The development of social production, which depends on many factors, is not uniform and continuous. In some periods, the growth of total production is very fast, in other years it is slower, sometimes even a decline is observed. Thus, the economic development of countries does not occur evenly, i.e. it is characterized by macroeconomic instability, which manifests itself in unemployment and inflation in the form of a cyclical development. The latter assumes such a single process of economic development, in which the phases of crises and upswings naturally alternate. Moreover, the general oscillatory movement of business activity consists of several components with different periods and mechanisms of oscillations. This process is carried out around the equilibrium position, which is considered the normal state of the economy. Therefore, a cycle can be called wave-like oscillations of various durations around the equilibrium position. Or, in other words, the economic cycle is the period of time between two identical trends in economic activity for several years.

Individual economic cycles differ from each other in duration and intensity, but they all have the same phases: crisis (recession), depression (stagnation, bottom of the recession), recovery (rise, expansion), peak (boom, top of the cycle) .

The main phases of the cycle are the crisis and the rise and the points corresponding to them - the maximum decline as the lowest point and the peak - the top of the rise.

A crisis characterized by a sharp decline in business activity - there is an excess of goods in comparison with the demand for them from consumers, which leads to lower prices. Since the created goods do not find a market, commodity producers curtail production, the number of unemployed increases sharply, the incomes of the population decrease, which causes a further reduction in demand. As a result, many entrepreneurs are insolvent and fail. The crisis is aggravated by the loss of confidence of market economy entities in each other, shocks in the credit system.

Distinctive is the crisis that took place in England in 1825. Then it broke out again in England and engulfed the USA (1836). The world crisis first occurred in 1857. Later, such crises began to recur with a frequency of 8–10 years. The crises of 1900–1903 and 1929–1933 were characterized by the greatest destructiveness. Crisis of 1929–1933 began with a crash on the stock exchange on "Black Tuesday" October 29, 1929. The volume of production in countries covered by an economic recession fell by 44%. The turnover of world trade fell by 61%. The number of unemployed reached 40 million people (every fourth found himself without a job). After the Second World War, the economies of developed countries experienced recessions in 1948-1949, 1953-1954, 1960-1961, 1980-1984.

The crisis is followed depression, which may be long-term. In this phase, production and employment, having reached their lowest level, remain practically unchanged. The "surplus" of goods is gradually dissipated. The economy continues to have a high level of unemployment. The supply of loan capital increases, but since the demand for them on the part of business is low, the rate of loan interest falls. Despite the listed negative points, many economists consider this phase of the economic cycle as preparation for the subsequent recovery: here the spread of technical achievements in the national economy is carried out, the structure of production is changing, which is freed from unprofitable enterprises and unpromising industries. The period of depression is characterized by a state of uncertainty and erratic actions of business entities, especially resellers, stock agents. Even after the recession has stopped, it is difficult for entrepreneurs to restore trust in each other.

However, economic conditions are gradually stabilizing, and the next phase of the cycle begins - revival. At first, it is characterized by a slight gradual increase in investment, production volumes, employment, prices, interest rates. The conditional boundary of this phase can be drawn at the point where macroeconomic indicators reach the pre-crisis level. Then a rapid increase in production begins. Unemployment is reduced to a minimum. The demand for loan capital and the rate of loan interest are growing. Rapid development continues until the economy reaches the highest point of development and the cycle ends.

Along with general cyclical crises affecting all spheres of the national economy, periodically there are partial crises, covering any one sphere of the economy, for example, credit relations. Sectoral crises are taking place, spreading to individual branches of industry, agriculture, and transport. Structural crises (energy, raw materials, food) are caused by large disproportions in the development of the national economy. At the same time, cyclical development, despite its oscillatory movements, reveals a strategic growth trend, i.e. has a progressive direction of movement.

The reasons that cause changes in the economic activity of production over time are explored by the theory of economic cycles, which is sometimes called the theory of economic conditions. Today, there are many such theories. However, the nature of the cycle is still one of the most controversial and poorly understood problems. Researchers involved in the study of market dynamics can be conditionally divided into those who do not recognize the existence of periodically repeating cycles in public life, and those who take a deterministic position and argue that economic cycles manifest themselves with a regular ebb and flow.

Representatives of the first direction, to which the most authoritative scientists of the modern Western neoclassical school belong, believe that cycles are the result of random influences (impulses or shocks) on the economic system, which causes a cyclical response model, i.e. cyclicality is the result of the impact on the economy of a series independent impulses. The foundations of this approach were laid in 1927 by the Soviet economist E. E. Slutsky (1880–1948). After 30 years, this direction has received wide recognition in the West.

Representatives of the second direction tend to consider the cycle as a kind of fundamental principle, an elementary indivisible "atom" of the real world. The cycle in this interpretation is a special, universal and absolute formation of the material world. The structure of the cycle is formed by two opposite material objects that are in it in the process of interaction (Yu. N. Sokolov. Cycle as the basis of the universe. Stavropol, 1995).

Currently, statisticians and economists are not able to give accurate forecasts of the economic situation, but can only determine its general trend. This is explained by the fact that, firstly, it is difficult to take into account all the factors, especially in a period of economic instability and political upheavals. Secondly, the international environment has a significant impact on the national economy. Thirdly, even having correctly identified the trend, it is difficult to predict the exact dates of the passage of phases and change the economic policy in time. Finally, the actions of entrepreneurs can exacerbate undesirable market fluctuations.

More than a thousand types of economic cyclicality are known to modern social science. The table lists the six most common ones, but the economy operates predominantly with the first four of them.

Key Concepts

Two-phase cycle model

Depression

"Bottom"

Opportunistic, counter-cyclical policy

A crisis

Industry crisis

Structural crisis

revival

Climb

Recession

Reduction

Stagnation

Stagflation

Disequilibrium

trend

Cycle phases

Kitchin cycles

Cycle

Mitchell cycles

Four-phase cycle model

Economic conjuncture

Business cycle

Learning goal: find out the objective foundations of cyclic fluctuations and

consider different approaches to explaining cyclicity.

After studying the topic, the student should:

Know:

Causes and manifestations of violations of macroeconomic balance;

reasons for the cyclical development of the economy;

basic concepts of the business cycle;

· concept, structure and types of economic cycles;

technological structures and long waves;

· Positive and negative consequences of the crisis for the economy.

