Business cycle
Reasons for the cyclical development of the economy separate theories are explained in different ways. External theories explain the economic cycle by external causes, the appearance of spots on the Sun, which lead to crop failure and a general economic decline (W. Jevons, V. Vernadsky); wars, revolutions and other political upheavals; the development of new territories and the migration of the population associated with this, fluctuations in the population of the globe; powerful breakthroughs in technology.
allowing to radically change the structure of social production. Internal theories consider the economic cycle as a product of internal causes: the ratio of optimism and pessimism in economic activity people (V. Pareto, A. Pigou); excess savings and lack of investment (J. Keynes); the contradiction between the social nature of production and private appropriation (K. Marx); violation in the field of money supply and demand (I. Fisher, R. Houtrn); overaccumulation of capital (M. Tugan-Baranovsky, G. Kassel, A. Spiethof); underconsumption and poverty of the population (T. Malthus), etc. Such an abundance of views is explained by the complexity and importance of this economic process.
Unemployment - it is involuntary unemployment arising as a result of a permanent imbalance between the demand and supply of labor both in the integrated labor market and in its various segments.
The term "unemployment" first appeared in the Encyclopædia Britannica in 1911, then used in 1915 in a US Department of Labor report. Currently, unemployment is present in all countries of the world in various volumes, forms, duration.
AT economic theory There are different approaches to explaining the necessity and possibility of unemployment.
One of the earliest explanations of unemployment is given by T. Malthes. He noted that unemployment is caused by demographic reasons, as a result of which the growth rate of population exceeded the growth rate of production. This theory is criticized and presented as untenable, because it does not explain the emergence of unemployment in highly developed countries with low birth rates.
Marxist theory regards unemployment as a historically transient phenomenon characteristic of a society based on private ownership of the means of production. The emergence of unemployment is associated with cyclical processes of capital accumulation and reproduction, with the growth of the organic composition of capital. The population of the hut is definitely not absolute, but relative to the need for capital. The consequences of unemployment are the absolute and relative impoverishment of employees.
The neoclassical school is represented by the works of D. Gilder, A. Laffer, M. Feldstein, R. Hall and others. The provisions of the classical theory of A. Smith are taken as the basis. It follows from the neoclassical concept that unemployment is impossible if there is an equilibrium in the labor market, because the price of labor flexibly responds to the needs of the labor market, increasing or decreasing depending on supply and demand. At present, representatives of this school recognize unemployment as a natural phenomenon that performs the function of a circulation of the unemployed part of the able-bodied population.
The main ideas of the Keynesian school can be briefly reduced to the following:
At a given level of investment and money wages, the economic system in any short run can be in a state of stable equilibrium with underemployment, which means the possibility of existence involuntary unemployment;
The main parameters of employment (the actual level of employment and unemployment, the demand for labor and the level of real wages) are not set in the labor market, but are determined by the amount of effective demand in the market for goods and services;
The mechanism of employment formation is based on psychological phenomena: the propensity to consume, to save, incentives to invest, liquidity preferences;
The main, decisive factor in the formation of employment is investment of optimal size. All means are good along this path, but the organization of various public works, up to the construction of pyramids, palaces, temples, and even digging and digging ditches, is especially effective from the point of view of expanding employment;
There should be a flexible wage policy. Representatives of the monetarist school explored the relationship
unemployment with the dynamics of real wages, inflation.
The institutional sociological school offered its vision of the problem from the standpoint of institutional problems, the creation of employment services and other social institutions.
AT last years the most popular are the concepts of "natural", "normal", "socially acceptable" level of unemployment, exploring the relationship between unemployment and inflation, money circulation, the equilibrium price of labor, the ratio of supply and demand for labor. The development of strategies and tactics of state regulation of employment, support for the unemployed is carried out using the methods of economic and mathematical modeling and graphical analysis (Marshall's crosses, Phillips curves, Beveridge curve, etc.). In the 60s, the natural rate of unemployment was considered to be 2-4% of the labor force, in the 80s this level increased to 6-7%.
