The contents

I Economic sciences.

1. Microeconomic.

2. Macroeconomic

II State regulations of economy.

1. Brief historical information.

2. Concept of state economic politics.

3. Subjects of state regulation of economy.

Four communication lines of economic interests with

By state economic politics.

1). Carriers of economic interests.

2). Expressers of economic interests.

3). The executors of economic interests.

4). The return communication line.

5). The questionnaire.

4. Objects of state regulation of economy.

1). State anticyclic politics.

2). State regulation of economy in area

Branch and territorial structure.

3). Accumulation of the capital.

4). Regulation of employment.

5). The money manipulation.

6). A condition of payment balance.

7). The prices.

5. General purpose of state regulation

Economy and tree of the purposes.

6. Means of state regulation of economy.

1). Administrative means.

2). Economic means.

3). The state budget.

4). The taxes.

5). Accelerated amortisation.

6). Public sector.

7). Means of the external economic regulation.

7. State economic programming.

1). Objects of the programs.

2). The usual and extreme programs.

3). The target programs.

4). The subjects of economic programming.

5). Borders of economic programming.

8. Mechanism of state regulation of economy

On an example of the prices.

1). The price right.

2). Supervision of the state over the prices.

3). Indirect influence of the state on the prices.

4). Direct state intervention in process of money appearing.

5). Influence state sector.

6). The contribution of public sector to process

Price control.

9. Inflation.

1). The reasons of occurrence of inflation.

a). Internal.

b). External.

2). Types of inflation.

a). Slow inflation.

b). Galloping inflation.

c). Hyperinflation.

3). Consequences of inflation.

a). Positive functions.

b). Negative consequences.

4). Management of inflation.

10. Unemployment.

1). The market of work.

2). Classification of the unemployed.

3). The formula of calculation of monthly average

Rate of unemployment.

4). The concepts treating a phenomenon of unemployment.

5). Directions of state regulation

Market of work.

6). Labour exchange.

11. Stages of state regulation of economy.

III Lists of the used literature.

“The People, who have never systematically learned the economic theory,
are similar to deaf persons, which try to estimate sounding an orchestra
”.

P. Samulson

There are fields of knowledge and vital experience, about which, it
seems any of us can judge. Except for politics, to such spheres concern
medicine and, certainly, economy. It is not casual, you see economy –
science is empirical, it connection with practice is direct. Each of us,
irrespective of preparation, collides daily with the economic phenomena.
We are all workers — create values or we raise the qualification, we
receive the incomes, we address to the market, we watch (keep up) the
prices, we are the consumers. The economy studies “homo economics” —
economic man, his actions and interests. Well as in medicine, where for
statement of the diagnosis it is necessary to know the functioning of a
healthy organism, first of all to understand the laws of functioning of
healthy economy.

The economic science is called to define how to use the limited
resources maximum effectively — natural stocks, capitals, labour
reserves. Like other branches of knowledge, the economy includes a set
of axioms and proofs, suitable for the analysis in any concrete
conditions. And in this narrow sense it can not be national, as well as
there can not be a American physics or German mathematics. The prices of
the goods everywhere are defined by a parity of a supply and demand,
with the growth of the income there is a reduction of its consumed part
and increase gathering.

But the economy has basic difference from exact and natural sciences: it
has business not with the separate man on a uninhabited island, but with
the member of a society subject to influence of traditions, national
mentality and political institutes. The toolkit of the economist has
therefore national specificity.

The science is formed approximately the same as the tree grows or the
building is constructed. The great economists of the past have put in
pawn the base, have created the theory named as microeconomy. As initial
item for the analysis a facilities of the businessman and farmer were
taken. The microeconomy studies the relation between the businessmen
(competition), businessmen and hired workers, sellers and buyers. It
formulates the laws: supplies and demand, rarity-decreasing income,
limiting productivity of work or capital. The microeconomy is directly
connected to enterprise activity, at the same time being a management
for business.

The economic theory created in 18 — 19 centuries is named classical, it
answered requirements of development of an industrial society based on a
private property and freedom of an economic choice. The creativity of
ingenious Adam Smite for economy is compared to the invention of a
wheel.

Gradually national economy is turning to complex systems of branches
forming a global economy. Periodically repeating economic crisises,
chronic — unemployment and inflation become a rule.

Business practice includes problems, which are not solved through
traditional means. The economists begin to be interested in questions of
general balance, cumulative demand, money manipulation.

The 20 centuries appeared to be a stage of macroeconomy. The large
system is not only set of small subsystems — firms and branches, but
also a new quality. Its actions are operated by other mechanisms.
Macrosystem can not be described by categories of microsystem (price,
profit, competition etc.). New techniques and tools here are necessary.

The Macroeconomic analysis becomes a basis of state politics,
development of the programs, selective (“dot”) methods of influence. But
macroeconomic is knowledge that works not far from business. You see
such formulas, as the return dependence between inflation and
unemployment in scale of a society, or between bank percent and rates of
growth of a total product, between growth of inflation and downturn of
the exchange rate of domestic currency is necessary to know, even to
expect changes of a conjuncture and probable general idea of government,
direction of state regulation of economy.

