PLAN Page Introduction. This gives rise to the broader subject of macroeconomics, which includes issues of structural change during reforms. Therefore, special methods of analysis and, in particular, modeling of transitional economic processes are needed. Due to the complexity of the monetary expression of some of its components (for example, the intellectual potential of the population), the value of national wealth is calculated very approximately; There are produced income received as a result of internal economic activity, distributed income, which also includes income (or losses, with a minus sign) from exports, imports and other foreign economic transactions. Foreign economic activity is characterized by the following indicators: exports, imports, export-import balance, foreign economic balance of payments.
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Discipline: Economy
Kind of work: Essay
Topic: Macroeconomics
1 Macroeconomics
Introduction
Basic Concepts
2 Gross National Product (GNP)
Added value
Net national product
National income
Real
and nominal GNP
GNP deflator
3 Aggregate demand and aggregate supply
Aggregate demand
Aggregate offer
4 Equilibrium and economic growth
Capital accumulation
Population growth
Technological progress
Conclusion
5 Unemployment
Job loss, job search and natural rate of unemployment
Job search and frictional unemployment
Public Policy and Frictional Unemployment
Real wage rigidity and unemployment expectations
Duration of unemployment
Entry into and exit from the labor market
6 Inflation
Conditions and causes of inflation
Conclusion
Macroeconomics science
Introduction
All science is nothing more than the ordering of thinking.
Albert Einstein
The purpose of economic theory is to explain the behavior of people in the process of production, distribution and use of material
goods and services in a world of limited resources.
Economic knowledge is combined into two parts of economic theory: micro- and macroeconomics.
Unlike microeconomics, which studies mainly the behavior of an individual economic entity (consumer,
firms), in macroeconomics the results and consequences of joint economic activity of all participants in the national economy are studied simultaneously. At the same time, the focus
such indicators of the functioning of the economy as national income, unemployment rate, price level and inflation rate, the state of the state budget and payments
balance sheet of the country, economic growth rates.
The phenomena studied by macroeconomics affect the lives of each of us. Business managers forecasting demand for
their products must anticipate how quickly consumer incomes will grow. Elderly citizens living on a fixed income are interested in how quickly prices will increase.
Job seekers hope that the economy will enter a period of expansion and firms will begin to hire workers. The state of a country's balance of payments largely determines the degree
freedom of its residents to move across state borders. The state of the economy affects everyone.
Macroeconomists analyze the development of the economy as a whole. They collect data on incomes, prices,
unemployment and many other economic indicators relating to different countries and different periods. They then try to formulate a general theoretical approach to explaining
this data.
Basic Concepts
The uniqueness of the subject and method of macroeconomic analysis
determines the use in macroeconomics of concepts that are not found in microeconomics.
As generalizing indicators of the results of the functioning of the national economy for a certain period,
aggregates such as gross domestic product (GDP), gross national product (GNP), net national product (NNP) and national income (NI).
GDP is the sum of added values created over a certain period by all producers producing in
territory of the country. In this case, added value is understood as the difference between revenue and the cost of material costs for the production and sale of products.
GNP is GDP minus the amount of added value created on the territory of the country through the use of factors
production owned by foreigners, plus the amount of added value created abroad through factors owned by citizens of the country.
In a completely closed economy, GDP is equal to GNP. In an open economy, the main sources of discrepancy between GDP and
GNP are the direct activities of foreign firms on national territory (domestic firms abroad), joint ventures, participation of foreign (domestic) workers in
production of goods and services on national territory (abroad), external borrowings (loans). Obviously, GNP is greater than GDP if the income of the owners of factors used abroad is
exceed the income of foreigners from the use of factors belonging to them in the economy of a given country.
NNP is GNP minus depreciation. Depreciation is the equivalent of the amount of depreciation of fixed capital
during the period.
When determining all of the above indicators of the performance of the national economy, we use
market prices. From microeconomics it is known that market prices of goods are completely decomposed into factor incomes: wages, interest, rent and business income. But
This is the case only if the state does not resort to indirect taxes and subventions. The former increase the final sale price, the latter reduce it. Therefore, to find out
the amount of national income created during the period as the sum of all factor incomes must be subtracted from the NNP, measured in sales prices, indirect taxes and subventions added. Otherwise
speaking, national income is NNP measured in factor prices. Indirect taxes are therefore not included in national income and are not considered as factor income
state, but as a transfer payment.
All income can be divided into two types: income from labor and income from property.
Property means any source of legal unearned income. The main types of property are
productive (real) capital, land, residential buildings, securities, licenses and patents, etc. The monetary value of property is the discounted amount of the value of the expected
income from it.
The totality of property owned by private individuals and legal entities, as well as the state, forms the national
wealth.
preservation of value. Money is also a specific type of property that does not generate income at a stable price level.
Liquidity is a type of property (financial asset) that can be used immediately and without costs as a payment
facilities.
Cash balances (cash) of an economic entity - the volume of available
he has means of payment.
Indicators characterizing the amount of income and its use have a flow dimension: quantity per unit of time
(rubles per year, units per month, etc.). The volume of property is measured in stock units: quantity at a certain point in time (rubles, pieces, etc.). Change in stock amount for
the period taken as a unit of time is the magnitude of the flow.