Be able to:

· determine the phases of the business cycle on the basis of hypothetical data on the dynamics of the main macroeconomic indicators (employment, price levels and output);

· use the theory of the cycle and economic growth to analyze specific economic situations and predict trends in their development;

Present the results of analytical work in the form of a speech, report, essay.

Own:

Techniques for conducting discussions;

Skills of independent analytical work and productive work in a group.

Research methods used in this topic: analysis and synthesis, induction and deduction, method of scientific abstraction, economic modeling, positive and normative analysis.

Seminar Plan

1. The concept of the economic cycle and its phases.

2. Causes of cyclic fluctuations in the economy.

3. Types of economic cycles.

4. Features of the mechanism and forms of the cycle in modern conditions.

5. State countercyclical regulation.

Literature

· Course of economic theory: textbook - 7th add. and reworked. edition / Ed. M.N. Chepurina, E.A. Kiseleva. - Kirov: ASA, 2013. Ch. 19.

additional literature

1. Abel E., Bernanke B. Macroeconomics. 5th ed. - St. Petersburg: Peter, 2011. Chapter 8.

2. McConnell K.R., Brew S.L. Economics: Principles, problems and politics. In 2 volumes: Per. from English. 11th ed. T.1. - M.: Respublika, 1992. Ch. 10, 19.

3. Macroeconomics. Theory and Russian practice: textbook. - 2nd ed., revised. And extra. / ed. A.G. Gryaznova and N.N. Duma. – M.: KNORUS. 2005. Topic 3.

4. Matveeva, T. Yu. Introduction to macroeconomics [Text]: textbook / T. Yu. Matveeva; State. University - Higher School of Economics, - 6th ed., Rev. – M.: Ed. HSE House, 2008.

5. Topic 4, 5, 6.

6. Sloman J. Fundamentals of Economics: textbook. / per. from English. E. A. Nielsen, I.B. Rubert. - M .: Publishing House Prospekt, 2005. Ch.10.

Approximate topics of abstracts and messages

1. Features of agrarian crises.

2. Features of crises of the 21st century.

3. Features of modern economic crises in Russia.

4. "Large cycles of conjuncture" N.D. Kondratiev.

5. Experience and problems of anti-crisis state regulation in industrialized countries.

Do it yourself

Exercise 1. Comment: “In the modern world, economic cycles are viewed in much the same way as the ancient Egyptians looked at the floods of the Nile. This phenomenon is repeated at certain intervals, is of the utmost importance for everyone, and its real causes are hidden from everyone. (J.K. Clark)

Task 2. Select statistical material that allows you to determine the phase of the economic cycle in Russia (USA, France, Japan and other countries of your choice).

Test yourself

1. Why is it necessary to study the cyclical development of a market economy?

2. What is the "business cycle" and what phases does it go through?

3. Describe the four-phase model of the business cycle and the key features of its phases.

4. Describe the features of the two-phase business cycle model.

5. What are the main types of cycles? What is the basis of the characteristics?

6. What are the causes of the medium-term cycle?

7. Is there an overaccumulation of capital (Excess capital) in the conditions of a modern market economy?

8. What is the basis of the long-term cycle? What are its features?

9. Name the deepest and longest economic crises

10. Explain the relationship between economic fluctuations and scientific and technological progress.

11. Substantiate the theories of the cycle, in which the cyclicity is due to the action of scientific and technical factors.

12. Describe the monetary cycle theories.

13. What is the meaning of the theory of "long waves" N.D. Kondratieff?

14. Why are investment fluctuations a decisive factor in long waves?

15. What are the psychological reasons for the cyclical nature of the economy?

16. What is the reason for the presence of such a significant number of theories explaining the cyclical nature of development?

17. Why can the action of the multiplier-accelerator cause the development cycle?

18. Why are economic cycles also called business cycles?

19. Are seasonal fluctuations in economic activity business cycles?

20. Why do seasonal fluctuations and long-term trends make it difficult to assess the business cycle?

21. Is it possible to achieve a smooth, non-cyclical nature of economic development?

22. What are the socio-economic consequences of the cyclical development of the economy?

23. What are the goals of the state counter-cyclical policy?

24. Why were there no economic cycles in the planned economy of the former Soviet Union?

25. Why did the decline in production occur in the Soviet economy?

26. Is it right to consider the economic crisis of the 1990s in Russia as a cyclical crisis?

27. Explain the modification of cyclical development in the second half of the twentieth century.

28. Is the expression true: “Changes in output and employment are not necessarily caused by cyclical fluctuations in economic development”?

business cycle (business cycle) is the time interval between two identical states of the economic situation. In the upswing phase, investments, aggregate incomes, aggregate demand and aggregate supply, and employment grow. The growth rates of these indicators, approaching the peak phase, slow down. Here, the highest employment in this cycle, the level of total income, demand, and investment are achieved. As employment increases, the general price level (inflation) also rises. Rising prices outstrip wage growth, which reduces the demand for durable goods. The economy begins to move from full employment to part-time (decline phase). Moreover, at first, the level of aggregate demand may remain unchanged. This is explained by some inertia of aggregate demand, the habit of the population to the achieved level of current consumption. At the same time, aggregate supply begins to decline. When the indicated downward trend becomes stable, the population begins to adapt to new conditions: aggregate demand begins to decline faster than aggregate supply, which accelerates the recession and the economy approaches the bottom point. A fall in aggregate demand causes a fall in the general price level. A phase of depression begins, characterized by zero rates of economic decline, low levels of employment, aggregate demand, aggregate supply, and investment. During this period, the economy is cleared of inefficient decisions, inefficient entrepreneurs, and competition intensifies. In an effort to reduce costs, firms begin to upgrade equipment, which causes a revival of the economy, turning into a boom.

The nature of each particular business cycle also depends on the interaction with other types of cycles, since cycles of shorter duration are carried out against the backdrop of longer cycles. So, Kondratiev cycles determine the type of curve that demonstrates the business cycle. On the upward wave of the Kondratiev cycle, when the national economy is transitioning to its new technological base, the upswings are very intense and prolonged, while the downturns are less noticeable. This is explained by the fact that each new rise in the business cycle is initiated by the development of a new technological base of the national economy. The downward wave of the Kondratiev cycle is characterized by long and deep downturns in the business cycle, a reduction in its duration. Examples are the Great Depression (the crisis of 1929-1933) and the crises of 1969-70, 1974-75, 1980-82, which occurred on the downward wave of the fourth Kondratiev cycle. The reasons for this are the gradual exhaustion of the potential of the already established technological base of the economy, as well as monetary dynamics.