“ Most of all laws were created in vague times of republic… ”

The state regulation of economy has a long history. The practice here
outstrips the theory. During early capitalism in Europe there was a
centralised control above the prices, quality of the goods and services,
interest rates and foreign trade.

17 century – is a century of the pioneers of the normative economic
theory — wrote that only detailed management on the part of government
is capable to supply the order in economic sphere. They saw in a state
management a means of ensuring social validity.

With transition to capitalism and appearing of free competition, many
aspects of “pioneers” theory were destroyed. The approach of people who
based a classical economy (18 centuries), limiting state intervention in
economic life, has the historical explanation. You see in that period
economy was ruled by the market and freedom of a choice. In economic
sense freedom assumes two main components: the right, to a private
property protected by the law and independence of acceptance of the
decisions. In 18 — 19 centuries the economic role of the state was
reduced, basically, to protection of these primary rights. The XX
century was market by almost universal strengthening of economic
presence of the state.

From the second half of 19 century national manufacture has achieved
unprecedented scales. The end of the century is connected with
explosion, jump in scientific — technical development and appearance of
new branches. All these circumstance needed requirement for
co-ordination, for maintenance of proportions on macro-level, for
anticyclic regulation.

The amplification of state regulation was dictated by the purposes of
preparation to wars, their conducting, maintenance of war-protection.
The whole system of measures including compulsory movements system
(GERMANY), protectionism (Japan) was developed. The army-industrial
complexes closely connected to government were formed.

The state regulation of economy was necessary for realisation of social
politics, for general strategy socialisation in a broad sense.
Collective consumption or satisfaction of public requirements (public
health services, education, support deprived and others) are impossible
without use of state levers and organisations.

And, at last, it would be desirable to emphasise, meaning day today’s,
need for state support and sometimes organisations of fundamental
scientific researches, and also protection of environment.

The state regulation, thus, is caused by occurrence of new economic
needs, with which the market on the nature can not consult.

And, though the similar regulation in modern market economy is carried
out in much smaller scales, than in administrative — command system,
nevertheless here economic role of the state is great, is special in
comparison with the system of a free competition.

The state regulation of economy in conditions of a market economy
represents system of typical measures of legislative, executive and
supervising character which is carried out by competent official bodies
and public organisations with the purposes of stabilisation and the
adaptation existing socially — of economic system, and conditions.

In the process of development of a market economy the economic and
social problems became aggravated, they could not be solved
automatically on the basis of a private property. The necessity of the
significant investments, has appeared necessary for continuation of
reproduction in national scales; branch and social crises, mass
unemployment, the infringements in the money manipulation become
aggravated competition in the global markets required state economic
politics.

Theoretically concept state economic wider than concept of state
regulation of economy, as first can be based on a principle of
non-interference of the state in economic life (known principle of
economic liberalism laisser faire — laisser passer). In modern
conditions the non-interference of the state in socially — economic
processes is impossible. Disputes about necessity of state regulation of
economy, and about its scales, forms and intensity are conducted for a
long time. Therefore terms “ state regulation of economy ” and “ state
economic politics ” are presently identical.

The objective opportunity of state regulation occurs with the
achievement of the certain level of economic development, concentration
of manufacture and capital. The necessity of transforming this
opportunity into the validity consists in increase of problems,
difficulties.

In modern conditions the state regulation of economy is a component of
reproduction. It solves various tasks: for example, stimulation of
economic growth, regulation of employment, encouragement of progressive
shifts in branch and regional structure, support of export. The concrete
directions, forms, scales of state regulation of economy are defined by
character and acuteness of economic and social problems in this or that
country in the concrete period.

For understanding of the mechanism of state regulation of economy it is
expedient to characterise its subjects, objects, purposes, means, and
also stages of its development.

The subjects of economic politics are the carriers and executors of
economic interests.

The carriers of economic interests are social groups distinguished from
each other on a number of attributes: property, the incomes, on kinds of
activity at the similar incomes, on trades, branch and regional
interests. They are hired workers and owners of the enterprises, farmers
and land proprietors, businessmen managers and the shareholders, civil
servants etc. Each of these groups has interests caused by their social
economic rule, and also accessory to that or other region, kind of
activity.

The representatives of these groups individually express the interests
in mass media, on meetings and addressing with the requests, protests,
wishes to official bodies responsible for economic and social politics.

It is the first communication line of economic interests with the state
device regulating an economy.

The carriers of economic interests are incorporated in the advanced
countries of a market economy in numerous unions, association: it is
trade unions, unions of the businessmen, farmers, various dealers,
students, brokers and o. Item. Some of these unions total millions
members (trade unions, for example), others play a huge role in a
national economy because of the capitals, represented by them, (unions
of the businessmen, bank establishments, trade chambers). There are also
absolutely insignificant associations, for example, association of the
physical and legal persons interested in a privatisation of the concrete
ground area, belonging to municipality. Such associations are expressers
of economic interests.

Most powerful expressers of economic interests are unions of the
businessmen and trade unions. They carry out the own concepts of social
economic politics, aspiring to render the maximal influence on state
economic politics. At expressers of economic interests there are printed
editions, significant financial resources, centres of training of
personnel and public relations. The unions of the businessmen and trade
unions are constructed to a branch and territorial attribute, all local
and branch unions hierarchically are subordinated to the national
centres, which, in turn, enter into the international, regional and
global associations.

