according to some data, they have increased by 2.5 times). There was even a special term - “agflation”, that is, “agricultural inflation”.

What underlies the rise in prices for agricultural products? First: a decrease in stocks of grains and oilseeds in many countries of the world, especially in developing countries, due to worsening weather conditions - droughts, floods, etc. Second: a decrease in public reserves in major food exporting countries, combined with a gradual abandonment of policies export subsidies. (We are talking, first of all, about the EU countries.) Third: an increase in food imports from the rapidly growing countries of Southeast Asia (China, India, etc.). And finally, fourth: the accelerated formation of the biofuel industry, which is changing the relationship between the fuel and agricultural sectors in the world economy and affecting the prices of agricultural products.

Agflation had the greatest impact on grain crops, vegetable oil and dairy products. And the increase in import prices for these products, in turn, influenced the acceleration of our domestic inflation in the fall of 2007 (it is often called imported inflation). But it also happens: our government’s measures - quotas and restrictive duties aimed at curbing the import of certain types of products (primarily livestock, in order to create more favorable conditions for the development of domestic production) - actually spur price increases. The rise in price of meat is always the result of such a policy. “Quotas on meat and poultry are our man-made inflation,” admitted Finance Minister A. Kudrin, explaining the surge in consumer price growth in 2003-2004. The ban by the Rossel-khoznadzor on importing meat from Brazil and measures to limit its exports taken by Argentina led to the fact that in 2006 meat prices jumped by 40%. There are many such facts that can be cited.

There is every reason to believe that the current inflation was not caused by the increase in money in circulation itself. It rather compensated for the rise in prices that resulted from increased costs. In other words, the same inflationary spiral is at work in which cost-push inflation and demand-side inflation interact, a spiral that is mediated by growing money circulation and which is especially difficult to stop.

WHAT TO DO?

Fighting inflation, as the experience of developed countries and our own shows, is extremely difficult. It would seem that what would be simpler: freeze prices or introduce some form of regulation of certain types of prices. Unfortunately, this method can only help for a short time. Freezing prices will soon result in increased shortages of certain goods and will further worsen inflation. We have already “been through this”, and we should not step on the same rake. Moreover, as many researchers note, a certain increase in prices for agricultural products is inevitable, since currently there is a serious disparity in prices for industrial and agricultural products, which fundamentally inhibits investment in agriculture.

The option of cutting social spending, the growth of which, according to some experts, is to blame for modern inflation, has been ruled out. These costs are actually not as large as our anti-inflationists make them out to be. They only partially compensate for the miserable life of low-income groups in Russia. If you look at the share of social expenditures in GDP in Russia, then in comparison with developed countries they are very moderate (see table)

As we see, it is not social expenses that are to blame for the rise in prices in Russia. The reason for the current acceleration in price growth should still be sought in the area of ​​real factors that have already been mentioned. In support of this conclusion, I will cite the opinion of one very authoritative specialist on this issue. Speaking at the XVII Congress of the Association of Russian Banks in early 2007, the recent head of Sberbank of Russia A. Kazmin said: “Why are we fighting inflation only by limiting the money supply and thinking little about stimulating the supply of goods? With this approach, inflation will rise, despite measures to limit money demand... We may find ourselves in a situation where, thanks to the policy of limiting money demand, the production of goods not only for export, but also for the domestic market will become unprofitable. Accordingly, we will depend even more on imports, and competition in the domestic market will decrease.”

Agriculture deserves special attention from the state. The state in all developed countries, in one form or another, takes care of the agricultural producer. In Russia he found himself abandoned to the mercy of fate. To date, when most of the former farms - collective and state farms - have gone bankrupt, and newly created farmers have barely survived in tough market conditions, we have developed a rather unique economic structure. The role of the private farming sector has increased sharply. It produces approximately 40% of domestic agricultural products. But this, in essence, is a subsistence economy that helps the population, especially in the provinces, to survive. Another 8% of production is produced by our heroic farmers. The remaining 50% of production is provided in equal shares by the surviving collective and state farms (25%) and the same amount by new agro-industrial holdings created with funds from large industrial enterprises.

And here the program adopted by the government for the development of the agro-industrial complex (AIC) seems especially important. The program includes three areas: accelerated development of livestock farming; stimulating the development of small businesses; providing affordable housing for young professionals (and their families) in rural areas. The project is aimed at increasing financial support for agriculture, and not through direct government investment (when there is a great threat of direct theft of money or its misuse or ineffective use), but based on purely market methods - expanding lending and subsidizing interest rates. Preference is given to the development of the strongest and most efficient farms that are able to quickly raise their technical level and increase the amount of marketable products.

It is expected that the program will stimulate the influx of private capital into agriculture, thanks to which a fairly solid sector of agro-industrial holdings has already been created, specializing mainly in the production of meat and dairy products.

There are many critical reviews of this program. And yet, the program is a very important contribution from the state to solving the food problem in the country, which, among other things, has an undoubted anti-inflationary orientation.

To believe that inflation can be eliminated once and for all by putting some kind of “reasonable” government in power is a naive utopia. It can be reduced to a minimum, for example to 2-3%, which the governments of most developed countries have managed to do. But this requires hard work to limit all those objective and subjective factors that put pressure on prices, pushing them up.

Something else is also important. Even in conditions of declining rates of price growth, the need remains for periodic indexation of income, that is, an increase in their nominal value in accordance with rising prices, especially in those areas of the economy where incomes are fixed and do not increase with production growth. We are talking, first of all, about state employees. The government has already recognized the reality of this kind of action, emphasizing in a number of official speeches that the next (in February 2008) increase in pensions and incomes of public sector employees is compensation for rising prices and nothing more.

The work was carried out with the financial support of the Russian State Science Foundation (Russian State Science Foundation) within the framework of project No. 06-02-02043a “Russian transition economy in the mirror of world economic thought.”

Financial termsInflation

A sharp increase in inflation rates indicates that the country's economy is sick and needs urgent treatment. The speed of her recovery largely depends on the professionalism of the “attending doctors” - state leaders. After all, you can direct your efforts only to eliminating the symptoms of the disease, or you can focus on identifying and eliminating its causes.

To successfully combat inflation, it is necessary to act comprehensively in two directions:

1. 1. Take urgent anti-inflationary measures.
2. 2. Take a strategic course to strengthen the state’s economy.

The essence of this method is simple - urgent measures will reduce the rate of inflation growth, and a strong economy will be able to effectively withstand future inflationary attacks on the state. Want to know what exactly needs to be done? No problem! Let's start with the first point - urgent anti-inflationary measures.

Urgent measures to reduce inflation

People wake up in the morning and find out that the dollar has tripled in price. What are they doing? That's right - everyone starts to panic and get rid of their savings. Where does this lead? And this leads to an even greater increase in inflation. Want to know why this happens? Read the article: How money depreciates. In short, the excess unsecured money supply is to blame.

At this moment, the state must take urgent measures to reduce the rate of inflation:

• Limit the flow of new money into the economy. The main channel through which money enters the economy is loans. To stop it, we need to make it unprofitable to take out loans. To do this, the Central Bank raises the key rate, and after it, commercial banks increase the annual interest rate on loans. As a result, it becomes more profitable to deposit money than to borrow money.

  We must understand that this will reduce not only the inflation rate, but also economic activity in the country - everyone will switch to savings mode, which will lead to an economic recession.

• Control the banking system. If you've read the article about the effects of inflation, you probably know that it takes a toll on money. And the banks manage the money. It is necessary to establish control over financial flows in the country. The issuance of non-repayable loans should not be allowed; banks should also provide loans to strategically important sectors of the economy.
• Take control of prices for socially significant goods. During a period of rapid growth of inflation, the state must control prices for bread, flour, sunflower oil and other essential goods. People need to be reassured - let them understand that the situation is under control and everything will get better soon.

  But simply fixing prices for these goods or limiting the markup percentage will not be enough.

  Methods to combat inflation. What is inflation in simple terms

  We also need to support agricultural producers: provide them with preferential loans, reduce taxes for them, regulate purchase prices for the resources they consume, etc. In general, it is necessary to create all the necessary conditions for the profitable operation of these enterprises in a crisis.

• Monitor the activities of exporters. For whom does the state restrain the rise in prices for socially important goods? For our own population. That is, at such prices these goods should be sold only on the domestic market, and they should also be in sufficient quantities.

  What can enterprising “smart speculators” who don’t care about their country and people do? They can buy goods at low prices and export abroad. Naturally, the state must closely monitor the activities of exporters and completely neutralize speculators.

We must understand that taking urgent anti-inflationary measures will not lead the country out of the crisis, but will only slow down the rate of depreciation of the national currency. To completely solve the problem, it is necessary to change the strategic course of the state. How to do this? Read on!

Strategic methods to combat inflation

Rising inflation rates indicate the vulnerability of the country's economy. The solution to the problem suggests itself - we urgently need to strengthen the economy. Strategic methods to combat inflation will help with this:

• Achieving inflation targets. During a crisis, the state is obliged to take control of the situation as soon as possible. And the first thing that needs to be done is to return financial guidelines to business and the population. To do this, it is necessary to provide timely and accurate information on real and planned inflation rates for the current year. This will speed up economic recovery processes and strengthen public confidence in the government. However, you need to understand that:

  Inflation targets must be truthful.
  Otherwise, the authorities will completely lose confidence in themselves, and the country will be overwhelmed by another wave of crisis.

• Changes in budget policy. The decline of the economy leads to a shortage of money in the state budget. The issue of fiat money supply will not solve the problem - it will only start the process of depreciation of money, and inflation will continue to rise.