Among economists, there is still no consensus on the reasons for the cyclical nature of the economy. First of all, the approaches to the problem themselves differ. So, D. Ricardo and J. B. Say (late 18th - early 19th centuries), convinced of the ability of a market economy to self-regulate, denied the very possibility of nationwide economic crises. Others recognize the possibility of cyclicity, but see the sources of its causes in different ways. Some economists proceed from the fact that the cyclical nature of the economy is generated by causes external to the economy, such as fluctuations in solar activity (S. and E. Jevons), cyclical weather fluctuations (S. Moore), changes in psychology (V. Pareto, A. Pigou), wars and the activation of the state (R. Frisch and others), cyclicality in the development of scientific and technological progress (J. Schumpeter, J. Hicks). Thus, in the Hicks-Hansen model, cyclical fluctuations are explained by the interaction of commodity and money markets, when, for example, autonomous investments arise in the economy under the influence of scientific and technological progress. To stimulate the mass development of advanced technologies, the state usually helps to improve the investment climate. Then potential investors, optimistically evaluating economic prospects and focusing on the existing interest rate, increase the size of investments, using savings stocks for this. As a result, there will be an expansion of production volumes, followed by an increase in total income. The economy is on the rise. All this will have an impact on the money market. If the money supply does not change (the state does not issue money), and part of the increase in total income turns into additional demand for money (for credit), then the interest rate will increase. An increase in the interest rate will have a negative impact on the commodity market. Assessing the future rate of return in the face of rising credit prices, manufacturers will start curtailing investment demand. As a result, the growth of investment, production, total income, and hence savings slows down.

Basics of economic theory. Lecture course. Edited by Baskin A.S., Botkin O.I., Ishmanova M.S. Izhevsk: Publishing House "Udmurt University", 2000.

Each historical stage was characterized by a series of periodically recurring ups and downs in the social production process, acting as some kind of oscillatory-wave process.

In the early stages of the development of society, when the basis of social production was the creation of agricultural products, periodic fluctuations were largely associated with the dynamics of weather and climate conditions: cold, frost, rain, drought and other natural disasters. Later, during the period of rapid development of industrial production, periodic fluctuations in ups and downs in the production process became characteristic of industry as well. Moreover, they naturally repeated at strictly defined intervals.

The analysis of the periodicity of fluctuations is carried out according to the sequence of repetition of recessions in the production of material and spiritual values, which are referred to in the economic literature as economic crises.

In society, economic crises manifested themselves for the most part as crises of overproduction of material and spiritual goods in the form of commodity values, in the form of overproduction of goods. The overproduction of goods was relative. It was more about the fact that the population was unable to buy the amount of goods produced, that is, there was a discrepancy between the totality of values ​​in monetary terms produced by society and the availability of funds from the population of one side or another. The production process had to be interrupted. This break in the production process manifested itself as an economic crisis. Economic crises were repeated with a strictly defined frequency. This kind of production process has been defined as a cyclic process.

Under cycle usually understand the repetitive movement of the production process from one economic crisis to the beginning of another.

A cycle is a time period of economic development, located between two successive upper turning points.

In the course of the study, it was found that there are a great many cycles covering a particular set of economic phenomena and they differ in length of time. The cycles were systematized and given the names of researchers:

• - Kitchin cycle - 3-4 years;
• - Juglar cycle 6-8 years;
• - Labrus cycle - 10-12 years;
• - Kuznets cycle - about 2 decades;
• - Kondratiev cycle - 47 and 60 years.

Researchers today are successfully studying the cycles characteristic of social production that exceed a period of 100 years.

If earlier the cycles of social production were associated to a large extent only with the production and economic activities of people, then recently an increasing number of researchers have come to the conclusion that large cycles of the functioning of social development should also be associated with still unknown cosmic phenomena. Cycles are a manifestation of the close relationship between the developing nature and the production and economic activities of society.

Reliable knowledge of the cycles of social production allows society to develop a system of measures to mitigate the harmful effects of a wave-like oscillatory process.

economic cycle called the time interval between two identical states of the economy (economic situation).

General ideas about cyclical fluctuations (primarily in trade) developed at the beginning of the 19th century. and are associated with the names of Ricardo, Say, Sismondi and Malthus. The merit of these economists lies in the fact that they tried to find an explanation for the crises that the trade of that time regularly encountered. The analysis of the issue was based on the thesis that accumulation ensures demand. Crises arise from insufficient consumption, which creates a surplus of generated income. The lack of consumption was due to the plight of the working masses. These scientists were not able to create a general theory of economic cycles, but this was also impossible due to the underdevelopment of market mechanisms at the beginning of the 19th century.

In the middle of the XIX century. the theme of trade crises was developed in the works of K. Juglar and K. Marx.

It is generally accepted that the term "cycle" was first used by K. Juglar. Studying the dynamics of periodic fluctuations in trade, he determined the length of economic cycles at 7-11 years (these cycles are called Juglar cycles); he also divided the cycle into three periods - prosperity, crisis and liquidation, substantiating the cyclicality in the economy by money circulation and bank loans.

A serious contribution to the theory of economic cycles was made by K. Marx. One of his main theses is that the capitalist economy is unable to achieve equilibrium due to the fact that powerful forces are inherent in it, causing economic crises.

K. Marx considers the causes of crises in two aspects. The first stems from his theory of under-accumulation based on cyclical fluctuations in the rate of profit. Every capitalist is interested in the improvement of the means of production, since this allows him to increase profits. The conditions of competition make capitalists invest more and more money in the technical equipment of production, but the introduction of new technology is connected with the release of workers from production processes. Since the basis of the formation of profit, as K. Marx showed, is hired labor, a reduction in the number of workers causes a decrease in the rate of profit. The economy comes to balance through the crisis. As a result of the latter, capital investment in production is sharply reduced, the need for hired workers increases again, and this leads to an increase in the rate of profit and the introduction of the economy into a new development cycle.