The price level is one of the central categories of macroeconomics, with which equilibrium proportions are determined in microeconomics
exchange of goods, i.e. relative (real) prices of these goods.
The price level is understood as the monetary value of a good—or a set of goods (“basket”)—that serves as a price scale.
When determining the consumer price index, the “basket” includes several hundred of the most important consumer goods
consumption.
Using the production price index, the dynamics of the production cost of a specific group of goods is determined.
There is a deflator...
Pick up fileIn the first and second chapters, I examined fiscal, monetary, and foreign trade policies under conditions of a floating exchange rate with high and low capital mobility. And also compared them with each other. From the theory, it becomes clear that stimulating fiscal policy with a floating exchange rate is completely replaced by a reduction in net exports: the trade balance deteriorates exactly by the amount of the increase in government spending. An increase in the money supply affects the economy not through the interest rate, but through the exchange rate, which stimulates external demand, increases net exports, employment and national income.
A floating exchange rate regime with low capital mobility makes foreign trade policy ineffective from a macroeconomic point of view, since the increase in net exports due to protectionist government measures is fully compensated by its subsequent reduction as a result of the appreciation of the national currency. The only difference from the situation with low capital mobility is that the degree of appreciation of the national currency in this case is greater, and, therefore, the economy returns to its original state faster.
The main thing that follows from the analysis is that in an open economy, the results of macroeconomic policy largely depend on the exchange rate regime and the degree of international capital mobility.
Fiscal policy affects total income under both fixed and floating exchange rates. However, its effectiveness strongly depends on the degree of capital mobility. With a fixed exchange rate, the effectiveness of fiscal policy increases as the degree of capital mobility increases, and with a floating exchange rate, on the contrary, it decreases. This is because expansionary fiscal policy leads to an increase in interest rates and, consequently, to capital inflows. The scale of this influx will be greater, the higher the degree of capital mobility. But if, under a fixed exchange rate regime, a surplus in the balance of payments leads through the mechanism of foreign exchange interventions to an increase in the money supply, which enhances the effect of fiscal policy, then under a floating exchange rate, the result of a surplus in the balance of payments is an increase in the price of the national currency and a reduction in aggregate demand.
In the practical part of this work, I examined the problems of the currency regulation system of the Republic of Belarus, which is a set of subjects and objects of regulation, as well as a set of tools used by the former in relation to the latter to achieve the goal of ensuring a stable exchange rate of the national currency.
One of the subjects of currency regulation is the National Bank of the Republic of Belarus. The main goal of which is to ensure the internal and external stability of the national currency. To achieve this goal
According to the Main Directions of the Monetary Policy of the Republic of Belarus for 2009, a more flexible approach to exchange rate policy was determined, ensuring the overall stability of the exchange rate of the Belarusian ruble to a basket of foreign currencies: US dollar - euro - Russian ruble. These foreign currencies, which determine the economy of Belarus, were included in the basket in equal shares.
The advantages of pegging the Belarusian ruble to a basket of foreign currencies are as follows:
- ? firstly, the continuity of the exchange rate policy is maintained, which is reflected in minor fluctuations in the dollar at the initial stage;
- ? secondly, more efficient management of the real exchange rate of the Belarusian ruble is ensured without a significant loss of competitiveness in foreign markets;
- ? thirdly, in the context of the global financial crisis, pegging to a basket of currencies makes it possible to reduce the risks of exchange rate fluctuations. The disadvantage is the increased volatility of the dollar exchange rate, which increases uncertainty regarding its future value for market participants, but at the same time the possibilities for short-term currency speculation are reduced. The use by the National Bank of the Republic of Belarus of a mechanism for pegging the exchange rate of the Belarusian ruble to a basket of foreign currencies is the first step towards gradually increasing the degree of exchange rate flexibility in the context of the transition to inflation targeting.
In the current conditions of socio-economic development of the Republic of Belarus, the prerequisites for introducing a floating exchange rate have not been achieved for the following reasons:
Firstly, in the conditions of a high degree of openness and dollarization of the Belarusian economy, refusal to fix the exchange rate can lead to a sharp intensification of inflation and devaluation processes, and therefore to a weakening of the banking system of the Republic of Belarus (Table 3.2.3).
Secondly, the insufficient development of the market for forward foreign exchange transactions in the domestic economy makes forward coverage unavailable for most subjects of foreign economic activity and increases the costs of uncertainty, as a consequence of exchange rate fluctuations.
Thirdly, the most convincing argument in favor of a floating exchange rate is the high degree of capital mobility and a developed stock market, which is also absent in the Republic of Belarus.
Monetary policy in the 1st quarter of 2010 was carried out taking into account the emerging macroeconomic situation and was aimed at maintaining financial stability. The main measures of monetary policy were developed and implemented by the National Bank jointly with the Government of the Republic of Belarus. The main result of the work of the past three months (table):
- ? it is ensured that the exchange rate of the Belarusian ruble to the value of a basket of foreign currencies is maintained within the established corridor of acceptable values;
- ? a reduction in the level of interest rates in the money market has been achieved;
- ? credit support for the economy by banks has been expanded;
- ? continued growth of assets and regulatory capital of the banking sector;
- ? reliable and secure functioning of the payment system is ensured.
