Instability of economic development. Economic instability: inflation and unemployment

5.4 Economic instability.

The market economy has a certain instability, instability of economic development. However, this instability is not an evil that inevitably leads to catastrophe and the collapse of the economic system. The phenomena of economic instability should be considered and taken into account in the economic policy of the state.

The task of economic policy is to achieve the stabilization of the functioning and development of the economy, thus providing a sound basis for social and political stability.

Among the many forms of economic instability, the most significant are:

cyclical fluctuations in the level of GDP, investment, consumption, employment;
unemployment;
inflation.

Business cycles

Economic development in a market economy involves a successive change in periods of growth in production, the level of GDP, employment, periods of their decline.

The regularity of these successive alternations of ups and downs gives economic development a cyclical character.

Business cycles are periodic fluctuations in the level of economic activity in a society.

The first economic crisis, from which recurring crises are counted, was recorded in England in 1825. Then the crisis began in other countries, repeating every 8-12 years. In 1873, the economic crisis began simultaneously in a number of countries around the world. It was the first world economic crisis in the history of cycles.

In economic theory, there are:

long-wave cycles (Kondratiev cycles) with a period of 50 years, which are associated with the change of generations of equipment and technology;
average (industrial) cycles with a period of 8-12 years, which are associated with the deviation of demand from supply; their length is determined by the period necessary for the mass renewal of fixed assets;

Small cycles with a period of 3-4 years, which are associated with fluctuations in product inventories.

It should be noted that all these types of cycles are superimposed on one another.

We will consider and characterize the main phases of the average (industrial) cycle.

Phases of the middle (industrial) cycle

A cycle is a period of time during which the following phases change in succession: recession, depression, recovery and recovery.

Decline - starts from the peak of the previous cycle and continues to the lowest point of the cycle.

This phase is characterized by a sharp decline in business activity. Firms suddenly find that they have overestimated the projected demand for their products and are unable to sell the goods produced at the previous prices.

In order to sell the resulting surplus, they are forced to reduce the prices of their products. Firms suffer huge losses, they are not able to return the loans taken and pay interest on them. A wave of bankruptcies begins and spreads throughout the economy. Unable to sell already manufactured products, enterprises reduce production volumes. Of course, there is no longer any talk of expanding production, and, as a result, enterprises are reducing their investment in production, and the demand for equipment is falling.

The decline in production causes a wave of dismissals of workers, unemployment is growing. People's incomes are falling. Due to the decline in income, and also because of the desire of people to put aside part of these incomes “for a rainy day”, the population’s spending on consumer goods is falling, which means that the demand for consumer goods and services is decreasing.

The standard of living of the employed is declining. Panic and general pessimism reign in society. We note in particular that during this period, interest rates on loans are growing: firms tend to re-borrow money in order to avoid bankruptcy, there is a general pursuit of money, and the demand for free cash is growing. In addition, banks themselves seek to set higher rates, as there is a high risk of non-repayment of loans issued by them.

Perhaps the most severe was the recession of 1929 - 1933, which went down in history under the name "Great Depression", then the United States, according to economists, was thrown back by 146 years, national income decreased by almost 2 times, per capita income decreased by 30%, the unemployment rate reached 25%.

Depression: Having reached a low point, the economy remains in this state for a while.

The decline in production has practically stopped, and production and employment are at their lowest levels. Enterprises avoid long-term investments, the population does not make expensive purchases. Everyone is in a state of uncertainty, afraid to start new business.

However, commodity stocks are gradually dissolving, the fall in consumer and investment demand stops, and commodity prices stabilize. Since the demand for money has now fallen sharply, there is a decrease in interest rates on loans to the lowest level.

And the business world is slowly starting to come to life: enterprises that have managed to survive the crisis are beginning to upgrade equipment, acquiring more modern technology (fortunately, loans are now more available), introducing new technologies, and taking measures to improve production efficiency. Their goal is to reduce costs in order to make a profit in the conditions of low prices for products.

As a rule, without the participation of the state, the way out of the state of depression proceeds very slowly, but, having reached the bottom, production gradually begins to gain momentum and the depression is replaced by a revival.

Recovery - begins at the lowest point of the depression and ends when the economy reaches the pre-crisis peak.

The beginning of economic activity revitalization creates an expectation of an increase in the level of current income. This is manifested in a gradual increase in consumer demand. In response, production begins to increase, primarily due to the involvement of free capacities, employment grows and, as a result, incomes (profit, wages) grow.

Incomes are rising both nominal and real. People have the opportunity to purchase the goods they need. As a result, there is a further increase in demand. At some point, it becomes clear that it is no longer possible to expand production without large-scale investments, and their rapid growth begins. Enterprises have all the conditions for investment growth: there is an opportunity to expand production through relatively inexpensive loans and there is a motive - profit growth. Investment demand is growing and at the same time there is an expansion in the production of almost all goods and services.

The expansion of production contributes to the emergence of new jobs, an increase in demand for labor and, accordingly, an increase in employment. The well-being of people is growing, in society pessimistic moods are replaced by optimistic ones.