The recommendations, advises, memorandums, various channels of influence
these expressers of economic interests on bodies of state economic
regulation is the second communication line of economic interests with
state economic politics.

Expressers of social economic, political, religious, cultural,
ecological, specific regional interests are the political parties, which
frequently work under a banner of national interests.

To carry out in life the program of state economic politics there will
be a subject of state economic regulation — executors of economic
interests. It is the main, third line of transformation of
private-individual economic interests in state economic politics.

The executors of economic interests — subjects of state regulation of
economy — are the bodies of three branches of authorities constructed by
a hierarchical principal, and also central national bank. The tendency
of amplification of a role of the central bodies of authority among the
subjects of state economic regulation is appreciable more and more
independent becomes the executive bodies.

Interesting from the point of view of study of the mechanism of state
regulation of economy the merge of the subjects of state and private
economic politics and occurrence is as a result of it of new regulating
bodies which are not entered theoretically in the classical circuit of
parliamentary or presidential republic. For example, the body from the
representatives of unions of the businessmen, trade unions and executive
authority for regulation of the tariff agreements between the
businessmen and workers are created. The committees, advice on
maintenance or development of separate branches from the representatives
of the ministry of economy and branch unions of the businessmen are
organised. Similar advice is created for realisation of the state
regional programs. The basic part of such bodies formally carries out
advisory activity, but actually decisive image influence state economic
politics. Various advice of the experts concerns to such bodies at
government, ministries of economy, finance, social maintenance, their
separate management, central bank, governments of state iron roads, mail
and telegraph etc.

Other group of government-private regulation of economy is advice on
spheres of activity, for example, scientific and technical,
army-industrial, on regional politics, on internal waterways of the
messages, on vocational training. As against branch advice in them the
representatives of the most different branches, banks, various funds,
associations of the engineers, trade unions, public movements enter
alongside with the employees of governmental bodies and experts. Their
recommendations concern the basic orientation of state economic
politics, its directions of an expenditure of means from the budget and
various funds.

It is the fourth communication line between carriers of economic
interests and state regulation of economy: carriers (in this case
interested firms) – expressers (unions of the businessmen) – advice at
state regulating bodies. On this line there is an updating of interests
of a private enterprise to interest others social, professional, public
(for example, ecological) groups.

There are numerous opportunities of influence of carriers and expressers
of economic interests on state economic politics: through bodies of the
mass information, demonstration and manifestation, tax of the
signatures, manipulation in courts — from local up to international,
campaign of civil disobedience.

Feedback between state regulation of economy and carriers of economic
interests rather rigid.

First, the success of state regulation of economy is shown in rates of
growth, improvement of structure of economy, growth of employment,
healthy payment balance, decrease of rates of inflation, increase of a
vital level.

Secondly, the successes of state regulation of economy are reflected in
parameters which are not always given in to exact quantitative
measurement: in a level of social intensity (strike, demonstrations,
various performances), estimation of state regulation of economy by mass
media, condition of an environment, quality of life in cities.

Thirdly, carriers of economic interests are direct and through the
associations supported or do not support government. The loss of trust
of the voters and associations of economic interests to a ruling party
or parties is a main line of a feedback between state economic politics
and carriers of economic interests.

The bodies of state regulation of economy can not afford to find out
reaction of carriers of economic interests to a general orientation and
concrete measures of state economic politics during choices, to wait,
when the discontent by an economic situation starts. The extreme forms
(strike, flight of the capital). The operative information, whenever
possible authentic forecasts the behaviour of the economic subjects is
necessary to governmental bodies in case of realisation of this or that
measure of state regulation of economy. For this purpose there is a
fulfilled mechanism as biographical interrogations. Through a
biographical method the efficiency of toolkit budget, a special way of
regulation, influence of state purchases and orders, investments in
public sector are investigated. This method has turned out to be the
working tool of state regulation of economy ensuring a feedback between
regulating bodies and carriers of economic interests.

So, it was the ideal picture of dependence of state regulation of
economy from economic interests, mechanism of this dependence and
feedback. In real life weight of rejections from model — is observed
there is a struggle between separate groups of interests for influence
on bodies of regulation, a wide circulation has received these method,
the facts of corruption in bodies of state economic politics in the
various countries are known. But the mechanism of state regulation of
economy functions all the same not on rejections, but by rules.

The objects of state regulation of economy are spheres, branches,
regions, and also situations, phenomenon and condition of social
economic life of the country, where have arisen or there can be
difficulties, problems not permitted automatically or permitted in a
long-term future, while the removal of these problems urgently is
necessary for normal functioning of economy and maintenance of social
stability.

The basic objects of state regulation of economy is:

Business cycle;

Sectors, branch and regional structure of a economy;

Conditions of accumulation of the capital;

Employment;

The money reference(manipulation);

Payment balance;

The prices

Research also is skilled — design works having by the purpose
development and realisation of scientific ideas;

Conditions of a competition;

The social attitudes(relations), including the attitudes(relation)
between the employers and working on hiring, and also social
maintenance;

Preparation and retraining of the staff;

Environment;

Foreign economic relations.