The unemployed are able-bodied citizens who do not have work and earnings, are registered with the employment service in order to find work, are looking for work and are ready to start it. Modern forms of unemployment are as follows. frictional unemployment associated with professional, age, regional movements of workers. These are employees who, having left their previous place of work, are in the process of moving to a new place. A distinctive feature of this type of unemployment is voluntariness and low duration.
Structural unemployment is the result of changes in technology, technology and the structure of production, the structure of consumer demand, causing a discrepancy between the structure of jobs and the professional structure of workers. This type of unemployment, as a rule, is of a long-term nature, requires additional costs for society and individuals for retraining, changing their place of residence.
cyclic unemployment is due to the cyclical nature of the reproduction process in market economy. It increases during a crisis and decreases during an economic recovery. Unemployment especially increases during the period of transition to new technological methods of production on the basis of all-encompassing revolutionary shifts in engineering, technology, and the organization of production.
Seasonal unemployment is due to seasonal fluctuations in the volume of production of certain industries: agriculture, construction, crafts, in which sharp changes in the demand for labor occur during the year. The size of seasonal unemployment can be predicted and taken into account when signing contracts between the employer and the employee.
Regional unemployment arises as a result of disproportions between the demand and supply of labor in a given territory; It is formed under the influence of uneven economic development of territories, is influenced by demographic, historical, cultural and other specific factors.
To the duration of unemployment can be distinguished stagnant and fluid forms. Duration of unemployment is measured by the time interval between job loss and employment W
new workplace.
The current form of unemployment is characterized by the dismissal of Inca jobs from enterprises at their own request and the initiative of the administration. The reasons for layoffs are very diverse, they are both objective and subjective.
Voluntary unemployment is due to the fact that a certain number of workers enter the labor market and become voluntary unemployed for one reason or another (in order to find a more the best conditions labor and wages, etc.).
Unemployment can be open and hidden, long-term and short-term. Long-term unemployment includes cyclical and structural unemployment, while short-term unemployment includes seasonal and frictional unemployment. There are repeated (periodic) and "stagnant" unemployment in the country's economy, taking into account people who are desperate to find work and who have finally left the labor force.
The socio-economic consequences of unemployment can be formulated as follows: there is a depreciation, underutilization of the human potential of society, the quality of life of the unemployed and their families is deteriorating, pressure on the wages of those employed by those competing in the labor market is increasing, the costs of society and the individual to restore or change professional status and level of productive labor, categories of persons with devinant behavior are formed, prone to actions that contradict accepted social norms and values.
Among the factors influencing the dynamics of unemployment, the following are fundamental:
1. Demographic factors - a change in the share of the economically active population as a result of shifts in the birth rate, mortality, sex and age structure of the population, average life expectancy, in the directions and volumes of migration flows.
2. Technical and economic factors - the pace and direction of scientific and technical progress, causing labor savings. The destruction of knowledge-intensive Russian productions, carrying out the conversion without taking into account the economic and social consequences at all levels created the threat of mass bankruptcy of enterprises and an avalanche-like release of labor.
3. Economic factors - the state of national production, investment activity, financial and credit system, the level of yen and inflation. According to the law formulated by A. Oken, there is a negative relationship between the unemployment rate and the volume of GNP P, each "burst" of unemployment is associated with a decrease in the real volume of GNP.
Unemployment rate UL,%, is determined by the formula:
where is the number of unemployed, N- number of labor force.
In world practice, to calculate the economic losses from unemployment P and used Okun's law:
P i \u003d GNP P - GNP f,
where GNP P, GNP f- potential and actual gross national product, respectively.
According to Okun's law, an increase in the actual level of unemployment above its natural level by 1% means that the actual GNP lags behind the potential one by 2.5%; 2.5 - Okun's ratio:
where is the actual UL- natural rate of unemployment.* The difference between the actual and natural rate of unemployment characterizes the level of conjunctural unemployment.
There is a relationship between unemployment and inflation, first recorded in the 50s by A. Phillips in the form of a curve.
The Phillips curve characterizes the inverse relationship between inflation rates and the unemployment rate: the higher the inflation rate, the lower the unemployment rate. Government intervention can reduce unemployment by expanding aggregate demand. The resulting tension in the labor market will contribute to the growth of wages, prices, and, consequently, the deployment of inflation. To reduce inflation, it is necessary to pursue a policy of limiting demand, which leads to the curtailment of production, the growth of the unemployed. The increase in the latter becomes the society's payment for the implementation of anti-inflationary policy.