The second aspect of the emergence of crises stems from Marx's theory of underconsumption. Overproduction crises are related to the fact that the transition from simple to expanded production does not generate a proportional increase in demand. Overstocking occurs, resulting in a decrease in product prices. Production costs exceed reduced prices, which forces the capitalists to destroy significant volumes of manufactured products and, thus, localize the crisis.

K. Marx considered overcoming crises through the replacement of manual labor with machine labor, therefore his conclusion that the basis of the economic cycle is the regular mass renewal of fixed capital is the focus of a number of modern concepts of economic cycles.

A. Marshall, studying the problems associated with trade crises, explained them by monetary relations in society. However, the great merit of A. Marshall is to consider the equilibrium state of supply and demand. When supply and demand are in equilibrium, the scientist calls the quantity of a good produced per unit of time the equilibrium quantity, and the price at which it is sold, the equilibrium price. A. Marshall believes that a characteristic feature of stable equilibria is that in them the demand price exceeds the supply price by an amount slightly less than the equilibrium quantity, and vice versa. When the demand price is higher than the supply price, the quantity produced tends to increase. That is why when the demand price exceeds the supply price by a quantity only slightly less than the equilibrium quantity, then with a temporary reduction in the scale of production somewhat below the equilibrium quantity of production, there will be a tendency to return to its equilibrium level, and as a result, the equilibrium remains stable against deviations in this direction. . If the demand price is higher than the supply price by a quantity of a good that is slightly less than the equilibrium quantity, then it will certainly be lower than the supply price by a slightly larger quantity of a good. That is why, if the volume of production slightly exceeds its equilibrium state, it will tend to return to its previous position, the equilibrium will be stable against deviations in this direction as well.

A. Marshall strengthened the influence of the time factor on ongoing processes in economic analysis. His task was to bring the general theory of supply and demand to different periods. Thus, the concepts of "short-term" and "long-term" periods were introduced into the analysis, which played an important role in the study of economic dynamics.

Fluctuations in supply and demand in market conditions were at the center of the work of the prominent Russian scientist M. Tugan-Baranovsky, who argued that the sharpest fluctuations are found in industries that produce elements of fixed capital. These fluctuations are reflected in the general rise and fall of economic activity, covering the entire industry. The reason for this is the interdependence of various industries throughout the economy.

The production of elements of fixed capital, M. Tugan-Baranovsky points out, creates demand for other goods. In order to create new enterprises, it is necessary to produce the primary materials that ensure production, namely consumer goods for workers. The expansion of production in one area increases the demand for the products of other industries. That is why, during a period of rapid growth in the accumulation of fixed capital, there is a general increase in the demand for goods. However, this is followed by saturation, overproduction of the means of production. Due to the dependence of all branches of industry on each other, this partial overproduction, connected with the instruments of production, results in a general overproduction, and prices fall. There comes a period of general economic decline, which leads to a reduction in the number of enterprises. This circumstance, points out M. Tugan-Baranovsky, inevitably causes a violation of proportionality in the sphere of distribution of production forces. The equilibrium between aggregate demand and aggregate supply is broken. Since new firms create an expanded demand not only for capital goods but also for consumer goods, it follows that, as the number of new firms decreases, industries supplying consumer goods also experience a reduction in demand no less than those supplying funds. production. Overproduction becomes general. Thus, the crisis is caused by disproportions in the development of industries. Some of them grow at a faster rate, so that during the cyclical phase of expansion the proportionality of production is disturbed, and the new equilibrium can only be restored by destroying part of the capital of those branches of industry that have overextended themselves.

Of course, these views pay tribute to the works of K. Marx, but M. Tugan-Baranovsky had his own approach to explaining the disequilibrium of a market economy.

M. Tugan-Baranovsky connects the development of the disproportionality of industries with the conditions for the placement of free (loan) capital. The demand for capital rises sharply during the period of prosperity of industry, which ensures the investment of loan capital in production and its transformation into fixed capital. During a crisis, the demand for loan capital falls and it begins to accumulate until the next rise.

So, according to M. Tugan-Baranovsky, the basis of prosperity is investments.

Thus, under the economic cycle is meant the period of economic development between two identical states of the conjuncture. The foundations of the theory of cyclical fluctuations originated at the end of the industrial revolution. The original form of this theory is the concept of crises. The most noticeable stimulus for the development of these studies was the global economic crisis at the beginning of the 20th century. Systematized collection, generalization of empirical and statistical material made it possible to gradually give many concepts the form of theoretical models.

2.2 Types of cycles. The economic cycle and its phases. Cycle phase functions

To date, economic science distinguishes several types of cycles. The most elementary of them - annual, which are associated with seasonal fluctuations under the influence of changes in natural and climatic conditions and the time factor.

short cycles, the duration of which is estimated to be 40 months, i.e. a little more than 3 years, due to alleged fluctuations in world gold reserves. This conclusion was made in relation to the conditions of the domination of the gold standard.

Medium-term, or industrial cycles, as shown by more than 150 years of world practice, they can have a duration of 7-12 years, although their classical type covers approximately a 10-year period. This type of cyclic development is a further object of our analysis. It is associated with a multifactorial model of disruption and restoration of economic balance, proportionality and balance of the national economy.

Building cycles cover a 15-20-year period and are determined by the duration of the renewal of fixed capital. In this regard, we can say that these cycles tend to decrease under the influence of scientific and technical progress factors that cause obsolescence of equipment and the policy of accelerated depreciation.

Big cycles have a duration of approximately 50-60 years; they are caused mainly by the dynamics of scientific and technical progress.

Business cycle- periodic fluctuations in the levels of employment, production and inflation.

The reasons for cyclicity are: periodic depletion of autonomous investments, weakening of the multiplier effect, fluctuations in the volume of money supply, renewal of basic capital goods, etc.

The economic cycle can be represented in the form of a wave graph that characterizes the process of the dynamics of the production of the gross national product during a certain period.

The system of ideas assumes that a wave oscillatory process takes place in the presence of a trend towards a progressive process of growth in the gross national product and other economic indicators of social production. The economic cycle can be represented in the form of a wave graph that characterizes the process of the dynamics of the production of the gross national product during a certain period.

The system of representations assumes that a wave oscillatory process takes place in the presence of a tendency for a progressive process of growth in the gross national product and other economic indicators of social production.

Let us consider the phases of the wave-like oscillatory process.