  Alternatively, you can turn to countries with stronger economies for financial assistance, but this is a path to debt. Therefore, it is necessary, first of all, to reconsider the state’s budget policy - to reduce expenses and increase budget revenues. For example, freeze the financing of unpromising projects, reduce the bloated state apparatus, carry out a structural restructuring of production, ensure the receipt of tax payments in full, etc.

• Creating comfortable conditions for business development. Entrepreneurs are a powerful driving force capable of resuscitating the economy and leading the country out of the crisis. What needs to be done? At a minimum, simply do not interfere with their work, and at a maximum, create a favorable environment for the development of small and medium-sized businesses (support at the legislative level, elimination of bureaucratic barriers, fight against corruption, moderate taxation, etc.).
• The course towards import substitution. Particular attention should be paid to the development of our own manufacturing enterprises - they are the ones who produce GDP, and they are the ones who reduce the country’s dependence on imports. And the smaller this dependence, the more resistant the economy is to external shocks.

So we looked at the main methods of combating inflation. At first glance, they seem simple and understandable, but implementing them in practice can be quite difficult. Nevertheless, nothing is impossible in our life! The main thing is to never give up!

So, friends, this concludes the series of articles on inflation. We hope they were informative and useful. Stay with the portal temabiz.com – it’s interesting here!

Inflation

Inflation(from lat.

4. Ways to combat inflation

inflatio - inflation) is an excessive increase in the money supply in circulation compared to the real supply of goods, which in turn leads to a fall in the purchasing power of money and an increase in prices for goods and services.

Inflation is a two-way process:

1. There is a general increase in prices;
2. Money depreciates.

1. They grow sharply;
2. Remains stable;
3. They are decreasing, but the average level is increasing.

Depreciation occurs; for 1 ruble (conventionally) you can buy less and less goods.

Types of inflation

Inflation rate is the annual growth rate of the price level over a certain time, expressed as a percentage.

The following types of inflation are distinguished:

1. Moderate- develops at a slow pace, not exceeding 10% per year.
2. Galloping- high rates (from 10 to 200% per year).
3. Hyperinflation- very high rate, almost uncontrollable inflation (from 200 to 1000% per year).
4. Expected- the expected level of inflation in the future period, calculated based on the action of factors of the current period.
5. Unforeseen- the inflation rate turned out to be higher than expected for a certain period.
6. Open- inflation in the form of rising prices for consumer goods and production resources.
7. Hidden- inflation that arose as a result of a commodity shortage, accompanied by the desire of government agencies to keep prices at the same level.

Causes of inflation

Modern inflation is associated not only with a fall in the purchasing power of money as a result of rising prices, but also with the general unfavorable state of the country's economic development. The root cause is inflation- disproportions between various spheres of the national economy: accumulation and consumption, supply and demand, state income and expenditure, money supply in circulation and consumers of the economy in money.

It is necessary to distinguish between internal and external factors (causes) of inflation. Among the internal factors are:

1. Non-monetary- violation of economic imbalances, cyclical development of the economy, monopolization of production, imbalance of investments, state monopolistic pricing.
2. Cash- crisis of public money, increase in credit instruments, circulation of the credit system.

External factors are global structural crises (raw materials, energy, currency), government foreign exchange policy aimed at exporting inflation to other countries, illegal export of gold and currency.

Depending on the reason that prevails, two types of inflation are distinguished:

1. Demand inflation- Traditionally, inflation occurs when there is excess demand. The demand for goods is greater than the supply of goods, due to the fact that the manufacturing sector is not able to satisfy the needs of the population. This excess demand causes prices to rise.
2. Cost-push inflation- reasons for such inflation:
   • A decrease in labor productivity growth caused by cyclical fluctuations or structural changes in production.
   • Expansion of the service sector, the emergence of new types with a large share of wages and relatively low compared to labor productivity.
   • An increase in wages under certain circumstances as a result of the active work of trade unions that control nominal wages and high indirect taxes.

Forms of manifestation

• An increase in prices for goods and services, and unevenly, which leads to the provision of money and a decrease in their purchasing power.
• Depreciation of the national currency in relation to the foreign one.
• An increase in the price of gold, expressed in national currency.

Impact on society

Inflation has a negative impact on society as a whole:

1. The economic situation is deteriorating:
   • Production volume is decreasing;
   • There is a flow of capital from production to trade;
   • Speculation expands as a result of sharp price changes;
   • Lending of operations is limited;
   • The financial resources of the enterprise depreciate.
2. Social tension arises.

Measures to combat inflation

• Currency reform- a complete or partial transformation of the monetary system carried out by the state in order to streamline and strengthen measures of state regulation.
• Anti-inflationary policy- a set of measures for government regulation of the economy aimed at combating inflation.
• Deflationary policy- provides for the regulation of money demand through the monetary tax mechanism.
• Income Policy- involves parallel control over prices and wages, by completely freezing them.

A special form of fighting inflation was “ shock therapy" Its essence was to stimulate market relations, free pricing, and abandon price regulation. But this method led to a significant decrease in the living standards of the population.

Methods to combat inflation

A.K. OAK

Tomsk State University

MEASURES TO COMBAT INFLATION IN THE RF

Measures are proposed that will lead to a reduction in the level of inflation in the Russian Federation.

Now the Russian economy has already recovered from the economic crisis of 1998. In recent years, economic growth has been observed, inflation remains at 10%. The Government plans to reduce the inflation rate to 4% by 2010. This is a completely feasible task if the Government together with the Central Bank pursues a competent anti-inflationary policy

The goal of anti-inflationary policy in Russia should not be to suppress inflation at any cost, but to manage the inflation process using market and government methods in the interests of raising national production and ensuring the economic security of the country and people. Low inflation increases effective demand and thereby stimulates economic growth.

Let us consider a number of measures that are complex in nature and are necessary measures to stabilize inflation in Russian society.

The primary anti-inflationary measure is to create a favorable investment climate in the country and overcome the investment crisis by reviving the investment process, concentrating funds in priority areas, and attracting foreign capital to the country's economy.

Decisive measures are needed to return “fugitive” capital from abroad.

It is necessary to increase GDP growth by all means. Without an increase in national production, a real improvement in the financial, monetary, and banking systems is impossible.

It is necessary to increase the share of non-cash money circulation in the country's monetary circulation, which will help curb inflation and help in the fight against shadow income.

Strict state control over energy tariffs and in the housing and communal services sector is necessary. In order to contain energy prices in the context of rising world oil prices, it is necessary to carry out a number of reforms in the tax sphere.

The tax system can become a strong instrument of anti-inflationary policy. Even Adam Smith, in his work “On the Causes of the Wealth of Nations,” argued that the state will not collect taxes at all only in two cases: if it sets the tax rate equal to 0% and 100%.

Taxes can be used to limit wage growth, which can be especially important in the case of wage inflation. To do this, it is enough to introduce a progressive scale of taxation for individuals. Then, as the income of the population grows, the share of taxes collected also increases. There is an increase in accruals, but the level of real wages does not increase. This allows us to curb inflation.

The Central Bank plays a special role in the fight against inflation.

Inflation largely depends on the volume of money supply. Therefore, changes in the money supply can actively influence the level of inflation. The rate of inflation can be reduced by reducing the money supply.

Various methods are used to influence the money supply:

· interest rate policy;

· change in the norm of required reserves;

· change in the volume of refinancing of commercial banks;

· open market operations;

· control over money issue.

The basis of the anti-inflation program should be a scientifically based model for managing the transition economy, which would stimulate the rise in the production of goods and services and business development.

References

1. Zhukov E.F. General theory of money and credit. M.: Banks and exchanges, 1999. 304 p.

2.Lavrushin O.I. Inflation and anti-inflationary policy in Russia. M., 1999. 437p.

3. Nureyev R.M. Money, banks and monetary policy. M: Finstatinform, 2001. 125 p.

4. Finance. Money circulation. Credit. Drobozina L.A. M.: Finance; UNITY, 1999. 367 p.

5. Government program for the development of Russia // Finance of Russia. 2003. No. 9 P.31-39

6. Draft state budget for 2005 // Finance. 2004. No. 8. P.3-6.

How to avoid the impact of inflation

Financial security is one of the most important aspects in the activities of any enterprise, and the larger the enterprise, the more important this problem becomes. The past crisis has clearly shown how important it is to have reserves for growth and effective tools for solving various problems during a crisis.

Creating a set of effective tools for an enterprise to overcome unfavorable conditions can significantly simplify the construction of a development strategy, since any decision made in a strategic plan must always be assessed from a security point of view.

Tool set

Of course, the set of tools may be different for each enterprise. It all depends on the scale of the business, the size of the enterprise and the type of activity. All risks associated with the finances of an enterprise can have only two consequences: losses from operating activities and loss of value (depreciation) of the enterprise’s assets.

Losses can be avoided by correctly assessing all risks in a single transaction or operation. According to experienced managers, a comprehensive assessment of possible consequences is never superfluous, and the resulting losses are only the result of poor preparation and poor-quality analysis of input data.

In order to save your assets from depreciation, there are a variety of ways.

Is it necessary to fight inflation and what are the methods of fighting it?

Some of them may not be used by all businesses, such as buying securities or playing the stock market. For small and medium-sized enterprises, the most affordable, but not the most profitable, is considered to be a regular bank deposit or deposits.

This method of saving their money is chosen by those managers who do not have a penchant for risky operations, but prefer to follow the old principle - the slower you go, the further you will go.