At the end of the first quarter, as a result of operations in all segments of the foreign exchange market, there was a net demand for foreign currency in the amount of $1,195 million, which is $132 million, or 12.4%, more than in the same period in 2009 d. At the same time, the structure of net demand for foreign currency for the period under review differs significantly from that which developed in January - March 2009. If at the beginning of last year negative expectations from the population led to increased demand for foreign currency, then in 2010 The main factor behind the imbalance was the accelerated growth in demand from business entities. Banks - residents of the Republic of Belarus for January - March 2010 formed a net supply of foreign currency in the amount of 136 million US dollars. This is $510 million, or 4.7 times, less than for the same period in 2009. The foreign currency deficit in the domestic foreign exchange market during the analyzed period was compensated mainly by interventions of the National Bank and the Ministry of Finance of the Republic of Belarus.
Which are constantly changing.
Although macroeconomics does not take into account the processes occurring within macroeconomic markets, the macroeconomics course studies the interaction of these markets and builds, on their basis, theories of general equilibrium across the entire economy and the theory of macroeconomic dynamics (i.e., the theory of economic growth and economic cyclicality).
Macroeconomics studies the scale of the economy (in particular the scale of production and the scale of prices) and changes in the scale of the economy, abstracting from changes in proportions that are studied in microeconomics. Those. macroeconomics will not, for example, be interested in the relationship between the prices of different goods, but will be interested in their joint changes during inflationary processes.
Also, the sphere of interests of macroeconomics includes global quantitative relationships in the economy, while qualitative analysis of these relationships belongs rather to the sphere of interests of General Economic Theory, rather than to macroeconomic analysis. And since macroeconomics only builds models of an applied nature, it should not be blamed for errors associated with the underdevelopment of the theoretical base.
The main methods of macroeconomics are:
Aggregation, i.e. constructing summary indicators that describe the entire economy, for example, instead of many indicators describing individual economic entities and individual markets;
Abstraction, which in macroeconomics means the refusal to analyze individual characteristics and insignificant aggregate indicators;
Verbal and Mathematical Modeling, i.e. presentation of macroeconomics as a set of relationships that can be described by logical and mathematical formulas. Moreover, mathematical models in macroeconomics at the current stage are the main tool for analysis and forecasting.
The goals of macroeconomic modeling are to determine the optimal (equilibrium) state of the economy to which it strives; as well as macroeconomic forecasting, including forecasting such macroeconomic parameters as gross product, price level or inflation, employment or ... I.e. The goals of macroeconomic analysis are social and state in nature, which means that it is representatives of government authorities who should use macroeconomic analysis. They, however, have their own vision of the goals of macroeconomic research, because they demand that macroeconomics (as a science) provide tools for managing the economy so that everything is obedient to the state.
This course consists of two parts:
1) analysis of individual markets in macroeconomics (meaning the analysis of the following macroeconomic markets: the goods market; the labor market; the money market and the capital market);
2) analysis of the interaction of macroeconomic markets in the process of establishing general economic equilibrium, as well as in the process of dynamic changes in the economic system.
We will look at three types of macroeconomic dynamics:
1) economic cyclicality;
2) inflationary process;
3) .
This macroeconomics course is intended primarily for students of economics, but, as you know, it is desirable for everyone to know economics, and in particular macroeconomics! This course was originally created as a standard macroeconomics course for distance learning, but the author very soon noticed that the methods of standard macroeconomics were, to put it mildly, incorrect in some cases. As a result, the standard macroeconomics course was supplemented with non-standard models. And it seems to the author that in this form macroeconomic theory better describes reality.
You can select any topic here, by going to which you will get access to the full macroeconomics textbook and its abbreviated version, as well as examples and models illustrating the macroeconomics textbook; and also tasks for reflection. Registered users of the site also have the opportunity to request advice on macroeconomics. For the convenience of users, we simultaneously place tasks on macroeconomics in a separate section.
Macroeconomics theory
Despite the fact that macroeconomic questions were posed and studied back in the 18th century (starting with the work of D. Hume in 1752, devoted to the study of the connections between the balance of trade and the price level), macroeconomics as a science appeared only in the 30s - 40s XX century. The catalyst for this was the Great Depression of the 1930s, which led to a huge decline in production in most Western countries, thereby creating unprecedented unemployment, as a result of which a significant part of the population of these countries was on the brink of poverty. Democratization that took place after the First World War also played an important role. The democratic government was concerned about the catastrophic decline in the standard of living of the population and needed to develop economic ways to combat the depression.The appearance in 1936 of the work of the English economist John Maynard Keynes “The General Theory of Employment, Interest and Money” laid the foundation for macroeconomics as an independent economic science. Keynes's central idea is that one is not always capable of self-regulation, as the classics believed, since there may be a certain price rigidity. In this case, the economy cannot independently recover from depression due to the price mechanism, but intervention in the form of stimulation is required. The emergence of the Keynesian approach was subsequently called the “Keynesian revolution” in economics.