1The article says that an analysis of instability in the financial market was carried out, the causes and forms of instability in the market were identified. The article also contains a study of the efficient market theory. The problems of its use in modern conditions are revealed. Considered the causes of instability financial instruments. The hypothesis of rational behavior of traders in the market, which has a direct impact on the emergence of an unstable situation in the market, has been studied. As a result, it was concluded that the chaotic change in prices in the market appears to be the result of a "random walk" of cost characteristics. The paper reveals that random walk is a special stochastic process that can show both completely unpredictable results and be completely predictable. This feature of the financial series presented on the financial market is only indirectly indicated in modern scientific literature. The article determines that this is a special phenomenon. This phenomenon is partly described only by the Gauss theory.
financial market
instability in the financial market
financial instruments
efficient market theory
risk of financial instruments
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3. Yakimkin V.N. Segmentation of the financial market. – M.: Omega-L, 2006. – 656 p.
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The reasons for the emergence of economic instability are seen in the very structure of the formation and functioning of the financial market. As V. N. Yakimkin notes, financial markets, in fact, are “a huge clearing house, where mutual offset mechanisms operate through appropriate price ratios in order to meet the needs of the subjects acting on them” . Therefore, we can assume that all markets included in the financial market as some sub-sectors are systems in which the mass of participants interact with each other and react to external information in order to determine the best market condition for entering or exiting from economic system. In particular, instruments in the financial market may be of a different nature: they may be securities, differing in types (shares, bonds), currency, monetary assets or financial derivatives of these basic instruments. Having considered the pricing procedure in the financial market, we can make an assumption about its unpredictability. This necessitates a more detailed study of the structural features of the functioning of the financial market.
Suppose that the financial market is represented by a variety of financial instruments with which market participants constantly conduct all kinds of transactions. We can represent this set as a time series. Further study of such a time series will lead us to another number series, which consists of a collection of numbers representing price changes. financial assets for a certain period. The study of this series allows us to conclude that the prices of financial assets behave more unpredictably. As noted by R.N. Mantegna and G.Yu. Stanley, “At first glance, an amazing paradox is revealed: the dynamic characteristics of a time series, for example, reflecting the price of a financial instrument, are essentially indistinguishable from the characteristics of a stochastic process” . One of the main reasons for such behavior of prices is that the pricing mechanism in the financial market implies a significant influence of the risk component. Almost all financial assets in any markets subject to the laws of the financial market are subject to the laws of the functioning of the arbitrage model. This model involves the purchase and sale of the same financial asset in order to profit from the difference in different financial markets. Such transactions can take place both in one market and in different ones, and these markets can be located in different countries, which indicates internationalization and globalization processes in the financial market. Such behavior of market participants leads its participants to the temporary establishment of an effective price.
Thus, the financial market at a certain time was considered a super-efficient market system. However, it should immediately be noted that the efficiency of the market in modern conditions and with existing financial markets is a fantasy area. Despite the fact that markets are very complex systems, accumulating information about the relevant asset in the form of time series of prices, the most widely accepted concept among economists is that markets in the highest degree effective in terms of determining the most rational prices for traded assets. This hypothesis (the efficient market hypothesis) was introduced in the mid-1960s. Theoretical basis for the theory of the efficient market was the work of L. Bachelier. Later this topic was studied by P. Samuelson. In 1965, he formulated the efficient market hypothesis applicable to market conditions and proved mathematically that expected prices change randomly. Using the hypothesis of rational behavior of traders and taking into account market efficiency, Samuelson was able to demonstrate that Yt + 1 is directly related to the price sizes Y0, Y1, Yt, and the relationship of these quantities can be described by the following stochastic process:
where E is the yield.