Conventionally, the period between peaks of recovery (recession) of a developing economy is divided into four phases (Fig. 2.1.):

Rice. 2.1

Crisis phase (recession) is considered from the moment of the suspension of the rise in the development of the economy and the beginning of the decline in the production of material and spiritual values ​​until the moment of the suspension of the recession. This period is characterized by the excess of production of goods in comparison with the growth of effective demand of the population, which leads to a decrease in the sale of goods - overstocking of firms and corporations. As a way out, firms are trying to reduce the prices of goods, which of course does not solve the problem. Therefore, entrepreneurs reduce the volume of production and, as a result, lay off excess workers. Unemployment is on the rise in the country. In addition, entrepreneurs are not always able to make payments for the supply of raw materials, materials, energy, payments on loans. As a result, the banking system is in crisis. Banks are going bankrupt.

The phase of the state of depression - there is a halt in the decline in the production of goods and a slight increase in production compared to the crisis period. A surplus of free cash appears, which does not find application in industrial production and is concentrated in banks. During this period, the rate of loan interest is minimal. The surplus of goods is gradually decreasing (some are sold at reduced prices, some are destroyed for various reasons: deterioration, obsolescence, etc.)

Revitalization state phase (expansion) characterized by a significant increase in the production of goods, but within limits not exceeding any significantly higher point reached before the crisis. An important qualitative moment that characterizes this phase is the increase in the production of "traditional goods" by enterprises that survived in economically difficult conditions, updated the means of production and began to increase the pace of production. During this period, they are joined by enterprises that produce new types of goods that have received recognition from consumers.

Rise state phase implies a jump in the level of production compared to the maximum reached in the previous cycle. Unemployment is falling. The demand for money increases, the level of interest on loans rises.

The phase of the state of recovery is characterized by the dominance of enterprises that have updated the range of goods that are in high demand among consumers.

It should be borne in mind that the division of the cycle into four phases is very arbitrary. Various economists offer a different differentiation of phases and their number. So, K. Marx in "Capital" lists the phases of "... average recovery, prosperity, overproduction, crisis and stagnation".

However, the division of the economic cycle into four phases, which at first glance seems arbitrary, in practice has become the only fruitful one in analyzing the features of individual cycles and their phases.

The boundaries separating one phase of the cycle from another are very mobile, it is natural that in one phase of the cycle the conditions for the transition to the next one are prepared. The crisis ripens in the depths of prosperity. A depression is prepared by a crisis. The revival grows within the framework of the depression and only gradually develops into an upswing. The sequence of phases is nothing but the dialectical unity of all moments of the oscillatory wave process of developing social production.

The identification of cycles of various durations with their phases and a description of the phenomena characteristic of these phases shows that people in the course of their life are an integral part of these processes and are not yet able to fully resist this powerful element of undulating fluctuations, incurring large economic losses during the period of objective natural ups and downs of social production.

However, the knowledge and certain experience that people have accumulated in comprehending the cyclical fluctuations of economic development allow society today, represented by the state, to develop a strictly defined system of measures to reduce the negative consequences of economic crises.

Thus, the economic cycle is periodic fluctuations in the economic activity of society, a period of time from the beginning of one crisis to the beginning of another. In the cycle, the economy goes through certain phases (stages), each of which characterizes a specific state of the economic system. These are the phases of crisis, depression, revival and recovery. In the structure of the cycle, the highest and lowest points of activity and the phases of decline and rise lying between them are distinguished. The total cycle duration is measured by the time between two adjacent high or two adjacent low points of activity. Accordingly, the duration of the decline is the time between the highest and subsequent lowest points of activity, and the rise - vice versa.

2.3 Counter-cyclical public policy

The counter-cyclical policy of the state is a set of measures taken by the state in order to smooth out fluctuations in economic activity and aimed at combating both the crisis of the economy and the boom.

Different views on the causes of cyclic fluctuations also determine different approaches to solving the problem of their regulation. Despite the variety of points of view on the problem of countercyclical regulation, they can be reduced to two main approaches: Keynesian and classical. As we know from the theory of economic equilibrium, the supporters of Keynes considered aggregate demand to be the central element of regulation, while the supporters of the classics considered aggregate supply.

Counter-cyclical regulation is in the system of ways and methods of influencing the economic situation and economic activity, aimed at mitigating cyclical fluctuations. At the same time, the efforts of the state have the opposite direction of the emerging economic situation at each phase of the economic cycle.

However, two key points should be emphasized. Despite all efforts, the state cannot overcome the cyclical nature of economic development; it can only smooth out cyclical fluctuations in order to maintain economic stability. Finally, it is necessary to realize and accept cyclicity with its crisis phase as the inevitability of not only destruction, but also creation, because it is associated with the restoration of macroeconomic balance in the renewal of the economic organism of the national economy.

Proponents of Keynesianism, focusing on aggregate demand, focus on the regulatory role of the state with its financial and budgetary instruments, which are used either to reduce or increase spending, or to manipulate tax rates, compress or expand the system of tax incentives. At the same time, monetary policy plays an important, but still auxiliary role.

The state, using the Keynesian model of counter-cyclical regulation, in the phase of crisis and depression increases public spending, including spending on enhancing investment activity, and pursues a policy of "cheap money". In the conditions of recovery, in order to prevent the economy from “overheating” and thereby smooth out the peak of the transition from recovery to recession, the same tools are used, but with the opposite sign, aimed at compressing, curtailing aggregate demand.

Proponents of the classical, or conservative direction, focus on the proposal. It is about ensuring the use of available resources and creating conditions for efficient production, withholding support from low-efficient industries and sectors of the economy and promoting free market forces.

The state influences the economic system in the opposite direction relative to the given phase of the cycle. If production falls, the state pursues a stimulating policy, if the “overheating” of the market is brewing, then the state pursues a restraining policy. Measures of the countercyclical policy of the state are presented in Table 2.1.

Table 2.1. Measures of the countercyclical policy of the state

Monetary regulation becomes the main tool. The money supply becomes the main lever of influence on the national economy, a means of combating inflation. Attention is paid not to credit liberalization, but to credit restriction, i.e. pursuing a policy of "dear money" by raising interest rates, which should help combat the overaccumulation of capital. Fiscal policy is used as an auxiliary tool. A strict policy is being pursued to reduce government spending, and, consequently, to compress, first of all, consumer demand. The tax policy is aimed at reducing tax rates and the degree of progressiveness of the tax scale. Moreover, the priority of such tax measures is addressed to the business sector.