Economists note that at this stage, demand growth outstrips supply growth and, as a result, aggregate demand exceeds aggregate supply.

It should be noted that, since there is an increase in demand for all types of resources, including monetary resources, then simple interest rates begin.

Rise: comes after the revival phase and continues until its peak.

At this stage, the "trot goes into a gallop", there is an acceleration of economic development, which is manifested in the fact that new goods, new enterprises appear, investments grow, interest rates, prices, wages, and employment grow. Part of the demand begins to be speculative: many people have a desire to purchase goods in order to resell them profitably, since prices for most goods are rising. Large loans are taken for these purchases, i.e., demand is partially supported by loans. When approaching the peak - the highest point of recovery, the economy overheats. Credits become more and more expensive, inventories grow, and inevitably there comes a moment when the whole system collapses like a house of cards, and again the economy finds itself in a state of deep crisis.

In the vast majority of cases, each subsequent “peak” turns out to be higher in level than the previous one, which reflects the overall growth of the economy, its progressive development

Economists attribute the sharp transition from boom to recession to the fact that production growth is purposefully and systematically organized by producers, while demand is spontaneously formed in the market by buyers and depends on many random factors. And since demand can easily decline, this is exactly what happens during a recession: aggregate supply is greater than aggregate demand.

Of course, the crisis for the country's economy is a big test, it brings many negative aspects, but let's note the positive side of the economic crisis, which is the recovery of the economy. According to the principle of natural selection, inefficient enterprises with a high level of costs go bankrupt during a recession. The "surviving" enterprises carry out innovations that lead to increased efficiency, and in the future to an increase in production. Old technologies are being replaced by new ones.

At present, recessions in developed market economies have become less deep (up to 2% of GDP) and shorter (6-12 months). There is a clear violation of the classical cycle, the phases of the cycle have become more blurred, some phases completely drop out. Now, in the recession phase, there is no decrease in prices, on the contrary, there is an increase in prices. This phenomenon is called stagflation.

Stagflation is a simultaneous increase in inflation and a decline in production, accompanied by an increase in unemployment.

The emergence of stagflation is explained by the fact that the state has a monopoly on the issue of money. The importance of production monopolies has increased, which prefer not to lower prices, but to reduce the volume of production; trade unions have appeared on the labor market that do not allow wage cuts.

Reasons for business cycles

There is no consensus among economists about the causes of this complex phenomenon. Each economic school explains the nature of economic cycles in its own way.

Some economists argue that cycles are related to the influence of external factors. They name such factors as major discoveries in science and advances in technology, natural disasters (droughts, floods), wars, revolutions and other political upheavals, population fluctuations, etc. There is a theory that explains cycles by changing the ratio of pessimistic and optimistic moods in society . There is even a theory that links the dynamics of the economic cycle with changes in the configuration of sunspots.

Other economists believe that the explanation of the cycle lies in the internal processes occurring in the economy, and external factors are of secondary importance. They believe that crises occur because there are contradictions between a rigid organization of production and an unregulated market, that the spontaneous development of the market leads to market imbalances, and this in turn leads to sectoral imbalances. That the crisis can also be caused by failures in the monetary sphere and errors in the state budget policy.

However, almost all economists agree that:

Fluctuations in the level of economic activity is a consequence of the deviation of the economy from the equilibrium state;

Of decisive importance in the movement of the cycle are investments in real capital, primarily in machinery and equipment;

The state can actively influence the mechanism of the cycle, using the methods of budget policy for this, i.e. by regulating their income and expenses, as well as the methods of monetary policy, i.e. by regulating interest rates and the money supply.

In order to regulate the economy, the state conducts targeted economic

5.2 Government policy to stabilize the economy

The main goal of the socio-economic policy of the state is to ensure economic and social stability and promote the economic development of the country. This general goal can be fleshed out into the following goals:

economic growth (allows for a higher standard of living);
full employment (provides the population with income and saves society from losses associated with underutilization of labor resources);
economic efficiency (use of resources with maximum return for society);
economic freedom (providing freedom of choice, freedom of entrepreneurship, etc. within the framework of the law);
growth in the well-being of citizens (all citizens should be given the opportunity to lead a life worthy of a person);
price stability;
ensuring strong positions in relations with other countries.

The economic development stabilization policy includes three components: counter-cyclical policy, full employment policy and anti-inflationary policy. At the same time, each of these areas of stabilization policy cannot be carried out in isolation from its other areas.

To achieve these goals, the state applies the following methods of influencing the economy.

1) Administrative methods are based on the power of state power and include measures of prohibition, permission and coercion. The fact is that the state has special rights that other actors in the economy do not have, first of all, this is the right of coercion. The state has the right, for example, to force you to pay taxes, and if you refuse, it can deprive you of your property and even put you in jail. To control compliance with the rules established by the state, it creates special bodies, for example, the tax police. Administrative methods are methods of direct impact on economic entities.