Obviously, the transferred objects can carry completely various
character, they cover macroeconomic processes — economic cycle,
accumulation of the capital in scales of the country, separate branches,
territorial complexes and even the relation between the subjects – the
condition of a competition, the relations between trade unions and
associations of the businessmen, between state regulating bodies.

Let’s consider major of them.

The essence of state anticyclic politics, or regulation of an economic
conjuncture, is, that during crises and depressions should stimulate
demand for the goods and services, capital investments and employment.
For this purpose the additional financial privileges are given to the
private capital, the state charges and investments are increased. In
conditions of long and rough rise in a national economy there can be
dangerous phenomena – using of commodity stocks, growth of import and
deterioration of payment balance, excess of demand on a labour above the
offer and from here unreasonable growth of wages and prices. In such
situation, the task of state regulation of economy — to brake growth of
demand, capital investments and manufacture whenever possible to reduce
overproduction of the goods and less products of the capitals and, thus,
to reduce depth and duration of possible recession of manufacture,
investments and employment in the future.

The state regulation of economy in the field of branch and territorial
structure also is carried out through financial stimulus and state
capital investments, which provide privileged conditions to separate
branches and regions. In one cases the support appears to branches and
territorial units which are taking place in a condition of long crisis;
in others — the development of new branches and kinds of manufactures —
carriers of scientific and technical progress called to result to
progressive structural changes inside branches, between branches and in
all a national economy as a whole. The increase of its efficiency and
competitiveness is encouraged. At the same time can be the stopping of
excessive concentration of manufacture arranged on.

Major object of state economy regulation is the accumulation of the
capital. Manufacture, assignment and capitalisation of the profit always
serve an overall objective of economic activity in market economy,
therefore state economic politics of encouragement of accumulation first
of all corresponds to economic interests to the subjects of an economy.
Simultaneously state regulation of accumulation is also used to serve
also to other objects of state economy regulation. Creating additional
stimulus and opportunities in different time to all investors or their
separate groups on branches and territories the regulating bodies
influence a business cycle and structure.

The regulation of employment is maintenance normal from the point of
view of market economy of parity between a supply and demand of a
labour. Parity should satisfy requirement of economy for the qualified
and disciplined workers, which wages serve for them a sufficient
motivation to work. However parity between a supply and demand should
not conduct to excessive growth of wages, which can be reflected
negative in national competitiveness. The sharp decrease of employment
is undesirable also, it conducts to increase the army of the unemployed,
decrease of consumer demanded, tax receipts, growth of the charges on
the grants and, most important, it is dangerous by social consequences.

Constant object of attention of state regulating bodies is money
manipulation. The basic orientation of regulation of money manipulation
— struggle with inflation representing serious danger to economy. The
regulation of money manipulation influences and other objects —
condition of accumulation, price, social relations.

The condition of payment balance is an objective parameter of economic
health of the country. In all countries with a market economy the state
constantly carries out operative and strategic regulation of payment
balance by influence on export and import, movement of the capital,
increase and downturn of rates of national currencies, marketcontractual
politics and participation in the international economic integration.

One more of the main objects of regulation — price. Changes and
structure of the prices reflect a condition of economy. At the same time
prices strongly influence structure of economy, condition of capital
investments, stability of national currency, social atmosphere.

The state regulating instances aspire to influence and other objects of
state regulation of economy, for example, to interest private concerns
in development of scientific researches and introduction of their
results, in export of goods, capitals, both saved knowledge and
experience are studied and the laws on observance of rules of a
competition, social protection, protection of an environment are
improved.

The objects of state economy regulation of differ depending on a level
of tasks, solved by them. It is the following hierarchical levels: a
level of firm; region; branches; sectors of economy (industry,
agriculture, service); economy as a whole (economic cycle; the money
manipulation; the prices); global (social relations, ecology);
economic-political relations with foreign countries, integration
processes).

The general purpose of state regulation of economy is the economic and
social stability and strengthening existing building inside the country
and abroad, adaptation to its varied conditions.

From this general purpose the tree so-called of the concrete purposes is
distributed, without which realisation the general purpose can not be
achieved. These concrete purposes indissoluble are connected with
objects of state regulation of economy. The purpose — alignment of a
business cycle — is directed on the object, that is on a business cycle;
improvement of an environment — on an environment etc.

It is obvious, that the purposes, first, uncommon on importance and
scales and, secondly are in close interrelation. More often one purpose
can not be put and is achieved without dependence from others. For
example, it is impossible to present stimulation НИОКР without creation
of favourable conditions of accumulation of the capital, without
alignment of a conjuncture, perfection of branch structure of economy,
stable money manipulation.

The listed purposes partially block each other, one can appear
temporarily more important and to subordinate to herself others
depending on a real economic and social situation, level of
comprehension of this situation by the subjects of state regulation of
economy and from established by governmental bodies on the given
interval of time of system of priorities of the purposes. Any of the
above named purposes can serve, to promote or to interfere with
achievement of other purpose. The concrete purposes inside a tree of the
purposes can be primary, secondary, tertiary etc. For example, in
conditions of crisis the primary purpose becomes an exit from crisis in
narrow concrete sense — revival of a conjuncture. All other purposes
submit to it.