A deposit in a bank with interest for a period of 6 to 12 months actually protects funds from the effects of inflation. The inflation risk is constant, so this method of preventing depreciation can be considered effective. And in an economy where the inflation rate remains at approximately the same level, deposits can be an excellent tool for generating profit.

The mathematics of the calculations is quite simple. Modern banks offer a large selection of deposits for both individuals and legal entities, and the profitability of each deposit can be quickly determined using a convenient deposit calculator tool.

Current page: How to avoid the impact of inflation

Structures of the economy.

The transition of our economy to market relations has sharply increased the importance of money. Problems of the monetary economy become fundamental both in practical measures for the reconstruction of the national economy and in theoretical research. Therefore, despite the lively discussion of these issues on the pages of the economic press, their relevance does not decrease. The high cost of analyzing inflation processes and the large number of operating factors make it difficult to develop the correct monetary policy.

As the experience of our country, as well as other countries, shows, the transition to market relations is accompanied by a rapid rise in prices and an increase in the effect of inflationary factors. It is very important to correctly assess whether the transition to market relations itself is the cause of deepening inflation or whether in these relations the previously accumulated inflationary potential receives its real expression.

It is obvious that in market conditions the possibilities of artificially containing inflation are sharply reduced. At the same time, inconsistency in decision-making on the transition to a market economy and the ill-considered nature of some steps aggravate the existing difficulties and intensify inflationary processes.

The experience of many countries has shown that long-term operation

central planning, as a rule, leads to disruption

balance of material and cash flows.

What determines the amount of money needed to ensure commodity circulation? First of all, from the sum of prices of goods that are subject to sale during a certain period, say a year. The more goods there are, the more monetary units are required to sell them.

The excess of the number of monetary units in circulation over the sum of commodity prices and the resulting emergence of money not backed by goods means inflation. It leads to an increase in prices for goods (explicit or hidden). Therefore, the price index is one of the main and most visual indicators of the presence or absence of inflation and its depth. Inflation can be caused by various factors. This is the release of an excessive amount of monetary units, and the lag in the production of goods from the growth of effective demand, and the entry onto the market of goods that are not in demand.

Inflation is the overflow of financial channels with paper money, which leads to their depreciation.

Inflation is a monetary phenomenon, but it is not limited to the depreciation of money. It penetrates into all spheres of economic life and begins to destroy these spheres. The state, production, and the financial market suffer from it, but people suffer the most. During inflation, the following occurs: 1. Depreciation of money in relation to gold; 2. Depreciation of money in relation to goods; 3. Depreciation of money in relation to foreign currency.

Explanations for the causes of inflation vary. Some economists (J.M. Keynes and his followers) explained it by excessive demand at full employment, that is, on the demand side. Others - neoclassicalists - looked for the reason in the growth of production costs or production costs, that is, on the supply side. It seems that these assessments are one-sided and the truth should be sought in the synthesis of two opposites, i.e., explain inflation from both the demand side and the supply side. Disproportions between supply and demand, the excess of income over consumer expenses can be generated by a state budget deficit (state expenses exceed income); overinvestment (the volume of investment exceeds the capabilities of the economy); faster wage growth compared to production growth and increased labor productivity; arbitrary establishment of state prices that cause distortions in the size and structure of demand; other factors.

A sharp worsening of the state budget deficit in our country occurred in the second half of the 80s. From 1985 to 1989, the gap between the revenue and expenditure parts of the state budget increased from 18 to 120 billion rubles, or from 3.5 to 19% of the country’s national income. The increased deficit caused enormous harm to monetary circulation and fueled inflation.

There is also a slightly different view of the nature of inflation, which is quite natural, since inflation is an extremely complex, contradictory, and insufficiently studied process. According to some economists, inflation should be understood as an increase in the general price level in the economy. Polemicizing with this point of view, L. Heine wrote that we should not forget: the prices of not only goods change, but also the measures of their value, i.e. money. Inflation is not an increase in the size of objects, but a decrease in the length of the ruler we use. He draws attention to the fact that in conditions of natural exchange (in the absence of money), we would in no way encounter inflation; a simultaneous increase in all prices would be logically impossible.

* External reasons

The causes of inflation can be both internal and external. External reasons include, in particular, a reduction in receipts from foreign trade, a negative balance of foreign trade and balance of payments. Our inflationary process was intensified by the fall in prices on the world market for fuel and non-ferrous metals, which constitute an important item of our exports, as well as the unfavorable situation on the grain market in the context of significant grain imports.

* Internal reasons

Let's look at them using the example of Russia.

Firstly, as a rule, one of the sources of inflationary processes is the deformation of the national economic structure, expressed in a significant lag in the consumer sector with a clearly hypertrophied development of heavy industry, and especially military engineering.

Secondly, the inability to overcome inflation is generated by shortcomings in the economic mechanism. In the conditions of a centralized economy, there was practically no feedback, there were no effective economic levers that were capable of regulating the relationship between the money and commodity supply; As for administrative restrictions, they did not “work” effectively enough. In the financial planning system, the decisive role was played by the State Planning Committee, and not the Ministry of Finance and not the State Bank, which “worked” for it, supporting planned targets with financial and monetary resources without any restrictions.

There are several types of inflation. First of all, those that are distinguished from the position of the rate of price growth (the first criterion), i.e. e. quantitatively. In this regard, three types of inflation are distinguished:

It was said above that inflation is the result of an imbalance between supply and demand. The equilibrium can be disturbed primarily on the demand side. In this case, demand inflation occurs. Demand-pull inflation is possible if aggregate demand grows while aggregate supply remains constant, or the growth of aggregate demand exceeds the expansion of supply. An economy may try to spend more than it can produce; it may tend to some point outside its production possibilities curve. The manufacturing sector is unable to respond to this excess demand by increasing real output because all available resources have already been fully used. Therefore, this excess demand leads to inflated prices for constant real output and causes demand inflation. The essence of demand inflation is sometimes explained in one phrase: “Too much money chasing too few goods.”

But the relationships between aggregate demand, on the one hand, and output, employment, and the price level, on the other, are more complex than those implied by this comment. Figure 1 helps explain these complexities.

Rice. 1.

In the first segment, total expenditure—that is, the sum of consumption, investment, government spending, and net exports—is so low that the national product falls well short of its maximum level at full employment. In other words, there is a significant lag in the real volume of GNP. Unemployment is high and a large share of enterprise production capacity is idle. Now suppose that aggregate demand increases. Then output will increase, the unemployment rate will decrease, and the price level will increase little or not change at all. This is explained by the fact that there is a huge amount of idle labor and material resources that can be put into action at existing prices. An unemployed person does not ask for an increase in salary when he is hired. By analyzing supply and demand, we found that increasing prices does not affect the increase in demand, because supply is a horizontal line. An increase in labor and other resources is possible because there are idle resources, and additional production brings benefits. As a result, production volume increases significantly, but prices do not increase.

As demand continues to rise, the economy enters the second phase, approaching full employment and greater utilization of available resources. But the price level cannot begin to rise until full employment is achieved. Because as production expands, stocks of idle resources do not disappear simultaneously in all sectors of the economy and in all industries. Some industries are starting to experience bottlenecks even though most industries have excess capacity. Some industries use up their full production capacity before others and cannot respond to further increases in demand for their goods by increasing supply. Therefore, their prices are rising. As demand in the labor market increases, some categories of part-time workers begin to be fully utilized and their wages increase in monetary terms. As a result, production costs increase and firms are forced to raise prices. Tightening labor markets increases the collective bargaining power of unions and helps them achieve significant wage increases. Firms are willing to give in to union demands for higher wages because they don't want strikes, especially as the economy heads toward greater and greater prosperity. Additionally, as overall costs increase, higher costs can easily be passed on to the consumer by raising prices. Finally, when full employment is reached, firms are forced to hire less skilled (less productive) workers, which leads to higher cost prices. Inflation that occurs in the second segment is sometimes called “premature” because it begins before the country reaches full employment.

When total spending reaches the third segment, 3, full employment extends to all sectors of the economy. All industries can no longer respond to increased demand by increasing output. The real volume of the national product has reached its maximum, and a further increase in demand leads to inflation. Aggregate demand that exceeds society's production capabilities causes an increase in the price level.

When is demand inflation possible? Demand inflation is possible with: - an increase in demand from the population, the factors of which are wage growth and employment growth;

Increased investment, especially in capital goods during economic recovery; - growth in government spending (increase in military and social orders).

Rice. 2.

Let's assume that the economy is close to full employment and capacity utilization. The increase in consumption expenditures of the population, enterprises, and the state shifts the aggregate demand curve upward, and prices rise (Fig. 2).

A different situation arises when production costs rise, i.e. e. the supply price rises, supply inflation occurs.

There have been several periods in recent years when the price level has increased, despite the fact that aggregate demand was not excessive. We have had periods when both output and employment (evidence of insufficient aggregate demand) decreased while the general price level increased.

The theory of cost-push inflation explains price increases by factors that increase unit costs. Unit costs are the average costs for a given volume of production. Such costs can be obtained by dividing the total cost of resources by the amount of output produced, that is:

Publishing unit = Total cost/Number of units of prod.

Increasing unit costs in the economy reduces profits and the amount of output that firms are willing to offer at the existing price level. As a result, the supply of goods and services throughout the economy decreases. This decrease in supply, in turn, increases the price level. Therefore, in this scheme, costs, not demand, inflate prices, as happens with demand inflation.