Economic instability and unemployment

Economic situation. As you know, the economy of any country develops cyclically; growth does not occur evenly, but is interrupted by periods of economic instability (rising unemployment, inflation, falling GNP, etc.). Experts identify four phases of the economic cycle peak - the economy is at full employment, and production is operating at full capacity, the price level tends to increase, and the growth of business activity stops, then a recession follows - production and employment are reduced, but prices do not succumb to the downward trend the point of decline is characterized by the fact that production and employment, having reached the lowest level, begin to climb out again from the bottom, finally, in the recovery phase, the level of production rises, and employment increases. Despite the phases common to all, individual economic

The neoclassical system was a logically connected and detailed theoretical concept, but economic instability (crises, unemployment) did not fit well into it. She was unable to explain the reasons and

In each specific case, these problems will be solved in their own way. For example, in the Republic of Belarus, the labor market is characterized by the presence of a large number of inefficient jobs and their slow renewal, insufficient investment in the creation of new jobs, which further aggravates the imbalance in the supply and demand of labor in the labor market. These problems can be resolved only by harmonizing the needs of the labor market in the labor force with the structure of jobs in the economy and the system of professional training. And this requires certain steps on the part of the state to intensify innovation and investment activities, create favorable conditions for the development of small businesses and entrepreneurship, update and improve the structure of jobs, create new jobs by improving the development of the service sector. The sustainable development of small business contributes to the creation of new jobs, and also reduces the dependence of employment on large economically unstable and unpromising enterprises, and reduces the risk of unemployment. The share of people employed in the manufacturing sector is declining from year to year, while in the service sector it is increasing. For

The relevance of the problems of employment and unemployment is explained by the fact that, firstly, ensuring full employment is one of the most important goals of the national economy, and secondly, unemployment is a form of manifestation of the instability of economic development. Unemployment has negative economic and social consequences. The study of the problems of employment and unemployment contributes to the identification of the causes of unemployment, the development of an effective employment policy. 84

From the previous chapter we learned about aggregate demand and aggregate supply, and in it we also got acquainted with models of macroeconomic equilibrium. But macroeconomic equilibrium in practice is rather a surprising contingency, the exception that proves the rule that the market economy is unstable. The economic history of the last two centuries gives us a great many examples of this instability. Periods of successful industrial development and general economic prosperity have always been followed by periods of recession, accompanied by a fall in output and unemployment.

For the high performance of the market mechanism, in addition to clearly delineating the boundaries of state intervention in its functioning, it is necessary to solve many other problems. First of all, it is necessary to neutralize the effect of such factors destabilizing the economy as inflation, monopoly and involuntary unemployment. Their emergence is directly related to the functioning of the market, which itself, without the help of the state, is not able to fight them. The activity of the state to strengthen the market mechanism is not limited only to the fight against these factors of economic instability. It should also include state incentives for free enterprise, denationalization of property and privatization, the formation of an optimal tax policy, and much more that is under the jurisdiction of the state and without which the competitive market system cannot work normally.

In the fourth basic section, devoted to determining the volume of output (chaps. 12-18), we return to the problem of economic fluctuations and the role of the state in economic stabilization. We will give a description of the Keynesian theory of output determination, with particular emphasis on the case of an open economy. Here we will talk about a possible compromise between unemployment and inflation, as well as about the role in the formation of the macroeconomic situation and various shocks - in the emergence of instability in the economy.

In Russia, during the period of the course of reforms, the unemployment rate (taking into account those working in the part-time mode and those on leave at the initiative of the administration) reached more than 20% of the active population. The critical, threshold value of the unemployment rate in international practice (with a normal system of social protection of the unemployed) is 10%. During the period of reforms, as the experience of a number of countries shows, its growth to 15-20% is possible, but for a period not exceeding 3-5 years. In the current situation in Russia, the growth of unemployment, which is a factor in deepening poverty and social instability in society, is turning into one of the most significant threats to economic security and social stability. On the one hand, the narrowing of families with rising unemployment, causing the degradation of consumption, cannot but become a factor in the impoverishment of the population, and, consequently, a slowdown in economic growth. On the other hand, an increase in the unemployment rate leads to an increase in crime and the number of suicides.

In a sense, the requirement for the government to balance the budget over a period equal to a calendar year is arbitrary. However, the alternation of the seasons and well-established accounting practice give strong reasons for such a requirement, and business practice, in which income and expenses are regularly balanced with known deviations, further supports it. If large economic fluctuations can be prevented by other measures, then such balancing is best done during the traditional budgeting year. Assuming that the regulation of the money supply by competition between private currencies should indeed ensure not only the stability of the value of money, but also the stability of the economic environment, the argument that government deficits are necessary to reduce unemployment is reduced to the assertion that government control of money is needed to cure the disease, which he called. It is not clear why in general, in conditions of stable money, the government should have the right to spend more money than it has. And, of course, it is far more important that government spending does not cause general instability than it is to engage an unwieldy government apparatus (assuming it is unlikely to work in time) to counteract any weakening in economic activity.