The means of state regulation are subdivided on administrative and
economic.

The administrative means are not connected with creation of additional
material stimulus or danger of financial damage. They are based on force
of state authority and include measures of an interdiction, sanction and
compulsion.

For example, the French authorities have forbidden to build the new
industrial enterprises within the limits of Parisian agglomerations, and
for achievement of this purpose they did not increase the taxes by the
new enterprises, have not entered rude the penalties, which could be
economic measures, and simply have stopped licensing for new industrial
construction.

Or, the government of the Netherlands has solved to use former naval
base as passenger and trade port, by creating, thus, new sphere of the
appendix of the capital. In result in area of port the economic activity
has increased.

The administrative means of regulation in the advanced countries with
market economy are used in insignificant scales. Their sphere of action
basically is limited to protection of an environment and creation of the
minimal household conditions rather poorly of socially protected layers
of the population. However in critical situations their role strongly
grows, for example, during war, emergency in economy. The most
large-scale administrative actions on regulation of economy in after War
period of Japan were currency reformed and made smaller of conducting
concerns.

The economic means of state regulation are subdivided into means of
money credit and budget politics.

The independent complex tool of state regulation of economy (and
simultaneously by its object) is the public sector in economy. The
maximum form of state regulation of economy is a state economic
programming covering the numerous purposes and all tooling of state
regulation of economy. About public sector and economic programming the
speech will go below.

The basic economic means are:

1) Regulation of the registration rate (discount politics which is
carried out by the central bank);

2) Establishment and change of the sizes of the minimal reserves,
which financial institutions of the country are obliged to keep in the
central bank;

3) Operation of official bodies in the market of valuable papers, such
as issue of the state obligations, trade by them and repayment.

Through these tools the state aspires to change a parity of a supply and
demand in the financial market (market of the loan capitals) in a
desirable direction. In process of relative decrease of a role of the
markets of the free capitals in financing capital investments and
especially in connection with reduction of a role of a share stock
exchange and growth of self-maintenance of the large companies by
financial assets the effectiveness of these tools in the most advanced
countries has weakened a little.

The direct state economic regulation is carried out by means of budget
politics. The state budget is an annual plan of the state charges and
sources of the incomes of their financial covering. The project of the
budget annually is discussed and is accepted by a legislative body —
parliament of the country, state or government by assembly. After the
end of financial the year the proxy representatives of the executive
authority report about the activity on mobilisation of the incomes and
realisation of the charges in conformity with accepted in the previous
year by the law on the budget.

The state budget always represents the compromise reflecting a parity of
forces of the basic groups of carriers of various social economic
interests. The charges of the state budget carry out functions of
political, social and economic regulation.

The first place in the budget charges is occupied with social clauses:
the special grants, education, public health services etc. In it the
overall objective of budget politics, as well as all state economic
politics in general — stabilisation, strengthening and adaptation
existing social economic building to varying conditions is shown. These
charges are called to soften differentiation of social groups, it is
inevitable peculiar to market character.

In expenses for economic needs the budget grants to agriculture are
usually allocated. Any state can not be interested in ruin the
peasantry, farmers. And though in the external economic politics of
government sometimes temporarily endow interests of the domestic
manufacturers of the agrarian goods, supposing foreign agricultural
production on a home market in reply to concession of the trade
partners, as a rule governments support average and large farmers land.

The charges on arms and material maintenance of external politics, and
also administrative charge influence demand for consumer goods and
services.

To the tactical purposes of budget regulation the charges on an internal
state duty (for example, prescheduled repayment of a part of the debt),
sizes of the charges on the credits both grants to the private and state
enterprises, agriculture, on creation and perfection of objects of an
infrastructure, on purchase of arms and military construction serve.

The sizes of these charges essentially influence scales of demand and
size of the investments. During crises and depressions the charges of
the state budget on the economic purposes, as a rule, grow, and in time
when of slowing conjuncture — are reduced.

The charges on crediting of export, insurance of the export credits and
taken out capital financed from the budget, stimulate export and in the
long-term plan improve payment balance, open for a national economy the
new foreign markets, promote strengthening of national currency,
maintenance of deliveries on a home market of the necessary goods
because of a boundary. It is the external economic aspect of politics of
the budget charges.

The effectiveness of state regulation of economy with the help of the
budget charges depends, first, on the relative sizes of the spent sums;
secondly, from structure of these charges; thirdly, from efficiency of
use of each unit of spent means.

The main tools of mobilisation of financial assets for a covering of the
state charges are the taxes. They also are widely used for influence on
activity of the subjects of economy. It is a special role of the taxes.
But main role of the taxes — regulating. The state regulation through
the taxes depends in a decisive degree on a choice of tax system, and
also from kinds and sizes of tax privileges.

The taxes in state regulation of economy play a double role: on the one
hand, it is the main source of financing of the state charges, the
material basis of budget politics, on the other hand, is the tool of
regulation. A task of state budget bodies — not simply to impose with
the taxes those or other sources of receipt of means and to create the
adjusted mechanism of influence on economic behaviour of the legal and
physical persons is thin. For this purpose temporarily or selectively
given tax discounts, delay of payment of the taxes are used.