The main sources of inflation and supply are rising wages and due to rising prices for raw materials and energy resources. Let us illustrate the mechanism of supply inflation (Fig. 3).

Rice. 3.

As can be seen from the graph, an increase in supply price (increase in costs) leads to a vertical upward shift of the supply curve. As a result, after a certain time, the balance with dew and supply is re-established no sya, but already at a point corresponding to a higher price.

The fight against inflation and the development of a special anti-inflation program is a necessary element of stabilizing the economy. Such a program should be based on an analysis of the causes and factors determining inflation, a set of economic policy measures that will help eliminate or reduce the level of inflation to reasonable levels.

There are two possible approaches to managing the economy in conditions of inflation: one is to search for an adaptation policy, i.e. adaptation to inflation, the other - in an attempt to eliminate inflation with anti-inflationary measures.

The leading countries have developed various procedures for monitoring the establishment and regulation of market prices. As a rule, leading countries achieve an absolute reduction in prices on the world market for energy resources, metals and other products they import.

In the domestic commodity markets of leading countries, price imbalances arising from inflation are usually eliminated by regulating price parities. At the same time, for the products of industries that created disparities, prices are frozen, which leads to their relative reduction compared to prices for products of industries that suffered damage from disparity. The latter, in turn, are “allowed” to move prices within the acceptable inflation rate. The procedure for the relative reduction of prices on commodity markets is complex and is applied only for particularly important price proportions. In particular, in the USA, the EU, Japan and other developed countries, agricultural price parities are regulated. A relative reduction in prices is also achieved through the regulation of prices and tariffs of natural monopolies, control over prices for the most important types of products of mechanical engineering, the chemical industry, consumer goods and household services.

However, price parity regulation is not able to eliminate all the consequences of inflation. Therefore, in developed economies, a reduction in the prices of consumer goods in relation to the price of labor, and in the prices of investment resources in relation to the price of credit, is widely used.

According to the statistics department of the International Monetary Fund (IMF), in 23 industrialized countries, inflationary price increases are fully offset by increases in labor prices. If wages grow faster than prices, then at the same time there appears to be a relative decline in prices.

The rapid growth of wages (and, accordingly, the effective demand of the population) with a developed system of price regulation not only does not lead to uncontrolled inflation tion, but is also an instrument of anti-inflationary policy, providing a relative increase in purchasing power (this trend is due to a decrease in material-intensive, unit overhead and sales costs, transaction costs during growth and an improvement in the structure of production)

An important area of ​​anti-inflationary policy in developed economies is exchange rate regulation. Rising inflation leads to a depreciation of national currencies. The goal of regulation is to prevent the depreciation of the national currency from having a reverse effect on the growth of domestic prices, i.e. prevent the emergence of an inflationary spiral: prices - exchange rates - prices. In Russia, a similar spiral was active in 1991-1993. The sharp depreciation of the ruble against the dollar, which occurred in 1992-1993 gg, provoked an increase in domestic prices. As a result, the rate of inflation began to outpace the rate of growth of the dollar. One of the few effective measures to stabilize the economy on the part of the Ministry of Finance and the Central Bank was the regulation of the ruble exchange rate.

Russia needs to move from a policy of regulating inflation at absolute prices to active regulation of relative prices. Before the ruler st vom, the Central Bank and the legislative branch have specific tasks: a) increase the purchasing power of the population by paying debts from the federal and local budgets to the relevant groups of workers; b) bring the money supply and interest rates into line with the needs of production, the commodity market, capital investments and budget payments; c) reduce and eventually eliminate disparities prices according to basic pricing industries: agriculture, fuel and energy complex, transport, etc.

The solution to these problems is complicated by the presence in the Russian economy of inflationary and redistributive “syndicates”, shadow and criminal mechanisms that emerged, as noted above, even when economic freedoms were granted under the reforms of 1987. Budgetary funds do not reach the recipients or arrive with delays, banks do not fulfill functions of lending capital investments, etc. A situation has arisen where the solution to the problem of bringing the money supply in line with the needs of the economy encounters resistance from structures that have large incomes from manipulations with money surrogates and from speculation in monetary resources. It is obvious that without taking strict measures in the monetary sphere, even justified and targeted emission of money will have negative consequences due to the misuse of funds.

Organizational efforts are also needed to restore price parity in price-setting industries. This action will be supported by industries, subject to democratic procedures for discussing and making decisions on prices using mechanisms developed in developed industrial countries for concluding price agreements between associations of commodity producers.

The problem of commodity balance of population incomes is complex. non-inflationary basis. To solve this problem, you need to either return to directive planning, or use the methods of market economies: commodity intervention, organizing the sale of goods on credit, diverting public funds for housing construction, etc. In market conditions, as in the previous system, detailed calculations of the balance of cash income and consumer expenses are needed. For example, even with 100% budget revenue, a detailed analysis of the consequences of paying wage arrears is necessary. In particular, it is necessary to clarify for what period the debt is paid. If on average these are debts for two months, then this amount is equivalent to not half, but a quarter of the monthly trade turnover, which accordingly makes it easier to achieve balance without raising prices.

The growth of the money supply does not lead to inflation if it is due to the replacement of the speed of money turnover, which, in turn, occurs with investments in the real sector of the economy. For Russia, the problem is not to prevent the issue of credit, but to use urgently needed credit funds to finance capital investments in economic recovery, as well as to lend working capital. The latter is very important for Russia due to its natural characteristics. In the Russian economy, seasonal costs play a large role in agriculture, in industry in the northern territories, and in construction. In world practice, specialized banks or credit institutions are created for seasonal lending. In Russia, this element of the market, like many other market institutions, has not been created. Consequently, it is necessary either to return the former industry banks to perform their functions, or to create new credit institutions under the authority of industry and regional associations of commodity producers.

Along with investments in production, measures to organize banking activities also contribute to the slowdown in money turnover: increasing the share of non-cash turnover; expansion of long-term loans, etc. The necessary efforts have not yet been made in this direction, although the reserves here are large.

The Russian type of inflation differs from all other known types, which is explained by the conditions of its development during the transition from a planned economy to a market economy, as well as high rates of price growth.

A number of researchers believe that the nature of inflation in Russia cannot be explained only by the destruction of the money supply due to hypertrophied demand. They believe that inflation is non-monetary or, at least, not only monetary in nature. The following are the reasons causing inflation:

1. Structural imbalances between sectors of the economy, inherited from the centralized planning system, micro- and macroeconomic distortions not only do not correspond to the standards of a market economy, but also do not allow inflation to be quickly overcome. The latter can only be stopped after radical structural changes, which will take decades.

1997 -1.1% and 112% per annum.

This was largely a consequence of consistently monitoring the state of the situation in the financial and foreign exchange markets.

According to the Committee of State Statistics, the inflation index (index - deflator, IRIP), used to index the value of fixed assets and other property of enterprises when they are sold in order to determine taxable profit in the Russian Federation from 1996 to the 1st quarter of 2001. amounted (Table 1):

Table 1

Inflation index of the cost of fixed assets and other property of enterprises during their sale (1996-2001)

Year	I quarter	II quarter	III quarter	IV quarter
1996	113,3%	108,3%	105,2%	103,5%
1997	101,6%	101,2%	101,8%	100,6%
1998	102,5%	102,3%	103,9%	107,2%
1999	108,3%	108,6%	112,7%	110,1%
2000	109,3%	106,5%	107,8%	108,1%
2001	104,4%

Contributing to the development of the banking system, the Central Bank of Russia used in 1996 - 1997. the entire arsenal of market instruments available to him for regulating the supply of money in the economy: the policy of reserve requirements, discount policy, the policy of rational provision of loans, administrative measures in the field of foreign exchange control and foreign exchange regulation.

The 1998 crisis shook the entire economic system of Russia and, of course, was reflected in rising prices. As a result, for 1998 the price index amounted to 182%, i.e. prices have almost doubled. In 1999, as the country emerged from the crisis, a decrease in inflation rates was observed: 3% at the beginning of the year; 1.2% at the end, and for the year the price index was 136.5%.

Inflation in Russia in August was zero, and for 8 months of 2001 it amounted to 13.2%, as evidenced by the report of the State Statistics Committee of Russia. Zero inflation in the consumer market is certainly a good economic achievement, especially since the government promised such inflation in July. However, analysts are in no hurry to revise their annual forecasts and believe that the final figure will still exceed G. Gref’s latest forecast - 16-18% per annum.

According to Alfa Bank analyst N. Orlova, the problem with assessing inflation until the end of the year is, in fact, of a political nature. “It is unknown whether the government will be able to freeze the tariffs of natural monopolies, as it promised,” the expert believes. In her opinion, the desire of the Federal Energy Commission (FEC), voiced on Tuesday, to increase gas tariffs by 20% from October suggests rather that the government will not be able to fulfill its intention. Following gas, other tariffs may also increase - yesterday, the head of the passenger services department of the Russian Ministry of Railways, V. Shataev, said that railway workers want to increase passenger tariffs by an average of 30% by the end of the year and will soon send the rationale for this step to the antimonopoly ministry. If passenger tariffs are not increased, then, according to Shataev, freight tariffs must be raised. RAO UES will not stand aside either. Therefore, N. Orlova left her annual inflation forecast unchanged - at 22%. But if the tariff increase is postponed to November-December, then, in her opinion, the government can keep consumer price growth at 20%.