The thesis about the supposedly voluntary nature of unemployment is also put forward. However, if unemployment is of such a nature, then why does it fluctuate depending on the phase of the economic cycle of the workplace, employees are very picky and strive for the most profitable work. However, even in this case it is not clear why such workers are sometimes 4-5%, sometimes all 15%. But the main question that supporters of the neoclassical approach cannot answer is why all employees, if their supply exceeds demand, do not offer their own labor force at a lower cost

The growing gap between the demand for food and the possibilities of its sustainable production in the world, accompanied by price instability and competition in the world market, can significantly destabilize the world economy as a whole. The situation may be exacerbated by the interconnectedness of economic, environmental, social and political problems, which leads to an increase in unemployment, a reduction in incomes of the population, malnutrition, an increase in morbidity and a decrease in the quality of life of the population. For example, the annual catch of fish in the world is about 83 million tons. However, according to the Food and Agriculture Organization of the United Nations, about 70% of the world's fish stocks are depleted as a result of their intensive exploitation, the recovery process is extremely slow.

The thesis about the supposedly voluntary nature of unemployment is also put forward. However, if unemployment is voluntary, then why does it fluctuate depending on the phase of the economic cycle? The thesis is also put forward about finding a job as a phenomenon that causes market instability. Its essence lies in the fact that employees are very picky and strive for the most profitable work. However, even in this case it is not clear why such workers are sometimes 4-5%, sometimes all 15%. But the main question that cannot be answered

For economic risk protection, as well as security, it is not the indicators themselves that are important, but their threshold values. Threshold values are limiting values, non-compliance with which prevents the normal course of development of various elements of reproduction, leads to the formation of negative destructive tendencies. As an example (in relation to internal threats), we can name the unemployment rate, the gap in income between the most and least wealthy groups of the population, inflation rates. Approaching their maximum permissible value indicates a growing threat to the socio-economic stability of society, and exceeding the limit or threshold values indicates that society has entered a zone of instability and social conflicts, that is, a real undermining of economic development. From the point of view of external threats, indicators can be the maximum permissible level of public debt, maintaining or losing a position in the world market, dependence of the national economy and its most important sectors (including the defense industry) on imports of foreign equipment, components, products or raw materials.

The indicator is the number of recorded crimes per 100,000 inhabitants. Why this indicator is important A low standard of living and unemployment entail a low level of culture, a decline in morals and morals. As the standard of living falls, the crime rate rises proportionally. The lack of funding for the maintenance of law enforcement agencies entails a reduction in the number of patrol officers, which in turn increases the risk of every city resident becoming a victim of a crime. The increase in crime is the result of many unresolved economic, political and social problems of society. The indicator of the number of crimes shows the level of social tension and instability in the territory. It is used to assess the state and trends in the dynamics of crime in the region and, accordingly, activities to combat crime and reduce crime in society. This indicator shows the number of all reported crimes per 100,000 population. The negative dynamics of the indicator characterizes the sustainable development of the region.

Let's start by looking at three well-known facts about the growth of Latin American countries over the past 20 years. The first fact is that the economies of many of these countries were extremely dynamic, showing a high rate of industrial growth, but that this high rate of growth was highly unstable, systematically exacerbating inequality in income distribution. The best example is given by Brazil, where the average annual growth rate of GNP in the period 1965-1980. amounted to 8.5%, but in 1980-1982. dropped to minus 0.3%. The income share of the richest 20% of the country's population increased from 54% in 1960 to 62% in 1970 and 63% in 1980. The second fact is that, despite significant vertical mobility, the level of real wages of unskilled workers during for a long time it was not possible to rise significantly, and industrial growth, even during economic booms, could not accept the excess

"Finance: planning, management, control", 2011, N 5

The economic systems of all countries of the world, based on market mechanisms, are characterized by cyclical development - after a significant economic recovery, there is always an economic recession. This statement is also true for regional economic systems, which are subsystems, elements of the country's economic system. As a rule, the state of the regional economic system correlates with the state of the country's economic system.

The governments of all states, regional administrations, individual business structures strive to achieve constant economic growth, but so far no one has been able to do this. Practical research confirms that in any economic system based on market mechanisms, oscillatory processes, wave-like movements occur due to the imperfection of these mechanisms. At the same time, fluctuations in market activity in different economic systems differ quite strongly in regularity, duration, and causes. With a period of several years, economic growth and the rise in business activity are replaced by a decrease in macro-, meso- and microeconomic growth indicators. An economic recession sets in, supply and demand shrink, and business activity dies out.

The economic downturn is characterized by the identification of unstable phenomena in the economic system, which first slow down the development of the entire system, forcing it to adapt to new operating conditions, and then the economic system begins to develop at a faster pace until it accumulates new contradictions and unstable phenomena in its structure. Then this cycle is repeated again.

However, in the economic literature, more attention is paid to the stable state of economic systems, equilibrium and stability. This misses the point that without instability there can be no stability and order. These two opposite states are one whole of one process - the development of the economic system.