The special place among means of state regulation of economy which is
carried out through the taxes, plays accelerated amortisation of a fixed
capital and connected with it(him) formation(education) and realisation
of the latent reserves carried out within the framework of the sanctions
of the ministries of the finance.

Accelerated amortisation of a fixed capital in modern conditions is by
the main means of stimulation of accumulation, structural changes in
economy and important tool of influence on an economic cycle — the
employment. Essence it in a separation of physical process amortisation
of machines, equipment, buildings and structures from the production
costs of carry of cost of material carriers of a fixed capital on the
made goods and services. Changing the rates and order amortisation, the
state regulating bodies determine that part of the clean profit, which
can be released from the taxes by inclusion in production costs and then
is listed in amortisation fund for financing in the further new capital
investments.

At check of correctness of payment of the tax from the profit the tax
inspectors agree with accounting of production costs or services only if
the amortisation deductions were made in conformity with norms solved by
the ministry of the finance. The size of the balance profit, rate and
size of the tax, and also paid dividends depends on it.

The variation of norms accelerated amortisation of a fixed capital is
widely used in all advanced countries as a means of state tactical and
structural politics, and also for stimulation of scientific researches
and introduction of their results, for financing nature protection of
measures. The effect of a variation of norms of amortisation deductions
is swept up within a favourable conjuncture, i.e. in the periods of
slowing and crises the effectiveness of amortisation politics weakens.
The worse conjuncture, the more difficult & is to realise profit, it is
less than opportunities for self-financing, and the amortisation
privileges given by the state, become less attractive stimulus for the
private investments. The privileges on accelerated amortisation are
equivalent to reduction of receipts from the taxes from profits in the
state budget. Result can be increase of other taxes or growth state
duty.

The state capital investments are carried out substantially in public
sector of economy playing a major role in state regulation of economy.
It is simultaneously object and tool of influence on a private
enterprise.

The public sector represents a complex of economic objects, wholly or
partially belonging to the central and local state bodies. The public
sector existed in many countries long before development of capitalism,
including mail, partially transport service, manufacturing of the weapon
etc. On a measure forming systems of state regulation of economy the
state built, redeemed at the private proprietors economic objects,
mainly in sphere of an infrastructure, heavy industry, which functioning
was always favourably and it necessary for a national economy, but not
always it is favourable from the point of view of the private capital.

In one country the public sector has arisen basically as a result of
nationalisation of a number of branches and enterprises (in France,
Italy, Great Britain, Austria), in others the state built or got ruined
economic objects (in USA, Sweden, Japan). In the first group of the
countries the share of public sector in national riches is higher, than
in second.

Significant parts of public sector are objects of an infrastructure, in
the majority unprofitable. Other part — the state enterprises in raw and
power branches, where are required the large investments, and turnover
of the capital slow. Profitability of state-owned firms, as a rule,
below, than private. A part of public sector is packages of the actions
of the mixed private-state companies.

The existence in conditions of a market economy of sectors, which in the
activity are guided by principles a little bit distinguished from
principles of private concerns, allows using public sector for the
decision of nation-wide economic tasks, increasing money of a private
enterprise.

The exclusive profit, and frequently and profit in general, is not the
paramount purpose of activity of public sector in an infrastructure,
power, raw branches, НИОКР, in preparation and retraining of the staff,
in the field of protection of an environment, as high profits nobody
requires of these spheres, and the losses become covered from the
budget. Therefore public sector has become the supplier of cheap
services (in particular, transport, mail-telegraphic), electric power
and raw material, reducing, thus, costs in private sector.

The public sector as a means of state regulation of economy is actively
used. So, in conditions of deterioration of a conjuncture, the
depressions or crisis, when the private capital investments are reduced,
investment in public sector, as a rule, grow. Thus, the governmental
bodies aspire to counteract recession of manufacture and growth of
unemployment. The public sector plays an appreciable role in state
structural politics. The state creates new objects or expands and
reconstructs old in those spheres of activity, branches or regions,
where the private capital connected it is not enough. So, the public
sector plays a huge role in economy, preparation and retraining of the
staff. The state-owned firms are engaged also in foreign trade, export
of the capital abroad, frequently acting by the pioneers in introduction
of the national capital in any country (for example, participation of
the German concern “ Volkswagen ”, federal taking place in property
federal and ground governments, in motor industry of Czech).

In the whole public sector serves addition of a private enterprise there
and such measure, where and as far as the motivation for the private
capital appears insufficient. In result the public sector serves to
increase of efficiency of a national economy as a whole and is one of
tools of redistribution of a total internal product (the сomplete
internal product is a cumulative cost of production of sphere of
material manufacture and spheres of services, irrespective of a national
accessory of the enterprises located in territory of the given country).

The sizes of public sector, its share in national economy, change not
only as a result of new construction and purchase, but also as a
consequence of a privatisation — sale profitable, reconstructed objects
of public sector to the private capital. In 80-th and 90-th years this
tendency appreciably has amplified.