IBG NIKoil analyst V. Tikhomirov also decided not to revise his annual inflation forecast of 19-20% and for the same reason - due to fears of rising tariffs. From mid-September, vegetables, as usual, will begin to rise in price (without taking them into account, inflation in August would not be zero, but equal to 1.1%), and in October we can already expect another increase in tariffs. In November, these inflationary factors will be supplemented by an increase in salaries for public sector employees, and in December - payment of bonuses and pre-New Year spending by enterprises and budget organizations. If the government postpones the increase in tariffs until next year, then, according to Tikhomirov, the situation of this year will simply be repeated, when at the beginning of the year inflation grew at an accelerated pace, already in June reaching the lower level of the initial government forecast of 12-14%. A curious situation has arisen in the area of ​​influence of producer prices on the consumer market. Producer price index data for August has not yet been published, but it is estimated that it will not be zero. The relationship between producer prices and consumer market prices is constantly changing, but now, according to N. Orlova, it is difficult for producers to shift their costs to consumers, because Imported products are becoming increasingly price competitive. Therefore, now the influence of producer prices on consumer inflation, on which the government sets its targets, is minimal.

Inflation in Russia in 2002 will be about 15%. According to estimates by the Government of the Russian Federation, the volume of GDP at the end of 2002 will be at the level of 10.6 trillion. rub. About 55% of inflation growth in 2002 will be due to an increase in tariffs of natural monopolies, and, accordingly, 45% - by monetary factors.

The inflation rate in Russia, starting from 2004, should not exceed 10% per year. The strengthening of the ruble will contribute to the growth of imports, the volume of which could more than double in 10 years. Export-oriented services, if the economic program of the Russian Government is implemented, should increase by 60% by 2010 compared to 1999. A significant increase in the volume of Russian exports is predicted: in 2004 it will amount to 88.7 billion dollars, and in 2010 it will be at the level of 104.2 billion dollars. The volume of imports in 2004 is expected to be at the level of 70.7 billion dollars, and in 2010 - 95.3 billion dollars. A significant increase in foreign exchange reserves in the country by 2004 will amount to 39.1 billion dollars, and in 2010 - 52.4 billion dollars.

To some extent, speaking about indicators and types of information, we have already touched upon the issue of the consequences of inflation and its impact on the economy. In Western countries, inflation has become an almost integral attribute of the market economic system. This allows us to talk not just about the consequences, but also about some specific functions of inflation. Many economists are of the view that minor inflation, say, with an annual increase in prices of 3-4%, accompanied by a corresponding increase in the money supply, can stimulate production.

The process of inflation leads to the fact that perhaps an increase in the mass of circulating money accelerates the solvent turnover and contributes to the intensification of investment activity. In turn, production growth often leads to the restoration of equilibrium between the commodity and money supply at a higher price level. On the one hand, monetary profits increase, capital investments expand, and on the other, rising prices lead to the depreciation of unused capital. Not everyone wins, but first of all the strongest companies with modern equipment and the most organized production.

In the context of inflationary expectations, entrepreneurs seek to protect themselves from risk, in particular from the expected increase in prices for imported goods (raw materials, fuel, components). To avoid losses caused by the depreciation of money, manufacturers, suppliers, and intermediaries raise prices, thereby spurring inflation. People who borrow money can benefit from inflation, unless it is stipulated that the interest on the loan should take into account the inflationary rise in prices.

But whatever the positive functions of inflation, when it gets out of control and even remains relatively weak and regulated, inflation has a whole complex of purely negative, negative phenomena on the course of economic development. Let us briefly note some of them:

1. Inflation reduces the motivation to work, because it undermines the possibility of normal realization of price earnings. Inflation, especially in conditions of significant price increases, increases social differentiation of the population.

2. Inflation narrows savings opportunities. Savings in liquid form are reduced and partially take in-kind form (purchase of real estate). The ratio between the consumed and saved parts of income shifts towards consumption. The issue of securities often does not achieve the desired goal, because it turns out to be unable to “bind” money from the population.

3. Inflation weakens the position of power structures. The desire of government bodies to obtain additional funds through the issue to solve urgent problems results in increased discontent and increased pressure from various social groups in order to increase earnings, receive additional benefits and subsidies.

4. Inflation leads to a decrease in real incomes of the population with uneven growth of national incomes.

5. Inflation leads to the depreciation of household savings. An increase in interest rates on deposits, as a rule, does not compensate for the fall in real savings.

6. Inflation leads to the manufacturer losing interest in creating quality goods. At the same time, the production of low-quality goods increases, and the production of relatively cheap goods decreases.

7. Inflation limits the sales of agricultural products in the city by rural producers due to a decrease in interest, in anticipation of higher food prices.

8. Inflation leads to a deterioration in living conditions mainly among representatives of social groups with fixed incomes (pensioners, employees, students, whose income is generated from the state budget).

A kind of paradox is that inflation can only be overcome by restructuring the economic mechanism and turning off market regulators, which is only possible in a stable political situation.

1. Abramova M.A., Aleksandrova L.S. Economic theory. Study guide. M.: Jurisprudence, 2001.

2. Sazhina M.A., Chibrikov G.G. Economic theory. Textbook for universities. M.: Publishing group NORMA - INFRA M, 1998.

3. Heine P. Economic way of thinking. M.: News. 1991.

4. Inflation: causes and patterns // Questions of Economics. 1992. No. 2.

5. Modern inflation: origins, causes, contradictions. M.: Mysl, 1980.

6. Amosov A. Features of inflation and the possibility of counteracting it // Economist. M., 1998. N1. pp. 67-75.

7. www.vesti.ru/2001/08/02/996762293.html

see Heine P. Economic way of thinking. M., 1991. P. 484 .

Analysis of competitiveness factors of the enterprise Buryatmyasoprom LLC

1.1 Competition and competition

Competition is the fierce rivalry of people (firms) in economic and other spheres of social life. From the perspective of economics, competition is the struggle of sellers (manufacturers) to better satisfy consumer requirements...

Unemployment in developed countries. Comparative characteristics of Western European countries, the USA and Russia

1.3 Fighting unemployment

During the development of economic theory (in particular the theory of unemployment, its types and causes), various economists offered their options for reducing the unemployment rate. “For example, Keynesians believed...

Unemployment in Ukraine

3. The fight against unemployment in Ukraine

3.1 The state of unemployment in a market economy and theories of combating it Critical changes in the country’s management system cause negative trends, which are characterized by economic decline...

Unemployment, its types, determination of level, socio-economic consequences

FIGHTING UNEMPLOYMENT

unemployment consumer social differentiation Since unemployment is a serious economic problem, the government is taking various measures to combat it. Different measures are used for different types of unemployment...

The impact of the global economic crisis on the Russian economy

3. Fighting the crisis in Russia

The Russian authorities are trying to act according to recipes used in developed countries: allocating funds for the recapitalization of the banking system, announcing a reduction in the tax burden on enterprises...

Patterns of economic monopolization and antimonopoly policy

3.2 The fight against large monopolists in Russia

It is necessary to ensure the establishment of fair prices in a market economy by developing competition in domestic Russian markets...

Inflation

3. ANALYSIS OF MEASURES TO COMBAT INFLATION IN RUSSIA

The period from 2000 to 2010 is characterized by opposite trends both in relation to the economic situation in the country as a whole and in relation to inflationary processes. From 2000 to 2006 the inflation rate decreased by 9.6 percentage points or 1...

Inflation and its consequences. Anti-inflationary policy of the state

7.2 Fighting inflation in Russia

Over the past six years, the Central Bank, together with the Russian Ministry of Finance, has actively pursued a policy of price containment, which was based on the principles of “sterilization.” In other words…

Cashing out as a feature of the shadow economy

2. Fight against cash-out business

The Central Bank's fight against money laundering in 2006 alone led to the loss of licenses of about 30 banks. An analysis of the situation shows that the actions of the Central Bank are effective in preventing banks from participating in money laundering...

Causes of the global economic crisis and ways out of it

Fighting the crisis in Russia

Measures were taken to prevent the collapse of the credit system. Banks were provided with significant financial resources to overcome the liquidity crisis. On the one side…

Corruption problems

§ 4. Fight against corruption

Solving the problem of combating corruption, according to most experts, is inseparable from increasing the efficiency of the state, reducing and streamlining its functions in regulating the economy...

The labor market and its features in modern conditions of economic development of Russia

2.2 Employment of the population in Russia. Fight against unemployment

The desire to ensure almost one hundred percent employment of the working-age population to the detriment of the economic efficiency of production led to the fact that in many enterprises there was not a shortage of labor, but a surplus...

Socio-economic consequences of inflation and anti-inflation policy

1.2 Combating inflation as a multifactorial phenomenon

Inflation is caused by an acute violation of the proportions of reproduction and is associated with the action of economic, financial, political, monetary, external and psychological factors. The state can also play a significant role in increasing inflation...

Economic crises, their essence, types and consequences

2.3 Dealing with the crisis

One of the significant features of the functioning of a market economy is the cyclical recurrence of economic phenomena. We are talking in this case about the cyclical crises that have accompanied the history of capitalism since the beginning of the 19th century...

Economic crisis

4. Fighting the crisis in Russia

The main question of our time is when will the crisis end? At the same time, many respected experts still disagree about when the crisis began. Officials take advantage of the situation of uncertainty and confusion of minds...

The negative consequences caused by inflation determine the need for the state to implement anti-inflationary policies. It is carried out in two main directions:

· eliminating the causes of inflation;

· smoothing out the negative consequences of inflation for the population (adaptive inflation policy). Includes indexation of income and compensation for losses.