If economic stability is defined as a stable state of the economic system that ensures the optimal functioning and development of this system, the preservation of its main characteristics under the influence of internal and external changes, then the economic instability of the economic system is its state when there is a decrease in the pace and dynamism of its development, the appearance stagnant processes and phenomena, the emergence of tension in business circles, characterized by a decline in business activity and an increase in mistrust of business structures to each other.

Instability is constructive through destructiveness: stability arises from instability and from it, instability, like stability, underlies the development of an economic system. Instability is destructive through constructiveness, since the complex ordered structures that have arisen by this moment become more and more unstable.

The constructive role of instability in the development of the economic system is manifested as follows:

the growth of unstable phenomena in the economic system is a signal for the system to enter one of the new ways of development, one of the possible structures;
instability underlies the mechanism for combining simple structures into complex ones, the mechanism for coordinating the rates of their evolution (co-evolution), i.e. leads to the need to coordinate the interests of all economic entities at different levels of the country's economic system in order to overcome the existing contradictions;
instability can act as a mechanism for switching, changing different modes of system development, transitions from one relatively stable structure to another.

co-evolution- coupled, interdependent change of systems or parts within the whole. This is the principle of global evolution. The concept itself comes from evolutionary population theory.

The concept of coevolution is closely related to the concept of self-organization. Self-organization deals with the structures, states of developing systems, and co-evolution deals with the relationships between such systems, with the interconnections of evolutionary changes.

The stability of the development of an economic system of any order is achieved through overcoming unstable phenomena that have accumulated over a certain period of development and functioning of various elements of the system. The concept of instability in the development of the economic system of the region must be freed from a negative connotation, since this feature is inherent in such complex systems as the regional economy. It is instability that can act as a condition for stable and dynamic development. In the regional economic system, which is in an equilibrium state for a long time, contradictions accumulate, leading to an unstable state due to the fact that the system with this structure is unable to solve the problems of ensuring human life. The economy of the region is able to develop effectively only after the resolution of these contradictions. For stable stationary systems, a small perturbation "falls down" on the same solution, on the same structure. Without a pair of instability-stability, there is no development. Instability gives impetus to a new stage in the development of the system.

As I.R. Prigogine, "the term" instability "has a strange fate. Introduced into wide use quite recently, it is sometimes used with a barely concealed negative connotation, and, moreover, as a rule, to express content that should be excluded from a truly scientific description of reality. Order and disorder Thus, they turn out to be closely related - one includes the other. And we can evaluate this statement as the main change that occurs in our perception of the universe today ... Yes, the world is unstable. But this does not mean that it is not amenable to scientific study "Recognition of instability is not capitulation; on the contrary, it is an invitation to new experimental and theoretical studies that take into account the specific nature of this world."

Stability is the stay of the process in a strict space-time framework. An example of stability in physics are constants (Planck's constant, Newton's first law, the speed of light in a vacuum, etc.). In the economy, this is market equilibrium, perfect competition, freedom of economic entities. Stability is distinguished by its coherence, i.e. homogeneity over large space-time intervals.

Stability- a strict set of properties, where the slightest fluctuations are considered as interference, as a breakdown into instability.

instability- the state of the system, characterized by the heterogeneity and diversity of each of the ongoing processes and all changes in general. It is a form of observable relationships and causation of all phenomena, the opposite of a stable state.

The human environment, including nature and society with its superstructures, is unstable, unstable, non-equilibrium, developing. When considering the problems of such a world, one must take into account its two opposite and interrelated, mutually determining qualities - stability and instability, order and chaos, certainty and uncertainty.

Instability is a condition for the stable and dynamic development of the economic system of the region, which occurs due to the destruction and removal of non-viable forms. Stability and instability in the system, the formation of new structures and the destruction of old ones, replacing each other, develop, evolve the system. Stability and instability arise and exist simultaneously: one includes the other - these are two aspects of one whole, they give us a different vision of economic processes and phenomena.

Modern science, including economics, deals with complex systems, the connection between which is carried out not only through order and stability, but also through instability. Only in the unity of stability and instability can the evolution of the complex economic system of the region and its elements be studied. A complex regional economic system is a whole, consisting of stable and unstable parts. The evolution of such a system leads to a new quality, to a new round of dynamic development.

The evolution of a system can, as mentioned above, be understood as a purposeful movement, a change in this system along a certain development trajectory, consisting of points of states of stability and instability.

In recent years, a new direction of research has been actively formed - evolutionary economics. The wave-like, cyclical nature of the action of the basic laws is observed in an open economic system. State regulation, its scope and significance are undergoing significant changes as the economy evolves. A decrease in the role of the state will alternate with periods of its undulating increase. The decrease in the role and importance of the state regulation system during the evolution of the socio-economic system will alternate with its strengthening at certain stages of instability in the economic system, there will be periods of liberalization and control over prices and wages.

The stability of the system is its ability to maintain its movement along the trajectory at such a level of resource consumption that can be self-sustaining, self-regulating for a long time.

Traditional macroeconomics focuses on continuous and, most often, quantitative growth, and not on sustainable development, which does not take into account the effectiveness of the development of the economic system.