However, despite the fact that equation (1) assumes following a probabilistic condition, prices in the financial market are also influenced by the intuitive probabilistic fair game model. This leads to unstable changes in the prices of financial assets. So, in the understanding of the player (investor), the game seems to be fair when the gains and losses are mutually compensated and balance each other. For example, an investor's expected savings are equal to his current assets. Hence, the conclusion from this formula is such that any price changes cannot be predicted from a similar historical series of price changes over past periods. In the middle of the 20th century, a sufficient number of studies were carried out on the process of price changes in the financial market, which showed that the price correlation in this perspective is very small.
In the 1980s it has been proven that using the information presented in the time series can predict profits in the short term. Even a time series study of profit/price or dividends cannot give accurate data on the return of an asset.
Thus, empirical observations and research results, theoretical developments show with certainty that price changes in the financial market are difficult to predict, based only on the data of the time series of price changes. In other words, the theory of efficient markets did not bring the expected result.
Any financial time series looks unpredictable and, in fact, its future values are impossible to predict. This does not mean that the financial series does not react to anything, that its prices can never change. Quite the contrary - the time series of prices in the financial market and, as a result, the prices of financial assets carry a very large amount of so-called "incompressible" information. In this regard, the existing time series has some features:
Due to the huge amount of information in this series, it is very difficult, almost impossible, to single out the influence of fundamental economic factors on the price (for example, we can assume that the price of a financial instrument to a greater extent depends only on internal market factors, external factors are of little importance);
The complexity of predicting the price of an asset is not due to a lack of information, but rather, on the contrary, to its excess;
The entire structure of the financial market does not imply at least some linkage to the real sector of the economy or correlation with it, which may be the reason for the creation of price bubbles in the market.
The only exception to this series may be the hoarding market, which consists of assets that increase in value due to market conditions that are created in the respective markets (gold, diamonds, emeralds), i.e. markets for precious metals and precious stones. Although recently the dynamics of growth in the cost of gold indicates a very large share of "hot" capital in this market.
Returning to the peculiarities of the pricing of financial assets, we can state that asset prices are formed taking into account the laws of random walk, as well as on the basis of stochastic Levy processes.
For example, the financial market strives for its efficiency, while it strives to take the position of an efficient market. An efficient market is an idealized system. Real financial markets are only approximately efficient. We can only assume "ideal" conditions, i.e. the existence of a perfectly efficient market, and within this paradigm only develop theories and conduct their empirical testing. The reliability of the data obtained will directly depend on the validity of the assumptions made.
For example, the concept of an efficient market as applied to financial markets would be of value in modeling financial markets. Having accepted these conditions as basic, we can proceed to the study of random processes observed in financial markets.
For example, financial instruments are characterized by the emergence of various risks associated with exchange operations. A number of researchers regard this as a kind of risky situation.
First of all, we should consider the mathematical features of the economic tools of the financial market. Consider the sum of n independent variables of identically distributed random variables Xi:
Sn ≡ x1 + x2 + ... + xn. (2)
In this case, Sn ≡ x(n∆t) should be considered as the sum of n random variables or as the position of wandering particles at time t = n∆t , where n is the number of single steps taken; ∆t - time interval between adjacent steps. Thus, similarly distributed random variables xi can be characterized by certain moments . Such quantities will not depend in any way on i.
The simplest example of a random walk can be a distribution carried out using random steps of size s. In this case, xi can randomly take on the values +s or -s.
In particular, both the first and second cases for such a process can be described as follows:
E(xi) = 0 and (3)
Carrying out further research, we will come to the conclusion that for such a random walk, the value of return E can be calculated as follows:
From equality (4) it follows that if we apply the formulas for the passage to the limit, then the yield can be written in the above form.
Thus, instability in the financial market arises as a result of a self-increasing process. A similar feature of the behavior of prices in the financial market is typical for any segment of the financial market. In particular, we observe a situation of random walk of prices for financial assets in the market. Depending on the procedure for determining the price of a financial asset (in particular, this applies to the risk model that affects pricing), prices in the financial market are subject to chaotic movement, which is far from being dependent on market factors.
In modern theory, there are well-known methods for determining risk:
3) VaRe = VaRα(X - E(X));
4) CVaRe = CVaRα(X - E(X)) .
