Short maintenance and appendixes to the lecture «intercommunication fiscal and monetary methods: the discreteness or rule is in a macroeconomic policy» (compendium of «Economics» Campbell R. McConnell & Stanley L. Brue and additions)
(on Newly-Ukrainian for a translation)
Distinctions are in the looks of monetarists and Keynesians: basic arguments.
Keynesians suppose that a demand curve on a money is relatively declivous, and a demand curve on an investment is relatively steep, it does a credit and monetary policy comparatively by a weak antihunt mean. Monetarists, vice versa, consider a demand curve on a money very steep, and demand curve on an investment declivous enough, it means that the change of money suggestion is rendered by the powerful affecting ravnovesnyy level of NNP. They are predisposed to the policy of greater freedom of enterprise. It fully corresponds the fundamental thesis of monetarism that money suggestion is a decision factor of determination of level of economic activity and standard of prices. Also they do not advise to utillize the policy of cheap and dear money for softening of gettings up and slumps of economic cycle. Professor Milton Fridman asserts that at one time the discrete changes of money suggestion, carried out leading credit and monetary establishments, in actual fact rendered destabilizing influence on an economy. Probing monetary history of USA from Civil war to foundation the Federal backup system in 1913 and comparing it to the events after 1913, Fridman came to the conclusion, that, even if distracted from the destructive for an economy period of the second world war, the last period (after 1913) was obviously more unstable. The large stake of responsibility for diminishing of economic stability after formation of the Federal backup system is added the erroneous decisions of leading credit and monetary establishments. From point of monetarists, economic instability is generated rather the wrong credit and monetary adjusting, what by internal instability of economy. The wrong credit and monetary adjusting takes a place, in obedience to monetarism, on two important reasons.
From here and «monetary rule» - leading credit and monetary establishments must stabilize an interest not rate, but rate of growth of money suggestion. Therefore Milton Fridman recommended for legislative establishment of monetary rule in obedience to which money suggestion broadens annually in a that rate, what annual rate of potential growth of real VNP, that money suggestion must steadily increase on 3-5% in a year. Liquidity which is given by constantly growing money suggestion stipulates expansion of the combined demand. By analogical appearance, if suggestion of money does not exceed a middle rate considerably, every inflationary expansion of charges is liquidated in itself to want of facilities.
Their basic equalization: MV = PQ . As velocity of circulation of money (V) in principle is stable, suggestion of money (M) comes forward a basic factor, determining a production volume and level of employment (Q) and standard of prices (P).
Keynesians for a basic factor, determining the real production volume, to employment and standard of prices, took the combined charges. The last are determined in a number of factors, which, in their opinion, do not depend on suggestion of money. It is considered that their basic equalization: Ca + In + Xn + G = NNP. Governmental purchases (G), size of consumption after payment of taxes (Ca), clean export (Xn) and planned investments (In) which at balanced NNP are equal to the economies (S), test influence of credit and monetary policy through a long transmission mechanism. Bank’s reserves, interest rate, investments, are included in this mechanism, nominal NNP, weakness each of which limits efficiency and reliability of credit and monetary policy, that compels to speak to the use of fiscal instruments.
Monetarists consider justly, that existence changeable temporal lags and erroneous use of interest rate as leading principle for the «exact tuning» of economy on the whole, in most cases it is doomed to the failure. Therefore in practice very much a lot of cases, when a credit and monetary policy destabilizes an economy. But also a monetary rule works not always (!).
Theory of rational expectations.
Such diametrically opposite opinion is understood of the same state of economy there could not be regardless scientists and theoretical developments which examined a question about that appeared, whether a stabilizing policy must to be discrete, as Keynesians offer, or based on rules, as monetarists consider. These theoretical approaches got the name of theory of rational expectations, in basis of which argued that people behave rationally. Market subjects collect and to comprehend information at forming of expectations relatively of things, presenting money interest for them. If, for example, the bearers of securities expect lowering of prices on an exchange stock, in the foresight of it they sell the shares. Growth of suggestion of actions at the market conduces to the immediate falling of price of equities. If users hear about that is expected price advance on food as a result of drought, they provide oneself food stuffs in a threshold the jump of prices. Thus, expectations cause expansion of market demand which, in same queue, a price advance stipulates on food yet till crop is taken the.
They consider also, that businessmen, users and workers, understand how an economy functions, and are in a position to use accessible information for making a decision, which by the best appearance correspond their private interests. People not simply designed experience of the pas on the future; they, besides that, estimate the supposed influence of the conducted economic policy on the future of economy. In short, "rational" people use all of present information, including information about that, how an economy functions, and as the state pursues an economic policy. It allows them to predict the consequences of changes in an economy - regardless of whether they are caused by an economic policy or by something other, - and properly to make a decision, which maximize their welfare. Herein there is essence of rational expectations (TRE), in opinion of Campbell R. McConnell & Stanley L. Brue.
They underlined its "new classic" specific as TRE comes from pre-condition in obedience to which all of markets - both commodities and resources - are in a high degree by a competition. Therefore the rates of settling’s and price are flexible simultaneously in the plan of increase and in the plan of lowering. Consequently equilibrium prices and production volumes quickly adapt to the new situations (change technology), to market shocks (drought or crash of oil cartel of OPEC) or to the changes, in a public policy (unexpected transition from the policy of dear to the policy cheap money).