It should also be noted that there is one more circumstance that contributed to the development of macroeconomics. This is the emergence of regular national accounts statistics. The availability of data made it possible to observe and describe the dynamics and relationships of macroeconomic phenomena, which is the first necessary step for the development of macroeconomic science.
In the process of development in macroeconomics, two main schools have emerged.
The classical school believed that free markets themselves would lead the economy to equilibrium in the labor market (to full employment) and efficient distribution of resources and, accordingly, there was no need for government intervention.
The Keynesian school proceeded from the presence of a certain inflexibility of prices and, therefore, the failure of the market mechanism in terms of achieving , in particular this related to the presence of disequilibrium in the labor market, at least in the short term. As a result, such failure of the market mechanism requires government intervention, taking the form of stabilization policy.
The Keynesian model described the economy quite adequately and was widely used until the 70s of the 20th century. In the 70s, a new problem arose: a combination of stagnation and high inflation. Many saw the reason for this situation in the government's active intervention in the economy. The so-called Keynesian counter-revolution took place. The answer was a revision of the classical paradigm and the emergence of the doctrine of monetarism, led by its founder Milton Friedman. They returned to the idea of self-regulating markets and made the supply of money central. A stable money supply, rather than continuously changing it to pursue activist Keynesian policies, is the key to a stable macroeconomic situation, according to monetarists. Monetarism gave rise to a new wave of economic theories that were based on the self-regulation of markets and formed neoclassical macroeconomics.
In parallel, an alternative neo-Keynesian direction developed, but now on the basis of corresponding microeconomic behavioral models.
Problems of macroeconomics
Macroeconomics is a science that studies the behavior of the economy as a whole or its large aggregates (aggregates), while the economy is considered as a complex large single hierarchically organized system, as a set of economic processes and phenomena and their indicators. Macroeconomics is a branch of economic theory.Unlike microeconomics, which studies the economic behavior of individual (individual) economic entities (consumer or producer) in individual markets, macroeconomics studies the economy as a whole. Explores problems common to the entire economy and operates with aggregate values, such as gross domestic product, national income, aggregate demand, aggregate consumption, investment, the general price level, unemployment rate, public debt, etc.
The main problems that macroeconomics studies are: economic growth and its pace; economic cycle and its causes; employment level and unemployment problem; general price level and the problem of inflation; interest rate level and money circulation problems; state, the problem of financing the budget deficit and the problem of public debt; state and problems of the exchange rate; problems of macroeconomic policy.
Methods of macroeconomics
A method is understood as a set of methods, techniques, and forms of studying the subject of a given science, i.e., a specific toolkit for scientific research.Macroeconomics uses both general and specific methods of study.
General scientific methods include:
Method of scientific abstraction;
- and synthesis;
- method of unity of historical and logical;
- system-functional analysis;
- economic and mathematical modeling;
- a combination of normative and positive approaches.
The main specific method of macroeconomics is macroeconomic aggregation, the combination of phenomena and processes into a single whole. Aggregated values characterize the market and its changes (market interest rate, GDP, GNP, general price level, inflation rate, unemployment rate, etc.). Macroeconomic aggregation extends to economic entities (households, firms, government, abroad) and markets (goods and services, securities, money, labor, real capital, international, currency).
In macroeconomics, economic models are widely used - formalized descriptions (logical, graphic, algebraic) of various economic phenomena and processes to detect functional relationships between them.
Macroeconomic models allow us to abstract from minor elements and focus on the main elements of the system and their interrelations. Macroeconomic models, being an abstract expression of economic reality, cannot be comprehensive, therefore in macroeconomics there are many different models that can be classified according to various criteria:
By the degree of generalization (abstract theoretical and concrete economic);
- according to the degree of structuring (small-sized and multi-sized);
- from the point of view of the nature of the relationship of elements (linear and nonlinear);
- by degree of coverage (open and closed: closed - for studying closed; open - for studying international economic relations);
- taking into account time as a factor determining phenomena and processes (static - the time factor is not taken into account; dynamic - time acts as a factor, etc.).
There are many different models in macroeconomics: the circular flow model; Keynes cross; IS-LM model; Baumol-Tobin model; Marx's model; Solow model; Domar model; Harrod model; the Samuelson-Hicks model, etc. All of them act as a common toolkit, without having any national characteristics.
In each macroeconomic model, the selection of factors that would be significant for the macroanalysis of a specific problem in a specific period of time is extremely important.
In each model, two types of variables are distinguished:
A) exogenous;
b) endogenous.
The first ones are introduced into the model from the outside; they are specified before the model is built. This is the background information.
The latter arise within the model in the process of solving the stated problem and are the result of its solution.
When building models, four types of functional dependencies are used:
A) definitional;
b) behavioral;
c) technological;
d) institutional.
Definitional (from Latin definitio - definition) reflect the content or structure of the phenomenon or process being studied. For example, the aggregate demand in the goods market is understood as the total demand of households, the investment demand of the business sector, the demand of the state and abroad.