The consequence of the counter-cyclical policy of the state may be the deformation of the cycle: more frequent crises while reducing their duration and the depth of the fall in production; lengthening of the lifting phase; loss or a significant reduction in the duration of the phase of depression; there is a synchronization of the cycle in different countries, which makes it difficult for economies to get out of the crisis by expanding exports.

The transformation of inflation into a chronic phenomenon of the market economy has changed the classical picture of the crisis. In the last 50 years, the decline in production is usually accompanied by an increase in prices, i.e. stagflation is observed.

Along with cyclical crises in modern conditions, a new type of crisis has appeared - a transformational crisis associated with a change, reform of the economic system, the transition from a planned to a market (mixed) economy.

Thus, we draw the following conclusions:

• 1) Progressive economic development is carried out cyclically. The cycle successively passes through the phases of crisis, depression, recovery and recovery. None of the origin theories has the right to be definitive. Modern cycles have a "blurred" picture of the cyclical wave and due to the relative overaccumulation of capital, not goods. In addition, the effect of scientific and technological progress, monopolies and attempts at counter-cyclical state regulation have led to a smoothing of cyclical waves, a decrease in the depth of the crisis phase, and a reduction in depression.
• 2) All countries with a market economy, despite the commitment of their governments to one or another model, concept of development, in their practical activities for state regulation of the national economy, resort to the use of both Keynesian and classical methods of influencing market conditions, economic activity, depending on the decision short term or long term goals.

Classification of cycles in the economy

As the unevenness of economic development intensifies, studies of cyclicality in the economy become more active. As a result, at present, along with business cycles (they are often called classical), a number of other cycles are distinguished, which can be combined with business cycles in one way or another and either strengthen or weaken their effect.

When distinguishing cycles, as a rule, either the driving forces of cycles or the duration of cycles in time, depending on the timing of the restoration of equilibria, are taken as a basis, which are violated by specific factors that give rise to various cycles.

In accordance with these criteria, five main varieties of economic cycles are currently distinguished:

- Kondratiev cycles, or long-wave cycles (duration 48–55 years); the main driving force is radical structural, organizational and technological changes, the economic development of fundamental and significant innovations;

– Kuznets cycles (duration 20 years); driving force - shifts in the reproductive structure of production (these cycles are often called reproductive or construction cycles);

– Jugler (Juglar) cycles – Juglar cycle– (duration 7 – 11 years); driving force - fluctuations in supply and demand for equipment and orders for new construction, the need to re-profiling old enterprises. These cycles are considered the closest to business (classical);

- Kitchin cycles (duration 3 - 5 years); driving force - the dynamics of changes in the amount of reserves in accordance with changes in the levels of production capacity utilization. These cycles are often referred to as inventory cycles;

- private economic cycles (duration from 1 to 12 years); driving forces - fluctuations in investment activity.

The Kondratiev cycles are considered to be decisive in relation to the majority of cycles known in economics.

Russian and Soviet economist N.D. Kondratiev (1892 - 1938) proved that along with the well-known business cycles of a market economy lasting 8 - 10 years, there are large production cycles with an average duration of 48 - 55 years. In these cycles, Kondratiev singled out two phases (or two waves): upward and downward.

In the history of capitalism for 140 years (from the 1780s to the 1920s), Kondratiev studied two and a half large cycles in most detail. The first cycle, according to his calculations, took place from 1787-1792 to 1810-1817 (upward wave) and from 1810-1817 to 1844-1851 (downward wave). The second cycle is from 1844-1851 to 1870-1875 (upward wave) and from 1850-1875 to 1890-1896 (downward wave). In the third cycle, an upward wave was considered - from 1890 - 1896 to 1914 - 1920. According to Kondratiev's calculations, the transition from the downward wave of the fourth cycle to the upward wave of the fifth cycle should have occurred in the early 1990s, and the highest point of the upward wave of the fifth cycle achieved in the first decade of the 21st century.

Based on rich factual material, N.D. Kondratiev also showed that for about two decades before the beginning of the upward phase of the next cycle, there is a revival in the field of technical inventions, and then, during the years of economic growth, their widespread use.

As the practice of the past century has shown, Kondratiev cycles quite reliably predict the development of the world economy.

In recent years, Kondratiev's theory of long waves has been increasingly interpreted by economists as an integral part of the theory of foresight developed by him (but for a long time remaining undeservedly unclaimed). Thus, modern economists only gradually come to know all the richness and diversity of the creative heritage of N.D. Kondratiev.

The Austrian economist J. Schumpeter was also involved in the theory of long waves. In his work "Business Cycles" (1939), he substantiated the concept that the main driving force behind the long-term fluctuations of a market economy is the undulating dynamics of technical and technological innovations. Since Schumpeter took long waves as a basis for his analysis of cyclicity, he, like Kondratiev, is considered one of the founders of the theory of long waves in economics. In addition, Schumpeter is considered the founder of a special scientific direction - the theory of long waves of innovation.

The development of a theory about the types and types of cycles is very important for obtaining objective knowledge about the nature and trends of economic dynamics both at the level of a single country and at the level of the world economy as a whole.

The question of the causes of the phenomenon of cyclicity in the economy is interpreted ambiguously by various economic schools.

Marx, who studied cyclicality in the period of classical capitalism, saw the causes of this phenomenon in the internal nature of capitalism and in the special external forms of manifestation of its main economic contradiction - the contradiction between the social nature of production and the private appropriation of its results.

Labor power under capitalism was considered by Marx as a commodity that is sold and bought by capitalists for the sake of its exploitation, i.e. for its specific ability to create surplus value appropriated by the capitalists. Under the influence of competition, capitalists are forced to replace labor power with machines, and this reduces the rate of profit, i.e. the share of surplus value in the total amount of capital. In order to maintain the rate of profit, the capitalists seek to increase the degree of exploitation of the workers by restraining the growth of wages. On the scale of society, this leads to a lag in consumption (in the form of effective demand) from the possibilities of production. As a result, overproduction crises arise as a result of the population's lack of funds for the purchase of manufactured goods.