In practice prices on commodities and resources not so high elasticity and not so change quickly, when users, businessmen and proprietors of resources, change an economic conduct under influence of new information, as want the adherents of TRE. But, presumably (from their point of view), the worse for «practice».
Obviously, that it is expedient to activate a теоретико-методологический analysis and find correct from a practical point sights theoretical grounds.
To the problems of understanding of basic directions a modern economic idea: notes of 2006 of academician AEN Ukraine Valery Vasiljev, author of Law of Preservation of Labour
Neoclassical direction arose up as a reaction on an economic theory to K. Marks, as its critical comprehension, glorifying a free competition. Alfred Marshal (1842-1924) wrote 1890 a year book «Principles of economy». Neoclassical direction of economic science is presented the theories of monetarism and new-liberalism.
Monetarism is a theory of stabilizing of economy money factors (control of the state above the amount of money, emission of money, being in circulation and in supplies, to achievement of balanced of the state budget and establishment of high credit bank percent).
New-liberalism is a theory of taking to the minimum of intervention from the state in an economy (principle A. Smit ), because a private enterprise is able to show an economy out of crisis. Main theorists of conception of economic liberalism of XX st. Lyudvig fon Mizes (1881-1973) and Frederic fon Khayek (1899-1992gg.), based on a theory new-liberalism Lyudvig Erkhard (1897-1977) created the theory of the socially-oriented market economy (necessity of free prices, to the free competition, equilibrium of demand and supply, equilibrium in an economy, - the state is called to guarantee these terms in a market economy and provide the social orientation of his development.
Keynesians direction. Founder of economic theory John Meynard Keynes (1883 - 1946) in theory grounded the necessity of adjusting of the developed market economy by an increase or reduction of demand through a change available and cashless money assay, that will influence on inflation, employment, remove the unevenness of demand and supply of commodities, repress economic crises. John Keynes declared the «rescuer of capitalism», and his theory by «Keynesians revolution in a political economy».
New-Keynesians come from the necessity of more complete account of factors of unstationarity of dynamics of economic processes. An ideologist John Robinson (1903 - 1983) is an author of theory of imperfect competition
Institucional'no is sociological direction. Happened from the Latin word of institutuin is establishment, device, establishment - interpreted very widely; and as the state, corporation, trade unions, and as steady appearance of thought, and as legal norms. The lacks of capitalism register in this direction an economic theory: dominant influences of monopolies, vices of free market element, growing militarization of economy, separate negative lines of «society of consumption» (also as no-spiritual et cetera). This direction an economic theory comes forward in different modifications: socially-psychological in-stitucionalism (T. Veblen), socially - legal (John Kommons) proclaiming basis of economic development legal relations, kon'yunkturovedenie (Uesli to To. Mitchell), formings the methods of prognostication of quantitative changes in an economy. The supporters of institucialism assert that scientifically - technical progress conduces to overcoming of social contradictions, to the solved by mutual agreement public evolution of society from industrial to post-industrial, super-industrial or to new-industrial (I.e. to informative) society. Absolutization of role of technical – economical factors allowed to pull out the theory of convergence (Jn. Gelbreyt, Pitirim Sorokin, Raymon Aron, Jan Tinbergen).
New-institucialism is characterized walking away from absolutization of technical factors, large attention to the man, social problems. Economic theory of ownership (Ronald Kouz) rights, theory of public choice (James B'yukenen) et al change the economic policy of the developed countries, the results of which allow to assert about «socialization of capitalism», about general to change an orientation of the post-industrial's system on comprehensive development of personality, and XXI age is proclaimed the century of man.
Economists are globalism, probing the process of economic evolution. They come from that an evolution is the joint contingently converting of different economies not into one (in obedience to the theory of convergence), but in the different systems which will provide new industrialization as form of economic soceizma, where a man, finally, will occupy the proper him main determining place.
Intellectual objectively - labour direction was engendered in the middle of the XX century (1963). Sources of this direction are in labours of scientific economists and philosophers during practically all of history of development of economic science. Formulated the ideologists of this direction law of maintenance of labour and 4 conformities to the law of intelleсtualisation of labour (1 - intellestualisation of labour takes a place practically at all of basic task forces; 2 - labour of the world aspires to maximum intellestualisation; 3 - labour of ethnic-socio-cultural layers of the industrially developed states aspires to maximum possible intellestualisation; 4 - intellestualisation of labour is provided by a difficult social structure with the constantly rising type of necessities at basic task forces). And also more perfect index of efficiency of labour, taking into account the requirements of society in an unearned period create pre-conditions for successful development of free market relations at the certain public adjusting by the differentiated tax rates on the personal incomes, income of firms, real estate and capital, is offered. The analysis of economic indicators of economic activity in different historical periods testifies to possibility of stabilizing of economy at the defined values of profitability of living labour (relation arrived to the expenses on payment of labour with extra charges in social funds and depreciation of capital).
Valery Alexandrovich Vasiljev (author Intellectually objective - labour direction) Odessa - Khust, 2006