These methods are used to calculate both the risk of individual financial assets and the risk of investing in portfolios made up of assets traded on the financial market. We again return to the peculiarities of financial assets, which consist in the asymmetric behavior of assets in the market, and to the definition of a wandering value of profitability in the financial market. From equality (4) we can obtain the passage to the limit formula:
Now we can conclude that for a random walk, the variance of any process is represented as a kind of linear process that increases with the number of steps. Thus, the behavior of prices can be considered as a certain passage to the limit of a random walk.
The limit transition of a random walk in the financial market can be written in the form of a certain stochastic inertial process, which, under the condition n - ∞ and Δt nΔt, will tend to a finite value. In this case, we can do the following transformation:
(7)
In this case we have convergence as n - ∞ and ∆t - 0 as s2 = D∆t , and in this case the formula will be represented as follows:
E(x2(t)) = Dt. (eight)
Such a linear dependence of the dispersion s2(t) on t seems to be one of the typical characteristics of the behavior of prices in the financial market. Almost all known market systems are in a similar situation, where prices are subject to random walk. The financial market is no exception. This dependence is one of the types of diffusion process characterized by the possibility of price changes in financial markets. We can classify this stochastic process with full confidence as a category of Wiener processes.
For example, this random walk of prices in the market can be described as a Gaussian process, i.e. the following statement is applicable in the financial market: a random walk is equivalent to a Gaussian process, i.e. random wandering of particles. We can represent such price wandering as a certain trend process.
In different markets included in the financial market, we see uneven changes, i.e. the actual wandering of the prices of financial assets, all these changes appear to be one of constituent parts Gaussian process.
In conclusion, it should be noted that the peculiarity of the formation of prices in the financial market is that the assets circulating in this market change prices in a stochastic manner, which seems to be characteristic of the functioning of the Gaussian process. This feature is typical for the pricing procedure in any financial market and is the main reason for the instability of prices for financial assets.
Reviewers:
Ivanitsky V.P., Doctor of Economics, Professor at the Department of Financial Markets and Banking, Ural State University of Economics, Yekaterinburg;
Maramygin M.S., Doctor of Economics, Professor, Head of the Department of Financial Markets and Banking, Ural State University of Economics, Yekaterinburg.
The work was received by the editors on January 16, 2013.
In the dictionary of foreign words, a crisis (from Gr. krisis - a turning point, a decisive outcome) is defined as: an exacerbated unstable situation; relative (compared to effective demand) overproduction of goods, which inevitably repeats itself in a market economy and leads to a decline in production, an increase in unemployment, etc.; abrupt change, break.
Economic theory interprets the concept of "economic crisis" as follows: "an imbalance between supply and demand for goods and services, which gives rise to a depressive process in the economic environment." In a broad sense - a general, or characteristic of a particular industry or region, the state of oppressed conjuncture. In the strict sense of the word, the crisis corresponds to the process of a sharp turn in the conjuncture in business cycle from a phase of depression to a phase of rapid recovery.
Indeed, many scientists note an enviable constancy in the development of economic crises - all of them eventually lead to a sharp change in the relationship between the state, the population and the economy in various countries, and recently - all over the world. This is probably due to the fact that in an era of crises, state structures are more competitive in the labor market.
Jay Leibovitz notes that the secret of their success is extremely simple: the state, unlike commercial structures, always has at its disposal financial resources and can guarantee officials permanent pay and social benefits. Even if the state salary is lower than the "commercial" one, many professionals opt for the state, as it promises greater stability (it is known that state structures carry out staff cuts much less often than private companies). Because of this, the popularity public work increases significantly during times of crisis.
Robert Higgs noted that the result of these processes, as a rule, is an improvement in the quality of the bureaucracy, which sometimes leads to positive changes in the activities of the entire state apparatus and the armed forces.
However, these changes are minimal, and society has to pay dearly for them. The fact is that, according to Higgs, in times of crisis, people tend to trust the authorities more and assume that officials act more efficiently than they actually do.
At the same time, talented officials successfully solve, first of all, purely bureaucratic tasks: in times of crisis, the size of power structures is constantly growing (never before in the history of the United States has their size returned to pre-crisis values), just like their powers. Thus, paradoxically, in the long run, the influx of talents into power only contributes to the degradation of power.