Non-Marxist schools have developed a number of different interpretations of the causes of cycles and crises in the economy. Samuelson, for example, notes the following as the most famous theories of cycles and crises: the monetary theory, which explains the cycle by expansion and contraction of bank credit (Hawtrey and others); the theory of innovation, which explains the cycle by using important innovations in production, such as, for example, railways (Schumpeter, Hansen); a psychological theory that interprets the cycle as a consequence of waves of pessimistic and optimistic mood covering the population (Pigou, Bedggot, and others); the theory of underconsumption, which sees the cause of the cycle in too much of the income going to rich and thrifty people compared to what can be invested (Hobson, Foster, Catchings, etc.); the theory of overinvestment, whose supporters believe that the cause of the recession is rather excessive than insufficient investment (Hayek, Mises, etc.); "sunspot-weather-crop theory" (Jevons, Moore, and others).

In recent decades, the explanations of cycles by the action of the multiplication-acceleration mechanism, as well as the so-called pro-cyclical policy of the state, have been the most popular.

The concept of a multiplier was first formulated by the English economist R. Kahn during the global economic crisis of 1929-1933. Kahn called the multiplier the coefficient that determines the increase in employment for each unit of government spending directed to public works. This idea of ​​Kahn about the employment multiplier was developed by Keynes and used when considering the role of investment in the economy. At the same time, Keynes singled out autonomous investments I a, the volume changes of which do not depend on changes in the level of income, but are determined by certain factors external to the economy, for example, the uneven development of scientific and technological progress, and derivative investments I in, the volumes of which are directly determined by fluctuations in the levels of economic activity .

Keynes proved that there is a stable relationship between changes in autonomous investment and national income, namely, changes in the volume of these investments cause greater changes in the volume of national income than changes in the volume of investment themselves.

As is known, one of the expressions of the equilibrium situation in the economy is the equality

where Y is income; C - consumption; I - investment.

This equality can be represented as

Y \u003d C Y Y + I a,

where C Y is the marginal propensity to consume; I a are autonomous investments.

In this case, autonomous investment will be defined as the difference between total income and its consumed part:

I a \u003d Y - C Y Y, or I a \u003d Y (1 - C Y).

From here, the income will be determined by the formula

Y = I a / (1 - C Y).

If we express this equation in incremental quantities, then it will take the following form:

DY = DI a 1 / (1 - C Y).

In this formula, 1 / (1 - C Y) and will be the income multiplier K, i.e. a coefficient that shows how much the national income will increase with an increase in autonomous investment by DI a . (Similarly, in the case of a reduction in investment, the multiplier will show how much income will decrease compared to investment.)

Since C Y = 1 - S Y , where S Y is the marginal propensity to save, the multiplier under consideration can also be expressed as 1 / S Y .

The multiplier coefficient, as can be seen from the formula, directly depends on C Y , i.e. the propensity of the population to consume. The greater this propensity, the greater the multiplier, and vice versa. For example, if the propensity to consume turns out to be equal to 1/2, then the national income multiplier will be equal to 2, and if the population consumes 3/4 of the national income, then the multiplier will double. Accordingly, with the same volume of investment increment, the economy may have different increments of national income due to differences in the population's propensity to consume and multiplier coefficients. For example, an investment increment of 400 billion rubles. with a multiplier equal to 2, it will give an increase in national income in the amount of only 800 billion rubles, and with K = 4 - in the amount of 1600 billion rubles.

Keynes explained the multiple increase in income due to the increase in investment by the emergence, after the primary increase in income generated by the initial investment, of secondary, tertiary and subsequent increases in income from various individuals. For example, in connection with the investment of additional funds in construction, the income of construction workers increases. Part of these incomes these workers (depending on their propensity to consume) will spend on the purchase of some consumer goods and thereby increase (by the amount of the value of these goods) the income of the sellers of the respective stores. In accordance with their propensity to consume, these sellers will also partly spend their additional income on the purchase of various goods, thereby giving an increase in income to the sellers of these goods. Income increment will go in an infinitely decreasing geometric progression, because. each time not all income is spent, but only a part of it, determined by the propensity to consume. The multiplier effect drops to zero when the ratio of the increase in total spending to the initial amount of additional investment becomes equal to the multiplier.

By itself, the multiplier effect in the economy, disclosed by Keynes, is not considered decisive in the formation of the cycle. However, this effect becomes very important when it interacts with the accelerator effect.

In contrast to the multiplier, the effect of the accelerator is no longer associated with autonomous, but with derivative investments, i.e. with those that depend on changes in the level of income.

The principle of the accelerator is that an increase in income causes an increase in investment in proportion to an increase in income (respectively, a decrease in investment generates a backlash). The general formula for the accelerator V is as follows:

V = DI / (Y t - Y t - 1),

where DI is the increase in investments; (Y t - Y t - 1) - income growth for the period under review.

In accordance with this formula, the increase in investment can be represented as follows:

DI \u003d V (Y t - Y t - 1).

The meaning of the accelerator is that the increase in investment can be more dramatic than the increase in income that caused it.

The reason for the sharper fluctuations in investment compared to income (or, in other words, investment demand compared to consumer demand) is usually considered to be the need to spend part of the investment to compensate for the depreciation of fixed capital. Due to this circumstance, an increase in demand for finished products, for example, by 10% can cause an increase in gross investment in a double percentage.

Although the multiplier and accelerator models are considered separately, it is believed that their mechanisms operate in close connection with each other. As soon as one of these mechanisms comes into action, the second begins to function. If, for example, an autonomous change in investment occurs in the equilibrium position, then a multiplier sets in motion, which causes a number of changes in income. But changes in income set the accelerator in motion and generate changes in derivative investment. Changes in derivative investments again set in motion the multiplier mechanism, which generates changes in income, and so on.

The described scheme of interaction between the multiplier and the accelerator constitutes the acceleration-multiplication mechanism of the cycle.

The general model of interaction between the multiplier and the accelerator is characterized by the following J.R. Hicks:

Y t \u003d (1 - S) Y t - 1 + V (Y t - 1 - Y t - 2) + A t,

where Y t is the national income; S is the share of savings in the national income; (1 - S) - the share of consumption in it (or the propensity to consume); V is the accelerator coefficient; A t is autonomous demand.