Alongside with the listed tools of state regulation of economy having
internal economy the orientation, exists an arsenal of means of the
external economic regulation.

Practically all levers of influence on process of reproduction inside
the country render essential influence on foreign economic relations:
change of the registration rate, taxation new privileges and grants on
the investment in a fixed capital etc.

However there are also special tools of direct influence on economic
communications with abroad. It, first of all, measure of stimulation of
export of goods, services, capitals, scientific and technical and
administrative experience: crediting of export, warranting of the export
credits and investments abroad, introduction or cancellation of
quantitative restrictions, change of the duty in foreign trade; measures
on attraction or restriction of access of the foreign capital in a
national economy, change of conditions of its functioning, qualitative
selection (from the point of view of a branch orientation and
technological level) acting from abroad capital, attraction in the
country of a foreign labour, participation in the international economic
organisations, integration state associations.

The separate tools of state economic politics can be used in the various
purposes, in various combinations and with different intensity.
Depending on character of the purposes the place of that or other tool
in an arsenal of means of state regulation of economy in the concrete
period will vary.

The maximum form of state regulation of economy is the state economic
programming. Its task — complex use in the global purposes of all
elements of state regulation of economy.

In process of complication of tasks on regulation of economy of
government of steel to formulate short-term, intermediate term and
long-term tasks to determine the order of their decision and bodies
responsible for performance of these decisions, to allocate necessary
means and to determine the order of financing.

Objects of such target programs usually are the branches (in particular,
agriculture); regions; social sphere (for example, social economic
adaptation settlers, maintenance by their work and habitation); various
directions of scientific researches.

The programs are usual and extreme. The usual intermediate term programs
are made, as a rule, for five years with annual updating and
prolongation for one year (sliding programming). The extreme programs
are developed in critical situations, for example, in conditions of
crisis, mass unemployment dangerous inflation; they, as a rule,
short-term. In toolkits of their realisation the appreciable place is
occupied with means of administrative regulation.

The level of development of state programming in the separate countries
is various. Practically in all countries of market economy the target
programs are carried out. One of oldest — regional-power target program
on development of pool of the river Tennessee in USA, program of
development of nuclear power in France, economic development of the
south of Italy.

The national extreme programs on restoration of economy of Southern
Korea after war, on structural reorganisation and privatisation of new
grounds (East Germany) after connection of GDR to Germany are known.

In a citadel of a market economy — USA — the national programming is not
present, but widely target and extreme programs are applied. Obviously,
the distinctions in a degree of development of programming in the
separate countries depend on character and scales of tasks, which
economic and social situation put before the state.

The subjects of economic programming — official bodies responsible for
drawing up of the programs, their direct realisation and control above
them. The programs are developed by a special state body (for example,
Комиссариатом on planning in France), and if it is not present, by the
ministries of economy and finance or special ministry system. Thus the
ministry of economy, as a rule, prepares the project of the program,
formulates hierarchy of the purposes, terms and sequence of realisation
of separate measures, names instances which are bearing responsibility
for performance.

The ministry of the finance develops the plan of financing of the
program. The representatives of the central bank, unions of the
businessmen, commercial and industrial chambers, trade unions are widely
involved in development of the programs, the various commissions and
advice of the experts are created.

The program and financial plan annually (in connection with a sliding
principle of prolongation) affirm by parliament, also of time per one
year the reports on their performance are heard.

The state economic programming has appeared rather effective at the
decision of a number of economic and social tasks, however this
efficiency has objective borders. In conditions of market economy the
programming can be only indicative, that is to carry target-stimulating
character. Nevertheless, it has appeared a rather effective means of the
decision of tasks of a different level; if the state programs frequently
also were not realised completely, all of them — provided social
economic development in a desirable direction. That circumstance is not
less important also, that the programming allows systematically using
all means of state regulation of economy, to avoid discrepancy and
inconsistency of regulating measures of separate official bodies.

State financial stimulation, orders and the purchases within the
framework of the economic programs render appreciable and non-uniform
influence on competitiveness of the separate companies, situation of
branches, regions, of social groups and cause resistance what interests
have appeared restrained. On state programming systems therefore
constantly there is a versatile influence reflecting inconsistent
interests of separate groups, public forces, political groups.

Let’s consider the mechanism of state regulation on an example of
politics of the prices.

Contrary to widespread at many to opinion, that in the countries of
market economy money appearing occurs spontaneously, actually prices are
object of constant attention and regulation on the part of the state.
The prices are one of critical points economic and social — political
life, where the group interests of the manufacturers and consumers,
wholesale and retail dealers, trade unions and unions of the
businessmen, exporters and importers collide. The prices mention
interests everyone and, naturally, around of them there is a struggle in
parties and parliaments, in government and on negotiation of the social
partners, at the international meetings.

The influence on the prices serves to the global purposes of state
regulation of economy, purposes of tactical and structural politics,
struggle with inflation, amplification of national competitiveness in
the world markets and mitigation of social intensity. The influence of
state economic politics on other objects of regulation, in turn, is
reflected in processes of formation of the prices.