Efficiency of system development - the effectiveness of the system development process, defined as the ratio of the result, the effect of its operation to the costs that led to the receipt of the result.

For modern economic systems, it is relevant to develop mechanisms that would ensure their sustainable development without a quantitative increase in resources, with the help of labor, cost and capital produced.

The evolution of the system is determined by the struggle of organization and disorganization in the system, the accumulation and complication of information, its organization and self-organization, the complexity and diversity of intrasystem processes. An important criterion for the effectiveness of the system is its dynamic, structural and organizational predictability, the absence of anomalies and ensuring dynamic growth, the presence and dynamic updating of criteria for evaluating decisions made.

The study of stability and instability in the development of the banking system should be given special attention, since it is this system that is the main barometer showing the state of the economy. Banks and non-banking organizations that are part of the banking system are a fundamental block that allows the economic entities of the country to function and develop effectively. The state of stability and instability of the banking system is directly related to the state of the finances of the real economy, the finances of the national economy, as well as the state of financial ties between the sectors of the real economy of the regions with each other.

The banking system is in an area of stability when it contributes to the functioning of the economy, rather than hindering it, and dissipates financial imbalances that arise as a result of significant negative and unexpected events.

The state of stability of the banking system is characterized by the following main features:

stability of the payment infrastructure (uninterrupted settlements in the economy);
stability of financial institutions (banks and non-bank financial intermediaries);
stability of interest rates in the interbank market (absence of excessive volatility);
margin of safety in the banking system, sufficient to enable it to withstand negative economic shocks in the future, absorb negative economic shocks and not spread them to the real economy;
efficient distribution of financial resources in the economy;
effective management of financial risks in the economy (identification, quantitative assessment, pricing and redistribution of risks).

The stability of the banking system is related to the problem of ensuring the highest possible level of financial stability in the economy, i.e. stability of financial relations in all sectors of the economy.

According to the definition of F. Mishkin, "financial instability occurs when shocks that affect the financial system impede the flow of information in such a way that the financial system can no longer do its job of channeling money to where there are opportunities for productive investment."

According to P.V. Kallaura financial instability (destabilization) implies such a balance of risks and / or vulnerability in the financial system, in which it ceases to perform its functions, key financial intermediaries are unable to meet their financial obligations, and negative shocks are transmitted through the financial system to the real economy.

H. Minsky believed that instability in the banking system is a normal functioning, internally generated as a result of the behavior of the capitalist economy. Instability, in accordance with the views of H. Minsky, is endogenously present in a market economy, is associated with the cyclical dynamics of markets and the economy as a whole, and can lead to instability even without the action of external shocks.

Let us consider the process of growing unstable phenomena in the economic system according to the concept of H. Minsky.

The recovery phase of the business cycle, which H. Minsky calls "a state of calm growth", is stimulated by an increase in the optimism of economic entities. The expected income from the use of capital assets is growing, the investment process is gaining momentum. However, the risks are still high because the recent recession and depression are fresh in the minds of entrepreneurs and bankers. Therefore, most of the investments are financed from domestic sources, and this is the reason why the economy is dominated, in H. Minsky's terminology, by secured financing. According to H. Minsky, the financial system in an economy with secured financing is "strong" in relation to external shocks and influences.

Thus, a "state of calm growth" is ideal for the economy. Aggregate demand and real output are rising rapidly, current output prices are growing steadily and slowly if they are rising, the unemployment rate is forcibly approaching natural, and besides, thanks to the predominance of secured financing, the financial system is healthy and “strong”. However, the "state of calm growth", considered as normal for an economic system, as a state to which such a system naturally aspires, in reality is not self-sustaining, as shown in the concept of H. Minsky.

The longer the economy is in a "state of calm growth", i.e. the longer prosperity lasts, the more optimistic the expectations of business entities become and the more the risks of the borrower and lender decrease. Business entities are increasingly showing "an incentive to invest", but, due to the lack of their own funds, they are forced to switch to external financing. In other words, firms are more willing to issue liabilities in order to acquire assets. Banks and other financial institutions respond to this by not only increasing the amount of money in circulation, but also offering qualitatively new types of money. During this period, the largest number of financial innovations occur that change the quantity and quality of money: on the one hand, the structure of money becomes more complicated due to the emergence of less and less liquid “quasi-money”; on the other hand, the quantity of money and/or the velocity of its circulation increases.

If, however, the Central Bank, in an effort to cool the market, raises the interest rate and reduces the money supply in the economy, then this only adds fuel to the fire of the ingenuity of financial intermediaries. High and rising interest rates reward financial innovation. The increase in reserve requirements in relation to traditional forms of credit money (demand deposits, etc.) and other similar measures are pushing financial institutions to create new forms of money that have not yet been brought under the control of the Central Bank. This is especially facilitated by the use of a "strategy of managed liabilities".

As a result of this financial evolution, the money supply is slipping away from the tutelage of the "creators of monetary policy", so that its effectiveness is weakening.