When using the multiplication-acceleration mechanism of the cycle, the initial factor in the cycle is considered to be various external impulses that activate this mechanism. At the same time, peculiar barriers (limits) in the economy are distinguished, which are objective obstacles in increasing (reducing) certain economic values. For example, the level of employment objectively acts as a kind of physical barrier beyond which the growth of real income cannot "step over". When hitting the full-employment ceiling, real income growth stops even as demand continues to rise. But if real income cannot increase, then derivative investments are reduced to zero, because their level does not depend on the volume of income, but on its growth. Hence, a fall in total demand and income is inevitable, which causes a cumulative fall in the economy as a whole.

The cumulative process of falling, according to this point of view, cannot continue indefinitely either. The barrier for him is the amount of depreciated capital, i.e. the amount of negative investment, which cannot exceed the value of this capital. As soon as negative net investment in the process of falling reaches a given, limiting value for them, their volume no longer changes, and as a result, the decline in income begins to slow down. But if the negative value of income slows down, then negative net investment decreases, which leads to an increase in income. An increase in income, in turn, will lead to an increase in derivative investment and, consequently, to an overall increase in demand and income.

The state can act as a generator of the business cycle. The study of the role of the state in identifying the causes of crises and cycles at the present stage is primarily associated with the theories of the equilibrium business cycle and the political business cycle.

The theory of an equilibrium business cycle is associated primarily with the ideas of monetarists. According to these ideas, the states in many Western countries in the post-war period act as a kind of generators of monetary "shocks" that bring the economic system out of equilibrium, and thus support cyclical fluctuations in the economy. If the government, pursuing an expansionary policy, increases the growth rate of the amount of money in circulation, then after some (several months) delay, the growth rate of nominal GNP begins to accelerate, approximately corresponding to the growth of the money supply. At the same time, at first, almost the entire acceleration in the growth of nominal GNP will be an increase in real output, accompanied by a decrease in unemployment. As the expansion phase continues, an increase in GNP will simply mean an increase in the absolute price level. If the growth rate of the money supply in circulation slows down, then the corresponding reactions of nominal and real GNP, as well as the absolute price level, change places. M. Friedman and A. Schwartz proved the possibility of the influence of money on the development of the business cycle on the example of studying the dynamics of money circulation in the United States for the period 1867 - 1960.

In the 1970s - 1980s. the point of view that the state itself is often a generator of cyclical phenomena in the economy, began to be actively developed by representatives of such a direction as the theory of rational expectations.

Economists adhering to this direction believe that, thanks to the ongoing information revolution, entrepreneurs and the population have learned to evaluate and recognize the true motives of certain economic decisions of state bodies so much that they can respond to state decisions in a timely manner in accordance with their own benefit. As a result, public policy goals may remain unfulfilled, but the economic recession or recovery caused by certain government actions becomes more pronounced, so that even small (initially) fluctuations in the level of economic activity can turn into cyclical ones. Suppose the economy is on a downward trend. The state, seeking to overcome it, lowers the tax on capital investments, namely, it provides, for example, entrepreneurs with a discount that allows them not to pay tax on 10% of their investment expenses. Such a measure will certainly lead to an increase in investment spending, which will stimulate demand and thus prevent a recession in the economy. Such a chain of developments will serve as evidence to the authorities that fiscal policy is a good tool for smoothing out cyclicality. But if, at the next recession, at least some of the entrepreneurs decide that they should not rush to invest until the state lowers the tax, then the result will be a temporary delay in investment.

Postponing investment will first lead to an increase in the already emerging recession, and then, when the state does reduce the tax, to a stronger-than-usual flow of investment. As a result, the state, with its counter-cyclical policy, will intensify both the phase of recession and the phase of growth in the economy, i.e. exacerbate rather than mitigate cyclical fluctuations.

The theory of the political business cycle is based on the following assumptions. First, it is assumed that the relationship between unemployment and inflation is determined by the type of Phillips curve, i.e. there is an inverse relationship between these values: the lower unemployment, the faster prices rise (it is assumed that price changes depend not only on the current level of employment, but also on past values, i.e. that inflation has a certain inertia). Secondly, the premise is accepted that the economic situation within the country significantly affects the popularity of the ruling party. As the main economic indicators to which the population reacts, the inflation rate and the unemployment rate are singled out, and it is believed that the lower their level, the more votes will be given in the upcoming elections for the ruling party (or president), all other things being equal. Thirdly, the main goal of the domestic economic policy of the ruling party is to ensure victory in the next parliamentary (presidential) elections.

Based on these three premises, the general scheme of the political business cycle is characterized. Its meaning is as follows. The government, seeking to ensure the victory of its party in the elections, takes measures to create and maintain such a combination of inflation and unemployment that seems most acceptable to voters. To this end, the administration, immediately after coming to power, makes efforts to reduce the rate of price growth by artificially provoking crisis phenomena, and by the end of the period of its rule, it begins to solve an opposite task in meaning, i.e. is doing everything possible to "warm up" the economy and raise the level of employment. Employment growth, of course, can cause prices to rise. But the calculation is done on the inertia of their movement. By the time of the elections, the employment rate rises, which causes approval among voters, and inflation (the inevitable subsequent negative factor) has not yet had time to gain full strength. As a result, if executed correctly, such a policy can help to attract additional votes and electoral success.

Theory of the real economic cycle. Although many Western economic schools, in accordance with the traditions of Keynesianism, associate the causes of business cycles with changes in aggregate demand, a number of neoclassical economists in recent years have substantiated the thesis about the decisive role of supply in the formation of cycles.

From these positions, the main reasons for the emergence of the economic cycle are changes in technology, availability of resources, levels of labor productivity, i.e. those factors that determine the possibilities of aggregate supply.

According to the position of supporters of this theory, the economic cycle may arise, for example, in connection with an increase in world oil prices. Rising oil prices may make some types of equipment too expensive to use, resulting in lower output per worker, i.e. to a decrease in labor productivity. A decrease in productivity means that the economy creates a smaller real product, i.e. the aggregate supply decreases. But if the volume of aggregate supply is reduced, then, consequently, the need for the amount of money also decreases (since a smaller mass of goods and services is serviced), and hence the amount of money borrowed by entrepreneurs from banks decreases. All this will lead to a reduction in the money supply, which will cause a decrease in aggregate demand, and to the same extent as the aggregate supply initially decreased. As a result, there will be a decrease in the total volume of real equilibrium production at a constant price level (i.e., a situation similar to the Keynesian model, which assumes the possibility of a reduction in real output at a constant price level), will develop.