The fight against inflation is the elimination of its causes. Therefore, the goal of anti-inflationary policy is to establish control over inflation and maintain a moderate rate of price growth. There is an opinion that it is impossible to eradicate inflation - it can only be managed. The choice of anti-inflationary regulation methods is determined by the type and level of inflation itself. At the same time, we must not forget that limiting inflation may be accompanied by the emergence of other, no less complex macroeconomic problems: rising unemployment and a decline in production.

Anti-inflation strategy combines long-term goals and methods, so the effect of strategic anti-inflationary measures does not appear immediately. The main elements of an anti-inflationary strategy are considered to be :

- limiting inflation on the supply and demand side;

- limiting external inflation impulses.

Limiting inflation on the demand side is associated, first of all, with the suppression of inflation expectations, mainly of an adaptive nature, when people form their expectations regarding future prices based on their own experience in recent years. Adaptive inflation expectations are a significant obstacle to inflation management.

Long-term monetary policy It also limits inflation on the demand side. It includes: money supply regulation , regulation of the speed of money turnover. It is known that the ratio of money and commodity supply is expressed by the formula:

M · V=P · Q, where

M is the amount of money required for circulation, V is the velocity of circulation of the monetary unit of the same name, P is the price level for goods and services, Q is the quantity of goods produced. Other things being equal (V and Q are constant values), the price level depends on the size of the money supply. Therefore, if the money supply is limited or reduced, price increases (inflation) will begin to slow.

Regulating the speed of money turnover. Let us assume that the volume of production and the amount of money in the economy are unchanged throughout the year, that is, Q and M are constant, in this case the price level depends on the speed of money turnover. The higher the speed of money turnover, the higher the inflation. Consequently, the state should take measures to slow down the speed of money turnover (increase the exchange rate of the national currency, eliminate the threat of commodity shortages).

Tools d long-term monetary policy are considered: refinancing rate, that is, the amount of interest at which the central bank provides loans to commercial banks (increases with inflation); required reserve ratio (also increases with inflation) and transactions with government debt obligations (with inflation, government securities are sold by the central bank).

Limiting the budget deficit has a very intensive effect on excess aggregate demand. Reducing government spending can go in different directions: reducing military spending, reducing funding for social programs, reducing the cost of maintaining the state apparatus. The budget deficit can also be reduced by increasing budget revenues.

Limit n no inflation on the supply side involves regulation of prices and incomes. When inflation is low, consumer income is effectively regulated through the taxation system. The income of firms, in addition to taxes, can be adjusted using the interest rate. If inflationary processes intensify, wages are indexed to a lesser extent than prices rise. When inflation is high, the state can also “freeze” the prices of monopolistic firms.

The government's influence on supply-side inflation is also possible through customs duties and tariffs. Thus, reducing duties on raw materials, equipment, and components helps slow down price increases. Liberal migration policies attract foreign workers to the country, labor supply increases, and wages decrease.

Limit in n others they have n st b owls inflation especially important for countries dependent on foreign trade. In this case it is difficult to avoid imported inflation. The natural way to secure the national economy is to gradually revalue, that is, increase the exchange rate of the national currency.

3.2 Fighting inflation in Russia

As a result, the price of imported goods falls, which counteracts import inflation. However, we should not forget that revaluation makes exports more expensive. The condition under which a country could successfully protect itself from external inflation by increasing (revaluing) the exchange rate is to reliably contain the growth of internal costs - then the competitiveness of domestic products will be high.

Anti-inflationary policy tactics, which complements the anti-inflationary strategy, includes various measures. These, for example, include both stimulating the propensity to save (increasing the yield of government securities and household deposits) and measures to reduce the level of liquidity of savings - from increasing interest on time deposits to freezing deposits. Many governments have resorted to confiscation-type monetary reforms.

By pursuing an anti-inflationary policy, the state can significantly slow down the rate of inflation by temporarily reducing production and increasing unemployment. Thus, society must pay a high price in terms of output and employment losses to maintain price stability. The search for ways to resolve this cruel dilemma still remains one of the pressing problems of modern macroeconomic theory. It should be noted that the anti-inflation programs proposed by various economic schools are effective for the conditions of a developed market economy, where the mechanisms of market regulation are well-established and the standard of living of society is high.

Inflation in countries with transition economies is of a specific nature, and therefore only standard methods cannot be used to combat it. The fight against inflation should be conducted here more carefully, and the tasks of creating a normal market mechanism, a favorable investment climate, and a social protection program for the population should be put in the foreground.

1. Inflation (from Latin inflatio - swelling, swelling) is one of the main areas of macroeconomic instability. Since the 70s of the 20th century it has been chronic.

2. Inflation is the depreciation of money, manifested in a continuous, steady increase in the general price level.

3. The reasons causing inflation can be external and internal; economic and non-economic, monetary and structural.

4. Suppressed inflation exists in a command economic system and is manifested in shortages of goods and services.

5. Open inflation exists in a market economy and manifests itself as an increase in prices.

6. From the point of view of causes, open inflation manifests itself as demand inflation (excess demand) and supply inflation (increasing production costs).

Depending on the rate, inflation is classified into creeping, galloping and hyperinflation.

8. Inflation is measured using price indices. The rule of 70 determines when prices will double.

9. Inflation causes significant negative socio-economic consequences affecting all economic entities of the country, the population, and the state as a whole.

10. Anti-inflationary policy has two directions: eliminating the causes of inflation, smoothing out the negative consequences of inflation.

Review questions

1. Define the cyclical nature of the business cycle. Indicate the reasons for cyclicity.

2. Show how cyclical fluctuations will affect the real volume of GDP, the average length of the working week, the price index, and personal income.

3. Determine the status of persons (unemployed, employed): full-time university student; housewife; a doctor who resigned voluntarily and is waiting for a vacancy in a medical institution; a salesperson who studies by correspondence.

4. Formulate Okun's law.

5. Show the differences between demand-pull inflation and cost-push inflation. What reasons can cause demand inflation?

6. Highlight the socio-economic consequences of inflation.

7. Do expected and unexpected inflation have the same impact on income redistribution?

8. Is there a dilemma of goals in anti-inflationary policy?

⇐ Previous20212223242526272829Next ⇒

Date of publication: 2015-11-01; Read: 2058 | Page copyright infringement

Studopedia.org - Studopedia.Org - 2014-2018 (0.003 s)…

Anti-inflationary measures

Anti-inflationary measures (Anti-inflationary measures) is a set of measures carried out by the government aimed at curbing the rate of inflation.

Anti-inflationary measures, which come in two main forms: tactical and strategic. Tactical measures aimed at eliminating the consequences of inflation (increasing price levels). They involve either an increase in aggregate supply, or a reduction in aggregate demand, or both. Tactical anti-inflationary measures cannot cure the economy of inflation, but they bring a short-term halt in price growth. Strategic measures aimed at eliminating the causes of inflation. These measures require a long time to achieve their goal. This policy was called anti-inflationary. It may include measures such as reducing taxes on producers, stimulating investment, etc. in order to activate the offer. To reduce excess demand, the government can limit its spending and increase taxes. In order to combat inflation, monetarists propose to actively use such instruments as changes in the money supply and interest rates.

If a rise in prices is replaced by their decline, then there is deflation. There is a slowdown in price growth disinflation. In the 1970s, slowing economic growth and rising unemployment were accompanied by rising prices. This phenomenon is called stagflation. Stagflation can be triggered by both loose monetary policy (shocks on the demand side) and negative shocks on the supply side.

Today the state is forced to fight on two fronts: against inflation and unemployment. At the same time, the active fight against unemployment by artificially stimulating aggregate demand and increasing government spending reduces unemployment, but these same actions increase inflation. Tough anti-inflationary policies cause an increase in unemployment. Inflation and unemployment are not only economic, but political problems, since curbing them is a measure of the correctness of the government's economic policy. One way to measure the success of a government's economic policies is the “poverty index,” which is calculated as the sum of inflation and unemployment rates.

Fundamentals of economic theory.

Methods to combat inflation

Course of lectures. Edited by Baskin A.S., Botkin O.I., Ishmanova M.S. Izhevsk: Udmurt University Publishing House, 2000.

Add to bookmarks

Add comments

Basic methods of anti-inflationary policy.

The main methods of stabilizing monetary circulation are anti-inflationary policy and monetary reform.

Anti-inflationary policy is a set of measures for state regulation of the economy aimed at limiting inflation.

World practice has accumulated a wealth of experience in the forms and methods of anti-inflationary policy. It includes a wide range of monetary, fiscal, tax, income policy and stabilization programs up to and including radical monetary reforms.

The most general measures to curb inflation factors include:

improvement of the economy (elimination of structural imbalances, hypertrophy of Group A industries and the military-industrial complex, elimination of unprofitability of enterprises);

bringing order to capital investments (investments) using, in particular, the global experience of project financing (based on the minimum participation of budgetary funds and the maximum share of the non-state sector);

normalization of trade and elimination of the imbalance between the money and commodity supply;

active involvement of non-traditional goods (apartments, securities, etc.) in market circulation;

development of the services market.

Along with the general economic long-term strategy, it is necessary urgent measures to curb inflation and turning it into controlled inflation, since it is impossible to overcome inflation immediately; this takes years. In this regard, modern experience suggests two options for regulating inflation depending on the state of the economy:

deflationary policy, associated with limiting the growth of the money supply, loans, wages, and ultimately, solvent demand.