Behavioral - show the preferences of economic subjects.
Technological - characterize technological dependencies in the economy, reflect connections determined by the level of development of productive forces, scientific and technological progress. An example is a production function showing the relationship between volume and factors of production:
Institutional - express institutionally established dependencies; determine the connections between certain economic indicators and government institutions that regulate.
Development of macroeconomics
Let us make an important, in our opinion, remark. Everyone has their own optimal level. If this indicator reaches its critical value, then this is bad. For example, zero unemployment, no inflation, and full capacity utilization have the same negative impact on the ECONOMY as high unemployment, hyperinflation, and idle capacity. The existence of a theoretically optimal level of any macroeconomic indicator is determined by the model of the struggle between supply and demand. In addition, when any indicator reaches its critical values, the economy loses room for maneuver. For example, the money supply can be increased by lowering the interest rate. If it already has a zero value, then we will be deprived of the opportunity to carry out this corrective action. Even if this rate is not zero, there is a certain critical value after which its reduction has no impact on the economy. Imagine a car engine that is constantly running at the limit of its capabilities. How long will it work? However, sometimes some countries can, at least temporarily, neutralize the critical values of macroeconomic parameters with original economic decisions. A striking example of this situation is the Japanese economy. In this unique country, the central bank policy rate is 0.5%, and inflation is negative, while the Japanese economy is still developing well.Let us note one more feature of market volatility and inconstancy. If the pace of economic development is too fast, it can quickly become overheated, followed by a recession that is usually as rapid as the previous recovery. Therefore, the task of government regulation is not only to promote economic development, but also to regulate the speed of growth. Uniform economic development can last much longer than rapid growth, and the level and speed of decline will be much less. In addition, with moderate economic growth, the amplitude of fluctuations in parameters around the average (equilibrium) state will be smaller and, therefore, easier to keep under control.
For most macroeconomic indicators, what is important is not their absolute values, but the predictability of changes and the ability to control these indicators. For example, the most dangerous thing is not a high level of inflation, but inflation that is out of control and is not predictable.
In addition, the impact of published economic indicators on the financial market is determined, again, not by their meaning, but by the expectations of market participants. Thus, if excellent economic indicators have been coming out for a long time, then some market participants may decide that the economy is in excellent condition, while others may decide that it is already in an “overheated” state, after which a recession is inevitable. Time will determine which opinion will win in the market. Moreover, the result of this struggle may in no way correlate with the real economic state of the country. Changes in prices and, especially, exchange rates that occur as a result of such a struggle can negatively affect the country's economy. Therefore, it is difficult to make an unambiguous conclusion about what is the root cause of such a situation: the truly “overheated” state of the economy, which led to a recession and the winners in the market correctly guessed this state; or the victory of these participants in the market led to changes in exchange rates, which, in turn, negatively affected the economy.
For macroeconomic analysis, the greatest interest is not the absolute values of certain indicators, but their changes. Therefore, most indicators are published as percentages relative to the previous period. Usually the comparison occurs with the previous month, quarter, year. And it is the analysis of the direction and rate of change of the indicator, as well as its comparison with changes in other indicators, that makes it possible to predict the development of the economy of a particular country.
Macroeconomics concept
Unlike microeconomics, which analyzes how economic entities behave and how they interact, macroeconomics examines the laws of behavior of the economy as a whole. It would seem that it is known how the individual elements of the whole behave, then it is enough to add them up to get an idea of the whole. Meanwhile, this is not so. When added, new phenomena, concepts, mechanisms and patterns appear that cannot be understood while remaining within the framework of the behavior of consumers and producers. For example, so far we have looked at individual products, of which there are a great many on the markets. Adding up oil, coal, vegetables, grains, banking services, financial transactions, etc., we get a certain amount. It is called the national product, which has no tangible form and exists, it would seem, only in the imagination of economists. Meanwhile, this is a very real concept, and so key that the size of employment and unemployment, the economic power of states, and much more depend on it. Busy people with a keen understanding of business affairs may have little understanding of how the economy as a whole behaves. Meanwhile, their fate largely depends on this, and not just on the market where these firms operate. For example, many now blame this or that industry, this or that enterprise for the fact that they do not work well. But if the entire economy is in deep crisis and stagnation, i.e. works poorly, then blaming individual firms for sluggishness and inability to adapt to new circumstances is not always fair, and sometimes simply ridiculous. Just like blaming an unemployed or low-paid worker for “not wanting to work.” Lazy people, of course, are everywhere, but they don’t make the weather. Very often, people and companies become victims of circumstances over which they have no control. But it would be equally absurd to blame everything on “fate”, the “wheel of history”, etc. Economic science gives every educated person the opportunity to understand why the economy as a whole behaves the way it does and not otherwise, and even learn to predict how things are going in the entire national economy, and not just in the sector that directly concerns you. Macroeconomics largely depends on the behavior of the state, its macroeconomic policy, and on ongoing and planned reforms. In a democratic society, citizens must understand these issues if they want to actively influence their own destinies and not just be passive objects of experiments by some rulers and politicians. In macroeconomics, not only all products and services are added up, but also their prices and, therefore, income from factors of production. And so it turns out that the general price level is determined not only by the laws of supply and demand we have discussed, but also by certain financial categories, such as the amount of money in circulation, the budget deficit, the rate of interest, etc. We already talked about these concepts in the first section, but only in passing. Meanwhile, they deserve special attention, because Not a single market economy, or indeed any economy, can do without them. As a result, monetary and financial flows are formed in the macroeconomy, which seem to oppose the material flows of products. They are not just a passive reflection of material flows, but play an active role and have special patterns, without which it is simply impossible to understand the behavior of the modern economy.Functions of macroeconomics
Macroeconomics performs the following main functions:1. cognitive, because it studies and explains economic processes in macroeconomics,
2. practical, since it gives recommendations for carrying out,
3. prognostic, because it evaluates promising options for macroeconomic dynamics,
4. ideological, because affecting the interests of the entire society, it shapes the economics of its members.