As a result, both borrower and lender risk reduction and financial innovation are changing the type of financing that the business sector uses in its investment activities. Firms switching to excessive external financing has the following results:

a) speculative financing, in which current cash inflows are sufficient only to pay interest, but they are not enough to amortize the debt, and the business sector is forced to resort to new loans, implementing the so-called rollover loan;

b) " Ponzi financing", in which current cash inflows are not enough even to pay interest on a loan, and the business sector is forced to increase debt. "Ponzi financing" is nothing but a "pyramid scheme".

With the prevalence of these two types of financing in the economy (and especially the latter), the financial system becomes, according to H. Minsky, "fragile"; instability in the economy is increasing, and the pendulum of business activity is swinging more and more in it.

It should be noted that "Ponzi financing" is generated not by the fraud of firms, but by the general financial and economic situation and, above all, by the growth of interest rates. Their increase leads to an increase in the current financial obligations of firms under a system of floating interest rates or when using a rollover loan, i.e. with speculative financing. In the latter case, rising interest rates will inevitably transform speculative financing into Ponzi financing.

But "Ponzi financing" is short-lived. Sooner or later, entities using this type of financing will not be able to increase their debt to pay obligations, at least because of the risk of the lender, but also because of the general lack of liquidity in the economy. That is why the greater the weight of speculative and Ponzi financing, the greater the fragility of the financial system.

The concept of financial fragility is extremely important in Minsky's theory. Not coincidentally, as already noted, his “financial instability hypothesis” is often also called the “financial fragility hypothesis”. Based on these definitions, it becomes clear why speculative and Ponzi financing breeds financial fragility. It is also understandable why financial fragility is perhaps the main cause of the cyclical downturn. However, the main conclusion that can be drawn at this stage of the analysis of Minsky's theory is the following. Increasing the degree of financial fragility (financial fragilization) of the economy is an integral element of the development of the country's economy. Economic development is impossible without financial fragilization. But since such fragilization creates the prerequisites for changing the economic upsurge into instability, the development of the economic system is cyclical in nature and cannot proceed evenly and in a balanced way.

In our opinion, the concept of financial instability by H. Minsky is a confirmation of the unity of the aspects of stability and instability in the process of developing the region's economy and, in particular, the development of the banking system of the region.

The main signs of instability of the banking system at this stage of development of the country's economy are:

the inability of the banking system to adequately perform the functions of accumulation and mobilization of temporarily free funds;
inability to meet the needs of business entities and individuals in credit resources, high interest rates on credit resources;
inability to ensure timely settlements and payments in the economy;
unreliable assessment and management of financial risks in the banking system;
poor-quality management of the institutions of the banking system of the region in the current conditions of the economic situation;
high volatility of interest rates in the interbank market due to distrust of the institutions of the banking system to each other.

Instability in the banking system arises due to the growth in a certain period of time of a significant number of negative trends and contradictions of a macroeconomic and microeconomic nature. They are the result of a combination of both external, in relation to the banking system, factors, and shortcomings of the banking system itself.

The main macroeconomic factors of instability in the development of the banking system are:

high ratio of domestic credit to GDP;
rapid growth in the money supply;
the outflow of depositors' funds from banks due to distrust in the banking system of the country as a whole;
decline in exports caused by unfavorable shocks in world markets;
revaluation of the national currency in real terms; significant external debt;
weak coverage of short-term liabilities by reserves; low economic growth rates;
negative shocks in the stock market;
low gold and foreign exchange reserves;
high interest rates in the global capital market;
outflow of capital from the country;
rise in national interest rates.

Macroeconomic factors and problems are the main causes of instability in the banking system of the region, since the macroeconomic environment determines the field of activity of banks. However, the instability of the banking system occurs when the accumulated problems of most banks (microeconomic factors) and mesoeconomic factors, which can be exacerbated by sharp changes in macroeconomic factors, manifest simultaneously.

Business cycle

The reasons for the cyclical development of the economy by individual 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 the economic activity of 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.

In economic theory, there are various 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 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 burying 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.

In recent years, the most popular concepts of "natural", "normal", "socially acceptable" level of unemployment, exploring the relationship between unemployment and inflation, money circulation, 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 a 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 productive job, with better working conditions and pay, 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 high-tech Russian industries, the implementation of 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 opportunistic 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.

In a market economy, the cyclical nature of development is characterized by economic instability, which manifests itself in the growth of unemployment

Unemployment as an economic phenomenon arises as a result of self-regulation of a market economy, covers a certain part of the able-bodied population, temporarily does not have the ability to practice the Law of Ukraine "On employment in the population" dated March 1, 1991, recognizes as unemployed able-bodied citizens of working age for reasons beyond their control, not have earnings or earned income, are registered with the public employment service as job seekers. They are able to work and are ready to work, but this service does not provide proper work, that is, such a workplace, which corresponds to the professional training of a citizen, his length of service and experience, age and transport accessibility.