MEASURES TO COMBAT INFLATION IN THE RF

However, deflationary policies are applicable in conditions of economic growth in order to curb the “overheating” of the economy, which does not always happen;

income policy, used in stagflation (a combination of inflation with a decline in production) and which represents the coordination and linking of the growth rates of wages and prices under the supervision and mediation of the state.

Priority measures aimed at stabilizing monetary circulation and curbing inflation include:

the annual establishment by the state of an upper limit for the growth of nominal wages and prices while simultaneously stimulating the development of production through the use of economic incentives (credit, tax, foreign exchange), which in fact means implementing a flexible, differentiated policy;

improvement of the financial system, elimination of the state budget deficit by placing government securities primarily among institutional investors (banks, insurance companies, financial companies, etc.);

flexible regulation of the activities of banks, which does not constrain their entrepreneurship, but restrains their inflationary activities. To do this, it is necessary to pursue a normal, mutually beneficial conciliatory policy between the government and banks, the Central Bank and commercial banks;

improvement of monetary circulation;

external factors of stabilization of the national monetary unit, in particular, stabilization of trade and payments balances, attraction of foreign capital within reasonable limits, accumulation of foreign exchange reserves.

The starting point for developing an anti-inflationary program, which includes improving monetary circulation, is the use of two regulators: market and state.

They are also aimed at stabilizing monetary circulation and limiting inflation. monetary reforms- radical transformations of the monetary system carried out by the state in order to streamline and strengthen monetary circulation in the country.

The most well-known methods used within the framework of monetary reforms are the following: nullification, restoration (revaluation), devaluation and redenomination.

Nullification is a procedure for canceling a heavily depreciated monetary unit and introducing new money.

Restoration (revaluation) - restoration of the previous gold content of the monetary unit (under the gold standard) or an increase in the exchange rate of the national monetary unit in relation to the foreign one.

Devaluation represents a decrease in the gold content of a monetary unit (under the gold standard) or a decrease in the official exchange rate.

Denomination means an enlargement of the scale of prices by increasing the nominal purchasing power of the new monetary unit of the same name compared to the old one.

The necessity and essence of credit.

The emergence of credit relations is due to the fact that in the conditions of commodity production and circulation, the individual circulation of economic units at the expense of their own funds objectively determines the need to satisfy the borrower’s temporary needs for funds at the expense of the lender’s temporarily available funds on a repayable and equivalent basis.

Economic purpose of the loan consists in the redistribution of resources between different links and spheres of the reproduction process in order to ensure its uninterrupted functioning.

Credit- a set of economic relations between the lender and the borrower regarding the return movement of value.

The subjects of credit relations (lenders and borrowers) can be the state, enterprises and the population, i.e. all those who have temporarily free funds or have a temporary need for them.

The place and role of credit in the economic system of society are determined by the functions it performs. At the same time, the function of credit is understood as a specific manifestation of the essence of a given economic category, its interaction as a whole with the external environment. Expressing the features inherent in a loan, the function characterizes its features and differences from other economic phenomena.

Functions and principles of credit.

The following main ones are distinguished credit functions:

1. redistribution function, which consists in the fact that thanks to the loan, funds are redistributed in the economy on a repayable basis;

2. the function of replacing real money with credit operations;

3.control-stimulating function, which does not mean control of the activities of some regulatory bodies (for example, banks), but self-control of enterprises using economic levers. In this case, with the help of credit, monetary control is exercised over the reproduction process. For example, if an enterprise performs poorly, then this is reflected in its debt on loans and, ultimately, on its financial condition as a whole, therefore, with the help of the control and incentive function, credit, as it were, signals the state of production and encourages enterprises to improve their work, improve industrial relations.

The theory of credit identifies such lending principles, such as repayment, urgency, payment, targeted nature, preventing the substitution of credit resources for capital accounts.

Repayment And urgency are the basic principles of lending, meaning that the loan must be repaid and also paid for its use.

The principle of payment credit means that credit must be provided for a certain fee (interest on the loan). Only in this case will the credit institution be able to work on the principles of commercial settlement. At the same time, the stimulating role of the loan will be realized not only for the borrower, but also for the lender.

Target character a loan is a condition only when lending to unreliable borrowers or when the bank directly initiates the financed event. The targeted nature of the loan means that borrowed funds must be used strictly for their intended purpose.

A.K. OAK

Tomsk State University

MEASURES TO COMBAT INFLATION IN THE RF

Measures are proposed that will lead to a reduction in the level of inflation in the Russian Federation.

Now the Russian economy has already recovered from the economic crisis of 1998. In recent years, economic growth has been observed, inflation remains at 10%. The Government plans to reduce the inflation rate to 4% by 2010. This is a completely feasible task if the Government together with the Central Bank pursues a competent anti-inflationary policy

The goal of anti-inflationary policy in Russia should not be to suppress inflation at any cost, but to manage the inflation process using market and government methods in the interests of raising national production and ensuring the economic security of the country and people. Low inflation increases effective demand and thereby stimulates economic growth.

Let us consider a number of measures that are complex in nature and are necessary measures to stabilize inflation in Russian society.

The primary anti-inflationary measure is to create a favorable investment climate in the country and overcome the investment crisis by reviving the investment process, concentrating funds in priority areas, and attracting foreign capital to the country's economy.

Decisive measures are needed to return “fugitive” capital from abroad.

It is necessary to increase GDP growth by all means. Without an increase in national production, a real improvement in the financial, monetary, and banking systems is impossible.

It is necessary to increase the share of non-cash money circulation in the country's monetary circulation, which will help curb inflation and help in the fight against shadow income.

Strict state control over energy tariffs and in the housing and communal services sector is necessary. In order to contain energy prices in the context of rising world oil prices, it is necessary to carry out a number of reforms in the tax sphere.

The tax system can become a strong instrument of anti-inflationary policy. Even Adam Smith, in his work “On the Causes of the Wealth of Nations,” argued that the state will not collect taxes at all only in two cases: if it sets the tax rate equal to 0% and 100%.

Taxes can be used to limit wage growth, which can be especially important in the case of wage inflation. To do this, it is enough to introduce a progressive scale of taxation for individuals. Then, as the income of the population grows, the share of taxes collected also increases. There is an increase in accruals, but the level of real wages does not increase. This allows us to curb inflation.

The Central Bank plays a special role in the fight against inflation.

Inflation largely depends on the volume of money supply. Therefore, changes in the money supply can actively influence the level of inflation.

Are you really human?

The rate of inflation can be reduced by reducing the money supply.

Various methods are used to influence the money supply:

· interest rate policy;

· change in the norm of required reserves;

· change in the volume of refinancing of commercial banks;

· open market operations;

· control over money issue.

The basis of the anti-inflation program should be a scientifically based model for managing the transition economy, which would stimulate the rise in the production of goods and services and business development.

References

1. Zhukov E.F. General theory of money and credit. M.: Banks and exchanges, 1999. 304 p.

2.Lavrushin O.I. Inflation and anti-inflationary policy in Russia. M., 1999. 437p.

3. Nureyev R.M. Money, banks and monetary policy. M: Finstatinform, 2001. 125 p.

4. Finance. Money circulation. Credit. Drobozina L.A. M.: Finance; UNITY, 1999. 367 p.

5. Government program for the development of Russia // Finance of Russia. 2003. No. 9 P.31-39

6. Draft state budget for 2005 // Finance. 2004. No. 8. P.3-6.

2. The fall in the exchange rate of the national currency in relation to the currencies of other countries. As a result of this, firstly, domestic prices for imported goods increase, and secondly, the exchange of foreign currency for national currency requires additional money emission;

3. World economic crises;

4. The state of the country's balance of payments, its foreign exchange and foreign trade policies.

Internal reasons determined by the state of the economy of a given country. Among them are:

1. Imbalance of government expenditures and revenues - the so-called. state budget deficit. Often this deficit is covered by the use of the “printing press”, which consequently leads to inflation.

2. Inflationary dangerous investments - mainly militarization of the economy.

Military appropriations lead to the creation of additional effective demand, and as a result, an increase in the money supply.

3. The absence of a pure free market and perfect competition as part of it.

4. Inflation expectations—inflation has a self-sustaining nature. The population and economic entities are getting used to a constant increase in the price level. The population demands higher wages and is stocking up on goods for future use, expecting their prices to rise soon. Manufacturers are afraid of price increases from their suppliers, while at the same time factoring into the price of their goods the increase in prices they predict for components and thereby rocking the inflation flywheel.

The negative consequences of inflationary processes include:

1) Decrease in real incomes of the population (with uneven growth of nominal incomes);

2) depreciation of household savings (increasing interest on deposits, as a rule, does not compensate for the fall in real savings);

3) loss of interest among producers in the creation of tangible goods (the production of low-quality goods increases, the production of relatively cheap goods decreases);

4) increasing imbalances between the production of industrial and agricultural products;

5) restriction of the sale of agricultural products due to decreased interest, in anticipation of increased food prices;

6) deterioration of living conditions mainly among representatives of social groups with solid incomes (pensioners, struggling people, students whose income is generated from the state budget).

If a country's economy is hit by inflation, its first victims are consumers.

Both open and suppressed inflation negatively affect the well-being of the population in two directions at once - through savings and through current consumption, i.e. the socio-economic consequences of inflation are associated, first of all, with changes in income. There is a redistribution of income between the private sector and the state, between participants in production and recipients of transfer payments, between labor and capital.

People, knowing that prices are constantly rising, are trying to achieve an increase in their wages; on the other hand, producers, assuming rising prices for raw materials and energy resources, also increase prices for their goods. As a result, all this further spurs inflation processes.