The main economic actors in macroeconomics are:
1. Households;
2. Enterprises and firms;
3. State;
4. Foreign countries (participants in foreign economic relations).
All subjects of macroeconomics, carrying out economic activities, rely on their interests and motives, react to changes in the general and private economic situation, to the actions of other subjects, both internal and external (abroad). When considering the behavior of economic entities, it is necessary as an alternative, meaning the possibility of different (at least two) options for economic behavior in a given situation.
This is due to the possibility and need to obtain alternative (income). The owner of resources (means of production or labor) could have received such a benefit with another, alternative option for their use, if he had not abandoned it (or perhaps if he had noticed it) in favor of the option that actually took place. This feature of the behavior of subjects is important to know and take into account when forecasting economic growth of the macroeconomy in a number of other situations.
The behavior of subjects in connection with their expectations is also interesting and significant for macroeconomics. Expectations are an assessment of the current economic situation from the perspective of the past or future period. Hence there are two types of expectations: based on the past and based on the future.
There are three types of expectations from the perspective of the future:
1 - statistical, which means that subjects are guided by the immutability and preservation of the economic situation;
2 - adaptive, meaning that subjects adapt their behavior to obvious or identified changes in the situation;
3 – rational expectations are the rational behavior of subjects based on the collection and analysis of the entire set of information about changes in the economy in the future period.
Objectives of macroeconomics
The economy of any state cannot develop without defining the goal of its development. is one of the main functions of economic policy. In each specific period of economic development, it determines the most important tasks facing the economy.An economic goal is understood as the main direction of economic development, which is revealed through the assigned tasks.
Over the entire period of development of society, a fairly large number of goals have been put forward as the most important goals underlying economic policy. Let's give them a brief description.
1. Economic growth. The named economic goal for implementation requires, first of all, the solution of a number of problems. Economic growth can be achieved through the most efficient use of all available resources and the achievement of the maximum possible employment. Economic growth presupposes that the volume of national production in the current period exceeds the volume of production obtained in the previous period.
8. Trade balance. This goal means that each state, participating in the international division of labor and entering into international ones, should not “live in debt” at the expense of other states, i.e. it is necessary that the quantity of goods sold coincide in price with the quantity of goods purchased from other countries . To achieve this goal, the government must create a system of incentives for national production that make national products competitive in the world market.
To determine the general direction of development of the national economy, the state puts forward one or another goal, or several goals at once.
An important condition for goal setting is their compatibility, since the named goals may contradict each other. For example, if two goals are simultaneously put forward: economic efficiency and full employment, the state will not be able to achieve either of them, or one will be achieved to the detriment of the other. Economic efficiency presupposes the use of the best resources supplied by the factors of production, while achieving full employment presupposes the employment of everyone who wants to work, although not all participants in production will have sufficiently high (equal) qualifications.
Assessment of the performance of the economy based on the implementation of set goals is carried out using the calculation of macroeconomic indicators.
The main macroeconomic indicators are the following:
1. Gross domestic product (GDP).
2. Gross national product (GNP).
3. Net national product (NNP).
4. National Doen.
5. Personal income.
6. Disposable income.
7. Disposable income.
Gross domestic product is the value of final products created over a certain period of time by producers producing in the territory of a given country using factors of production located in the territory of that country. Gross domestic product is equal to gross national product in a closed economy.
Gross national product is the material goods and services produced in the economy over a certain period of time (usually a year) through the use of production factors owned by citizens of a given country, including on the territory of other countries.
Material goods and services are understood as goods that are purchased during the year for final consumption and are not used as an intermediate product for further processing.
Gross national product is calculated in several forms.
Initially, nominal GNP is calculated - the amount of goods and services produced by a nation during the year, calculated at current prices. This product includes the increase in the product due to the increase in inflation. Therefore, to reflect the real picture, it is necessary to calculate real GNP.
Real GNP is understood as the amount of final goods and services produced by a nation during the year and calculated taking into account inflationary price increases.
In addition, to regulate the economy, another indicator is calculated, which makes it possible to develop the main directions in regulating the economy - potential GNP.