In times of economic crisis, government institutions often become more corrupt. This becomes a natural consequence of the growth of their influence on the economy. It is on officials that the future of commercial structures often depends: for example, the distribution of government orders or the allocation of financial assistance. This creates a breeding ground for corruption. The first wake-up calls have already sounded: in early 2009, the influential public organization Transparency International warned of a possible increase in corruption around the world.
Another manifestation of the economic crisis is the growing popularity of military service in states where the army has been transferred to a professional footing. Young people, who are less likely to find themselves in civilian life, are more willing to sign contracts with the army. For example, in the last three months of 2008, the US Army exceeded its recruiting plan for the first time in 5 years.
But, as centuries-old practice has shown, every crisis ends sooner or later. Just as in nature, after a cold winter, there comes a time of flowering, then a harvest and a subsequent cold snap, there comes a time of economic stability, then an upsurge, and so on until the next recession. The economy develops cyclically.
Unemployment and its impact on the state of the economic potential of society. Pouken's law
Both 100% employment and high unemployment are contraindicated in a modern market economy.
If we assume 100% employment of the population, then the factor of inefficient use of labor force will appear.
There must be a certain reserve of labor force in the labor market. This reserve is called the natural rate of unemployment. 5-7% of the unemployed of the able-bodied population.
If unemployment is high: Inefficient use of labor force and high level unemployment is fraught with social explosions.
Unemployment is measured by two main indicators.
1. Unemployment rate - is defined as the proportion of officially registered unemployed in the working-age population.
This indicator does not provide a complete picture of employment situations. The study of employment problems, the development of government programs are carried out on the basis of the level and duration of unemployment.
2. Duration of unemployment.
Unemployment, being a product of a decline in production, becomes a link in economic instability and exacerbates this decline. Unemployment worsens the standard of living of both the unemployed and those who have a job, because an excess of labor in the labor market is a good background for lowering the price of labor. With a high level of unemployment, conditions are created for the emergence of social conflicts in society. Business activity is deteriorating. Often, free capital flees from high-risk regions to regions where stable economic development is observed. The decline in people's living standards leads to a decrease, a decrease in consumer demand, to a decrease in the level of savings. And in general, it leads to a decrease in the level (curtailment of part) of production.
Unemployment causes direct losses to society, which are manifested in the following:
Each percentage increase in unemployment results in a shortfall of 2.5% of GNP for society.
Moderate unemployment is a boon for economic growth. Positive points:
Causes and types of unemployment
Many economic schools have tried and are trying to analyze the causes of unemployment. One of the opinions is the opinion of the economist priest Malthus (end of the 18th century), expressed in the work "Experience on the Law of Population". He decided that unemployment was caused by demographic reasons. As a result, their population growth rate exceeds the growth rate of the production of material goods and services. Population is increasing exponentially, and material goods and services - in arithmetic progression.
Karl Marx (second half of the 19th century) in his work "Capital" suggested that the cause of unemployment was the lagging demand for labor behind the rate of capital accumulation. Cyclic development of the market economy.
Pigus (1923), in The Theory of Unemployment, argues that imperfect competition operates in the labor market, which leads to an increase in the price of labor.
Reasons for unemployment:
Types of unemployment:
Problems of social protection of the population in conditions of unemployment
Modern Malthusians propose to maintain stability in the labor market through public policy birth restrictions.
Pigus and his supporters see the root of evil in high wages. Hence it is proposed to reduce wages, as well as the fact that the state should employ those who do not claim high wages. Use of part-time work.
Society should try to minimize the losses from unemployment. First of all, it must create conditions for the unemployed so that they can survive until they find a job, while the society achieves a certain social effect, shows humanity and social stability, which is the basis for further development and subsequent investments. Somehow, both the physical and spiritual health of the society is maintained, and, consequently, the labor force, which at a certain moment becomes unemployed.
Methods:
Also, society represented by the state can develop programs to eliminate unemployment. Such a program may include retraining (retraining) of employees.
In Russia, there is a system of measures to regulate and organize employment of the population.
Regulation of employment of the population, i.e. measures are being developed for financial and credit, tax policy aimed at the rational distribution of production forces. Encourage flexible working arrangements.