1.2 Concept and goals of anti-inflationary policy

One of the most difficult issues in economic policy is managing inflation. The methods of managing it are ambiguous and contradictory in their consequences.

Inflation management involves the use of a set of measures that help, to a certain extent, combine price increases (insignificant) with income stabilization. Process management tools used in different countries vary depending on the nature and level of inflation, the characteristics of the economic situation, and the specifics of the economic mechanism. In general, in industrialized countries (in particular, in the United States and most Western European countries), the rate of inflationary growth can be kept within fairly narrow limits.

The negative social and economic consequences of inflation force governments of different countries to pursue certain economic policies. Anti-inflationary policy includes a wide range of different monetary and budgetary measures, tax measures, stabilization programs and actions to regulate and distribute income. A very important condition for anti-inflationary policy is the independence of the government from pressure groups: anti-inflationary measures must be carried out consistently and carefully.

]It is important to note that the main way to combat inflation should be to combat its underlying causes. Goals Anti-inflationary policies should primarily be:

· reduction of inflation potential

· predictability of inflation dynamics.

· reduction in inflation rates

· price stabilization

Strategic goal of anti-inflationary policy- bring the growth rate of the money supply into line with the growth rate of the commodity supply (or real GDP) in the short term, and the volume and structure of aggregate supply with the volume and structure of aggregate demand in the long term. To solve these problems, a set of measures must be implemented aimed at containing and regulating all three components of inflation: demand, costs and expectations. Assessing the nature of anti-inflationary policy, we can distinguish two general approaches.

1. Policies aimed at reducing the budget deficit, limiting credit expansion, and curbing money creation. In accordance with monetarist recipes, targeting is used - regulating the growth rate of the money supply within certain limits (in accordance with the growth rate of GDP).

2. A policy that regulates prices and incomes and aims to link rising wages to rising prices. One of the means is income indexation, determined by the level of the subsistence minimum or the standard consumer basket and consistent with the dynamics of the price index. To curb undesirable phenomena, limits on salary increases or freezes may be established, the issuance of loans may be limited, etc.

If inflation rises as a result of rising production costs, then investment should be encouraged in every possible way. And since the governments of developed countries cannot use strict methods of directly directing prices, they again have to resort to methods such as increasing tax rates.

As world practice shows, a stabilization program, which includes a set of interrelated measures in the field of budgetary and monetary policy, helps to reduce inflation in a short time. As a rule, it is carried out as a single complex, and foreign governments and international organizations often participate in this process. The main objectives of the stabilization program are:

— reduction in government spending, including reduction in subsidies;

- tax increases;

— reduction in lending volumes to commercial banks;

— an increase in the issuance of treasury bonds and the volume of foreign loans;

— increasing social spending for the needs of low-income groups of the population;

— fixing the exchange rate of the national currency.

In implementing stabilization measures, along with economic logic, political foresight is also required. It is known that raising taxes is an extremely unpopular step of any government. And this measure does not find support among the population. Therefore, it must be offset by increased spending on social needs. But since the stabilization package is primarily aimed at reducing the budget deficit, foreign loans can help the government pay for socially significant programs.

Preparing a stabilization program and starting to implement it is quite difficult. The main task is for it to start working. Therefore, many countries are trying to simultaneously make changes to economic legislation while reducing government spending. This applies, for example, to a law prohibiting the Central Bank from issuing loans to the government or commercial banks.

Experience shows that it is very difficult to stop inflation using organizational measures alone. This requires structural reform aimed at overcoming the imbalances that have arisen in the economy.

Specific methods of curbing inflation must be developed after determining the nature of inflation and identifying the main and related factors that spur the development of inflationary processes. Each inflation is specific and requires the use of a set of measures that correspond to this specificity.

Inflation can be monetary or predominantly structural in nature; its sources can be excessive demand (demand inflation) or rapid growth in wages and prices for materials and components (cost inflation). Inflation can be stimulated by an unjustifiably low exchange rate of the national currency or an unjustified lifting of restrictions on regulated prices of so-called price-setting goods (fuel, agricultural raw materials). Inflation is stimulated by the state budget deficit, and the monopoly of suppliers and manufacturers.

In practice, there is not just one, but a complex of causes and interrelated factors. Therefore, methods of combating the inflationary process are usually complex in nature, constantly being refined and adjusted.

2 Theoretical approaches to determining mechanisms for regulating inflation

ADD COMMENT[possible without registration]
Before publication, all comments are reviewed by the site moderator - spam will not be published

Methods to combat inflation

Inflation

Economic and social consequences

These consequences are complex and varied. Low inflation rates contribute to a temporary revival of the market situation through rising prices and profit margins. As the rate of inflation increases, it turns into a real obstacle to production and aggravates economic and social tension in society. Galloping inflation disrupts production, causes serious economic damage, and complicates the implementation of economic policy. Also, uneven price growth increases imbalances between economic sectors, distorts the system of consumer demand and aggravates the problem of selling goods on the domestic market. Galloping inflation intensifies the flight from money to goods, exacerbates commodity shortages, and undermines incentives for monetary accumulation. The population's savings are depreciated, banks and other lending institutions suffer losses. Inflation is, as it were, a supertax on the population, and as a consequence, the population’s income lags behind the continuously rising prices.

All categories of workers suffer damage from inflation, incl. employees and retirees. Inflation causes damage to the population, also due to the depreciation of their monetary savings. Another consequence of inflation in the social sphere is the redistribution of income and capital between different strata of society.

With inflation in the economy, there is an uneven increase in prices for goods, this aggravates the inequality of profit rates in various sectors of production, which leads to the expansion of production in some sectors, reduction and decline in others. There is a flow of capital from production to the sphere of circulation, speculative trade is encouraged, where capital quickly turns around and makes a profit. Inflation reduces effective demand and makes it difficult to sell goods. There is a flight from money to valuable goods, regardless of the need for them. The consequence of inflation is also a disruption in the functioning of the monetary system. During inflation, creditors suffer losses, because... receive debts in worthless money. The public finance crisis is worsening. Inflation may become a factor in the currency crisis, ᴛ.ᴇ. discrepancies between official and market exchange rates.

Methods of fighting inflation can be direct and indirect. Most often, the following pattern appears: the more crisis the situation is, the more urgent the direct methods of influence of the government and the central bank on the economy and the money supply as its component.

Indirect methods include regulation:

The total amount of money through the management of the “printing press”;

Interest rates of commercial banks through the management of the Central Bank;

Mandatory cash reserves of commercial banks;

Operations of the central bank on the open securities market.

Indirect methods cannot work at full capacity in our economy due to its insufficient “marketability”. Full-fledged securities market, incl. Our government bond market is underdeveloped, and, accordingly, the Central Bank cannot influence the money supply through the purchase and sale of securities.

The direct impact of changes in the purchasing power of a monetary unit includes such methods , How:

Direct and immediate regulation of loans and their distribution by the state;

State regulation of prices;

State regulation of salary limits;

State regulation of foreign trade and transactions with foreign capital;

State regulation of the exchange rate.

The practice of direct regulation of the money supply is widespread in the West. The United States repeatedly froze prices on many goods in the 60s and 70s. It took the countries of Western Europe a decade and a half after World War II to begin liberalizing prices, and even then only incompletely. France fully liberalized prices on the domestic market only in 1986. F. Roosevelt led the United States out of the deepest crisis of the 1930s through severe government regulation of the economy. Most countries had special laws limiting income from trade intermediation.

Today, in world practice, in order to contain and prevent the process of inflation, special anti-inflation programs are being introduced. Οʜᴎ represent a complex of measures in the field of economics, finance, money circulation, credit, wages, employment, and international monetary relations.

It is known that there are several measures to regulate inflation. These include budgetary, tax, monetary and foreign exchange measures to regulate prices, wages, etc.

So, for example:

a) to overcome the budget deficit, state budget expenditures are reduced;

b) to limit the money supply, taxation increases, usually in the form of indirect taxes;

c) monetary policy is used to limit bank loans, increase the discount rate of the central bank: the interest rate on passive and active operations is regulated, control is exercised over bank resources, etc.

d) to regulate prices, prices for certain goods are blocked.

Through mediation, states use the so-called “income policy” - coordination and linking of wage and price growth rates.

But the most recent and effective measure in the fight against inflation is the implementation of monetary reform in the country.

By methods of conducting All monetary reforms are divided into three types:

1. Confiscation and exchange of money at a deflationary rate in order to sharply reduce the supply of paper money;

2. Temporary (full or partial) freezing of bank accounts (deposits) of the population and entrepreneurs;

3. Combination of the first and second methods. For example, West Germany.

This can all be attributed to shock therapy methods, ᴛ.ᴇ. free pricing. The effectiveness of these methods depends on how far the economy of a country is from the market, ᴛ.ᴇ. its preparedness and market structures. The resulting rise in prices stimulates the production of goods and services. But with excessively damaged market structures, price increases do not lead to positive results, but take on the character of long-term hyperinflation.

Types of monetary reforms:

Nullification– means the announcement of the cancellation of a heavily depreciated unit and the introduction of a new currency

Revaluation– restoration of the previous exchange rate of the monetary unit, ᴛ.ᴇ. an increase in the official exchange rate against the US dollar, and then the International Monetary Fund registers it.

Devaluation– decrease in the official exchange rate of the currency against the US dollar.

Denomination– method of crossing out zeros, ᴛ.ᴇ. consolidation of the price scale.

Methods of combating inflation - concept and types. Classification and features of the category “Methods of combating inflation” 2017, 2018.