A citizen of Ukraine receives the status of an unemployed person if his employment contract is terminated due to production changes and he registers with the employment service within the next 10 days. For the first three months, the worker retains the average monthly salary so that he can look for a new job. If the worker has not found this period of proper work, and the employment service has also not offered him anything, he receives the status of unemployed. In Ukraine, unemployment assistance is paid from the eleventh day after the registration of a citizen in the state employment service and, but not more than 12 months over the next three years, and for persons of pre-retirement age - 18 months. The amount of the benefit is guaranteed not less than 50% of the average wage at the previous place of work, but not less than the minimum wage established by law. Citizens who are looking for a job for the first time or after a break of more than one year receive an allowance in the amount of at least 75% of the minimum wage.

The causes of unemployment can be the following phenomena:

1) the rate of population growth exceeds the rate of production growth (T. Malthus, 18th century);

2) the relative lag of the demand for labor from the rate of capital accumulation, the growth of the technical and organic construction of capital (K. Marx, 19th century);

3) in conditions of imperfect competition in the labor market, there is an increase in prices and a decrease in demand for labor (A. Pigou, 1923);

4) as incomes rise, people tend to increase their consumption, but not to the extent that income grows; the propensity of the population to consume is declining, and to saving is growing (J. Keynes, 1936);

5) the cyclical development of the economy at the stage of the economic crisis, the decline in production leads to a decrease in the aggregate demand for goods and services, to a decrease in the level of employment of the able-bodied population;

6) the development of scientific and technological progress predetermines structural shifts in the economy, the emergence of new industries that require skilled workers and more time for professional training and retraining of workers in old sectors of the national economy

7) seasonal changes in production levels reduce the demand for labor in agriculture, construction, etc.;

8) the growth of the population of working age, youth, increases the supply of labor;

9) the economic policy of the government to increase the minimum wage leads to an increase in production costs and a decrease in demand for workers

Specialists classify unemployment according to the reasons for its existence:

1. Frictional unemployment is associated with the constant movement, search or expectation of work by the population as a result of a change of residence, profession, due to the birth of a child and caring for him. Such unemployment is of a natural nature and should not be continued too long.

2 structural unemployment arises under the influence of scientific and technological progress and covers those workers whose labor cannot be used in new jobs and require a certain amount of time for additional training and retraining.

3. Cyclical unemployment is caused by a shortage of demand during an economic crisis, a decline in production and stagnation

4. SEASONAL unemployment refers to workers employed only during certain times of the year

5. Institutional unemployment occurs as a result of the low efficiency of the organizational structures of the labor market, public employment services (lack of information about vacancies, working conditions, etc.).

6. Hidden unemployment exists in the conditions of incomplete use of the enterprise's resources, while employees are forced to work a shorter working day, switch to temporary work or go on additional unpaid leave.

7. Voluntary unemployment is created by individuals who do not want to work and have lost this opportunity and connection with working life for a long time.

8. Natural unemployment constantly takes place in conditions of economic equilibrium between the demand for labor and the supply of jobs. It is equal to the sum of frictional and structural unemployment rates. The level of natural unemployment should not exceed 4-5% of the employed population. The content and significance of natural unemployment in the modern conditions of developed countries was determined by representatives of the monetarist model of the labor market - American economists, laureates. Nobel Prize. M. Friedman (1976). F. Hayek (1974) and i4) and in.

Unemployment as a factor of economic instability causes certain negative consequences, which should be taken into account in order to develop an effective system of measures to regulate the development of this phenomenon. The state will take measures to reduce the level of negative consequences of unemployment.

Unemployment generates losses in production. A. Okun discovered the mathematical relationship between the unemployment rate and the volume. GNP: if the actual rate of unemployment exceeds the natural rate by 1%, the gap is wide. GNP is 2-2.55%.

Unemployment reduces consumer demand, savings of the population, investment demand, the number of jobs and significantly reduces the volume of production. The unemployed lose their professional skills to work, which does not negatively affect demand. Unemployment reduces the standard of living of the population, is a factor contributing to the growth of social tension in society, an increase in crime.

The state and the government regulate the level of unemployment, develop programs to ensure effective employment of the able-bodied population, eliminate the reasons for the existence of this phenomenon

For example, the state takes the following measures: limits the birth rate, the level of wages, spending on social needs of the population, the budget deficit, reduces the length of working hours, i.e. uses n policy of part-time employment, increases the discount interest rate; organizes a system of institutions in which workers who are temporarily not working undergo retraining and advanced training, develops programs to combat marginalism and crime, and so on.

Unemployment is related to inflation. English economist. O. Philips (50s of the XX century) discovered a non-linear relationship between the dynamics of nominal wages and the unemployment rate: an increase in the unemployment rate is accompanied by a decrease in the inflation rate and vice versa. Awareness of this dependence allows the state to choose a certain economic policy: either to increase wages and unemployment, or stable prices and wages in conditions of stabilization of the unemployment rate.

The dynamics of the unemployment rate in the current conditions of economic development in Ukraine has specific features: firstly, hidden unemployment prevails among the forms of unemployment, Thirdly, there are shifts in the socio-professional and gender and age structure of the unemployed (professional managers, youth.

Economic instability is also accompanied by inflationary processes