There is a federal public service employment. Provides an assessment of the state and analyzes the employment of the population.
The organization of public works is practiced. The state guarantees a number of types of social support for the unemployed:
The market is not always stable. Periods of instability are fraught with inflation, unemployment, and other severe social consequences. At the same time, instability may play into the hands of some companies. The market itself, of course, is gradually stabilizing, but this may take quite a long time. The state cannot completely eliminate market fluctuations, but it is able to smooth them out and reduce social tension.
In the development of the economy, the state is called upon to correct those shortcomings that are inherent in the market mechanism.
III. Market disinterest in solving social and global problems.
The market will not deal with social problems, as it does not bring any benefits. Only the state can pay benefits, pensions, etc. at the expense of taxes.
The market does not contribute to the conservation of non-reproducible resources, environmental protection, and cannot regulate the use of resources that belong to all mankind (the fish resources of the ocean). The market has always been focused on meeting the needs of those who have money.
There have always been such types of production that are "rejected" by the market mechanism. First of all, this production long term payback of capital, without which society cannot do, and the results of which cannot be measured in monetary terms: fundamental science, maintaining the country's defense capability, law enforcement, maintaining employment at the required level, maintaining the disabled, organizing education, healthcare, creating and maintaining the normal functioning of the general economic structures ( money turnover, customs control, etc.).
Inequality of income and wealth generated by the market mechanism everywhere and hourly. This mechanism itself is not at all aimed at overcoming too large differences in the well-being of citizens.
The situation can only be changed by regulating income and wealth. Only the state can solve such a complex problem. After all, this requires the creation of powerful systems of income redistribution and the implementation of other forms of social policy throughout the country.
Thus, in a mixed economic system, the state takes on several tasks (Fig. 1):
1) elimination of the consequences generated by weaknesses (imperfections) of the market;
2) mitigation of income and wealth inequality due to their partial redistribution.
In addition, the need for state regulation of the economy is determined by:
Ensuring the integrity of the territorial space of management;
The presence of natural monopolies;
Limited certain resources;
Creation and maintenance of a developed infrastructure, especially in Russia;
Picture 1. Economic functions states
Ensuring the reliability of information;
Ensuring balance economic interests business entities;
§ legal support functioning market mechanism. Legal protection of producers and consumers is the most important function of the state.
First of all, the right of ownership must be secured. An owner who is not sure of the inviolability of his property will be afraid of its alienation and will not be able to use his creative and material potential to the fullest extent. Much attention is usually paid to antitrust regulation. The ability of individual firms to dictate their prices on the market and impose other terms of transactions is calculated, and measures to combat these phenomena are determined.
In case of natural monopolies the state may resort to setting/fixing prices for the goods of such a monopolist.
The state also seeks to prevent unfair methods of competition, the so-called destructive or destructive competition. For example, there may be a ban on dumping, that is, the sale of goods at bargain prices, usually with the aim of ousting rivals from the market. After competitors leave the market, the dumping firm increases its market share and raises prices to make excess profits.
Practically in all states of the world there are laws that protect exclusive rights (copyright, invention), which can also be attributed to measures to ensure fair competition. Income from works, inventions should be received by their creators. In Russia, copyright infringement is still flourishing.
Highly importance They also have laws dedicated to the protection of consumer rights, since their interests and the interests of entrepreneurs do not always coincide. The issue of consumer protection is also relevant in Russia.
The quality of many goods, as well as the level of service, is not always at a high level;
§ the fact that not all relationships between people are within the market. Thus, the exploration of outer space, the oceans require very high costs, but they are outside the market and are regulated by states.
State regulation of the economy is a system of measures of a legislative, executive and supervisory nature, carried out by authorized state institutions in order to adapt the existing socio-economic system to changing economic conditions.
In other words government regulation of the economy - this is a purposeful coordinating process of the government's managerial influence on certain segments of domestic and foreign markets through micro- and macroeconomic regulators in order to achieve economic growth and stability of the economic system.
To objects of regulation include national and international economics, individual sectors, industries and regions where problems arise that cannot be resolved through market regulators.
Subjects of regulation central (federal), regional and municipal authorities act.