Potential GNP is the amount of goods and services that could be created if the economy had the most rational distribution of product and the maximum possible employment. This is impossible in a market economy, so this indicator is calculated as a theoretical value desirable for the economy. The difference between potential and actual GNP is the GNP deficit. The task of the state economy is to reduce the GNP deficit.
Even the real BHII has significant errors, since it includes repeated counting, i.e. for one industry the product created by it is final, but for another it is intermediate or raw material. If we are freed from re-counting, we will get the net national product (NNP).
Net national product (NNP) is equal to the difference between real gross national product (GNP) and depreciation charges (A).
Depreciation charges (A) are understood as those made for the restoration of fixed capital spent in the production process, i.e., funds necessary to replace equipment, machinery and mechanisms worn out during the reporting period (year).
NNP=GNP-A.
The gross national product is calculated in two main forms: in physical form and in monetary or value form.
The cost form of GNP makes it possible to compare the functioning of the economy in different periods.
The natural-material form of GNP allows for the distribution of the product into personal consumption, industrial consumption and government consumption. All manufactured product is produced for the purpose of consumption by three main entities: households, firms and the state. If a society produces more personal consumption product, then households should receive income sufficient to consume all the product produced. If more government consumption products are created in society, then with the help of taxes, income will be redistributed in favor of the state so that the product is also fully consumed, and “extra” money does not accumulate in the hands of other entities due to the lack of opportunity to spend it.
Another important indicator is the national one - the amount of goods that was created by the nation during the period of its existence.
One of the central categories of macroeconomics is the price level (P). In macroeconomics, there is an indicator characterizing the level of price changes. It is calculated as the ratio of the sum of prices of consumer goods of the current period to the sum of prices of consumer goods of the previous period. Consumer price index:
P0 - the sum of prices of consumer goods over the past period;
?P1 is the sum of prices of consumer goods for the current period.
All NNP consists of goods and services for personal and industrial consumption. Goods and services produced for personal consumption are called consumer goods, and the prices set for them are called consumer prices.
It should be noted that the range of consumer goods includes a number of products necessary for normal consumption. Their minimum set is called the “consumer basket” (?P). The calculation of the consumer basket serves to determine the minimum pension, benefits and other social payments controlled or carried out by the state.
By calculating the consumer basket, the inflation rate is determined.
Net national product includes enterprise profits and wages.
After paying payroll taxes, the population receives personal income in the form of nominal wages - a sum of cash.
Personal income is not the amount of money that a person can spend, because in society there are taxes and mandatory payments that each income recipient must pay.
If we subtract all taxes and mandatory payments and add direct transfers, then we will get disposable income, i.e. the amount of money that a person can spend at his own discretion.
In addition to direct transfers in the form of pensions and scholarships, there are indirect transfer payments in the form of maintaining socially low prices for a number of products, for transport, medicine, and education, in order to make these benefits more accessible.
Direct and indirect transfers are understood as government expenditures to maintain a normal standard of living for various categories of the population, carried out without taking into account labor costs.
Disposable income is also influenced by a number of factors:
Self-service;
self-sufficiency;
;
ecology;
leisure.
For example, self-care and self-sufficiency lead to an increase in disposable income based on creating services for oneself (laundry) or products (vegetables and fruits grown in the country).
Deterioration of environmental indicators, on the contrary, leads to an increase in costs associated with maintaining health.
Object of macroeconomics
The modern science of a socially regulated market economy has been created over more than half a century in two stages. First, a theory was formed to explain the behavior of a market subject within the local market. This outlined the sphere of private business. The emergence of microeconomics and the microeconomic theory that studies it marked a qualitative leap in the development of economic science, because it was microeconomics that reduced the behavior of individual producers and consumers to the rational market logic of the actions of the buyer and seller - to the desire to achieve the maximum net benefit.Macroeconomic theory is the most complex and, at the same time, important section of economic science. Within the framework of economic theory, macroeconomics is represented as a set of aggregated economic indicators. Macroeconomics is a branch of economics that studies economic phenomena such as inflation, labor productivity growth rates, interest rates, unemployment, and economic growth. For the analysis of macroeconomics, three methods are important: “mathematical”, “balance sheet” and “statistical”. The main parameters of macroeconomics are quantitatively measurable. This is why macroeconomic models take the form of mathematical equations. Macroeconomic models are balanced, which assumes that all markets ensure equality in sales volumes of production, income and expenses, aggregate demand and aggregate supply. And although in reality such macroeconomic equilibrium is unattainable, it is the desire for an equilibrium state that distinguishes macroeconomics from microeconomics.
Indeed, temporary disequilibrium in the micromarket provides superiority to either the buyer or the seller. But in macroeconomics, such disequilibrium brings only losses to society. Thus, only balance can provide macroeconomics with efficiency. The specificity of macroeconomic analysis is determined by those processes and problems that are detected only at the macroeconomic level and that can only be solved by macroeconomic means. We are talking about the interdependence of seven macroeconomic parameters - employment, aggregate demand, aggregate supply, national income, inflation, economic growth, business cycle. Within the macroeconomic approach, the economy appears as a single, extremely generalized market in which “one total buyer” (consumer), spending “a single total income,” and “one total seller” (producer), incurring a “single total expense,” interact. This aggregate seller produces a single aggregate product that is equally suitable for personal and productive consumption.
In macroeconomics, the two subjects of the market economy are joined by two new ones: “state” and “abroad”. Doubling the number of subjects and the specific problems arising from this complicate macroeconomic analysis; it is carried out in two stages: first, the specifics of the functioning mechanism of each market separately (the market for goods, labor, money and securities) are clarified, and then all these markets are balanced within the framework of a single macromarket.
Market models are divided into “statistical” and “dynamic”. A statistical model is a kind of “freeze frame” that captures the economic process in its initial and final state. The transition itself from the initial to the final state is not reflected in statistical models. The fundamental concept of macroeconomic theory is the category of “economic equilibrium”. Macroeconomic equilibrium means a state of the national economy when equality of supply and demand is simultaneously established in all markets. Economic equilibrium occupies a central place in macroeconomic theory because it expresses the optimal state of the economy and therefore forms a criterion for an objective assessment of the real situation in the country's economy. The movement towards economic equilibrium is the desire for equilibrium prices, full employment, overcoming inflation and sustainable economic growth. At the same time, it should be recognized that macroeconomic equilibrium is only an ideal structure; in reality it is not achievable. The following conditions are accepted as the initial and mandatory prerequisites for macroeconomic equilibrium:
1. equality of volumes of total production of goods and total purchase and sale of goods (everything that is produced is sold);
2. none of the economic entities is interested in changing the volume of their market transactions;
3. Failures in production and delays in the sale of goods are excluded.
Main macroeconomic problems Macroeconomics is a science that studies the economy as a whole, as well as its most important sectors and markets. The term “macro” (large) indicates that the subject of study of this science is large-scale economic problems. Macroeconomics represents one of the youngest and most promising branches of economic theory. Macroeconomics began to take shape as an independent scientific discipline in the 30s of the twentieth century. Its origin is associated with the name of the outstanding English economist John Maynard Keynes (1883-1946). His main approaches to the study of macroeconomic processes are set out in his work “The General Theory of Employment, Interest and Money” (1936). In this work, Keynes examined the main macroeconomic categories: the volume of national production, the level of prices and employment, consumption, savings, investment, etc. However, macroeconomic analysis itself appeared much earlier. The first attempt to describe macroeconomic patterns was made by a representative of the French school of physiocrats, Francois Quesnay (1694-1774). For the first time in economic theory, he introduced the concept of “reproduction” as a constant repetition of the process of production and sales. A description of the reproduction process is contained in the “Economic Table” (1758) and in the comments to it (1766). Quesnay's "Economic Table" is the first macroeconomic model that identifies the main large-scale proportions in the economy. A significant role in the development of macroeconomic analysis was played by the schemes of simple and expanded reproduction of capital.
Marx (1818-1883), general equilibrium theory of Leon Walras (1834-1910). In the 30s of the twentieth century, many scientists, independently of Keynes, made attempts to carry out macroeconomic analysis. In particular, the famous Norwegian scientist, Nobel Prize laureate in economics Ragnar Frisch (1895-1973) is at the origins of the concept of “macroeconomic”. It was he who outlined the research program for this discipline. In the article “Problems of Contagion and Problems of Momentum in Economic Dynamics” (1933), Frisch distinguishes between micro- and macroeconomic analysis. He also proposes and himself uses the method of macroeconomic analysis of fluctuations, which allows one to build a theoretical model and study the correspondence of its results to real facts.
Mention should also be made of the Dutch Nobel Prize-winning economist Jan Tinbergen (1903-1994), who built his country's first macroeconomic model before doing more extensive research for the League of Nations in 1939. Many aspects of macroeconomics were developed by such scientists as J. K. Galbraith, E. Domar, S. Kuznets, V. Leontiev, G. Myrdal, P. Samuelson, I. Fischer, M. Friedman, E. Hansen, R. Harrod et al. Internationally recognized results in macroeconomic research were also obtained by domestic scientists, among whom, first of all, D. Kondratiev and V.S. Nemchinov. The focus of macroeconomics is on the following main problems: ensuring economic growth; general economic equilibrium and the conditions for its achievement; macroeconomic instability, measurement and modes of regulation; determining the results of economic activity; the state of the state budget and balance of payments of the country; cyclical nature of economic development; optimization of foreign economic relations; social protection of the population and others.
To understand the subject of macroeconomics, it is necessary to distinguish between expost macroeconomic analysis, or national accounting, and ex ante analysis - macroeconomics in the proper sense of the word. National accounting (ex post) determines the macroeconomic position of the economy in the past period. This information is necessary to determine the degree of implementation of previously set goals, develop economic policy, and comparative analysis of the economic potential of different countries. Based on ex post data, existing macroeconomic concepts are adjusted and new ones are developed. Analysis (ex ante) is a predictive modeling of economic phenomena and processes based on certain theoretical concepts. The purpose of such an analysis is to determine the patterns of formation of macroeconomic parameters. Macroeconomics provides certain recommendations for developing state economic policy based on an analysis of real economic parameters.
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