The concrete actions in the field of the prices can have short-term or
even the emergency purposes, which can in the given concrete moment not
coincide with other purposes, but at the end they always serve of the
general purpose of state regulation — optimisation of rates both
proportions of economic development and stabilisation of social system

The classical political economy examined the prices, freely developing
in the market, as the main element of the mechanism of maintenance of
balance between a supply and demand. However actually of ideal general
and complete freedom money appearing never was. All question in a degree
and forms of restriction of free game of the prices. Even if to abstract
from opportunities of arrangement of the manufacturers and sellers,
during all history of capitalism it is possible to look after influence
of the state on the prices.

The tariffs for services of state iron roads, mail, telegraph, sale of
the foodstuffs from state stocks per poor harvest years, customs
politics and indirect taxation essential image influencing on the
internal price, — here the not complete list of measures of state price
control for last 100 — 150 years.

The first world war which has begun after it depression and crisis, have
served as the moment of changes in a history of state price control. K.
Muller wrote in this occasion, that the political and economic shocks in
the state and society have caused comprehension that in interests of the
best functioning of a economy, more uniform distribution and avoidance
of danger of revolutionary revolution it would be expedient, that the
state has undertaken care of regulation of economic process and
maintenance of the fair prices.

Attempts to adjust the prices in conditions of inflation and crisis by
the foreign trade politics have appeared insolvent. To middle of the
30-th years in many advanced countries with market economy the laws
giving to the state powers on influence on the prices, down to their
freezing were accepted, and the state measures on influence on the
prices become a component of state regulation of economy.

The state measures on price control can carry legislative,
administrative and judicial character. The laws, accepted by
parliaments, create a legal basis of the relations between the economic
subjects, and also between them and state in sphere money appearing. The
complex of these laws represents the price right entering by a component
into civil law. On the basis of this right the authorised state bodies
carry out administrative activity on price control. In case of
infringement of the laws guilty can be involved in the judicial
responsibility.

Party fractions independent deputies bring in the administration bills
of the prices, as well as on other economic questions, to parliaments or
government, is direct measures on price control carry out the ministries
of economy, finance and central bank. In a number of the countries there
are ministries of trade, agriculture. They also render influence on
money appearing. In many countries at the end of 60 — in the 70-th years
ministry advice under the prices was created, they have is observant —
consultative functions.

In each country at government or its separate bodies there are expert
committees, where the known experts, and advice, in which they meeting
the representatives of trade unions, unions of the peasants, dealers,
businessmen and representatives of state bodies enter; the committees
are called to advise state bodies on the prices and to express the
opinion concerning the price administration bills.

Let’s consider state price control in a historical and logic sequence.

The supervision over the prices is the primary form of state activity in
this area. The business not only that from it began state price control;
now supervision over the prices forms the basis, on which all state
actions in this area are based. In supervision over the prices the
central statistical managements are engaged. The independent researches
of movement of the prices frequently will carry out the research centres
of trade unions special commissions under orders of a management of
parties, international organisations.

Overall objective of supervision behind the prices on the part of state
bodies and social partners — change of growth of cost of life for
definition of an index of annual nominal increase of wages and pensions,
and also for finding — out of influence of a rise in prices on
production costs and national competitiveness. The state can affect the
prices, entering or cancelling quantitative and customs restrictions in
foreign trade, entering in integration unions, changing the registration
rate, varying the taxes, carrying out a currency issue etc. The indirect
influence on the prices is rendered, in essence, by(with) all state
regulating actions(shares), with what the purposes they did not serve.

The state intervention in process money appearing is carried out by the
overestimate, authorised by governmental bodies, of production costs
through inclusion in the cost price overestimated amortisation and
deductions in other funds. As a result of it in the whole branches there
is a situation, when “ the costs prop up the price ”, i.e. settlement
(instead of valid) the production costs appear at all enterprises of
branch as a result of the privileges, announced by government, are so
high, that the increase of the prices becomes itself by the understood
phenomenon, and as the privileges are distributed to all branch,
internal branches the competition in conditions of a favourable
conjuncture can not be a sufficient obstacle for a rise in prices.

Direct state intervention in process money appearing is the state
politics of an establishment of the prices on the so-called excise
goods.

The direct influence on formation of the prices is rendered with the
state grants. One of kinds of such grants — price — provides decrease of
the prices by special surcharges to the manufacturer or consumer.

The direct influence on the prices and leadership in the prices has a
place in branches, where the share of the state in consumption of the
goods and services is significant, for example, in military industries,
in a number down-branches of construction. The governmental bodies,
being by the constant buyers or customers of the certain kinds of the
goods and services at private concerns, establish under the arrangement
with the partners “ the concrete prices ”, which become then base prices
for branch.

Effective means of price control is the tax to additional cost. This tax
the manufacturers include in the price of the goods or service, and
difference of change of the rates of this tax directly influences the
prices.

The special direction of state economic politics is the state influence
on the foreign trade prices. State encouragement of export, clearing of
the exporters of the taxes (return of the taxes), and in some countries
— the export grants, granting of the soft loans and transport tariffs by
an essential image are reflected in conditions of a price competition in
the world market.

Establishment of the prices on mineral raw material extracted in state
mines, on the electric power from state power stations and railway,
mail-telegraphic tariffs — example of fixing of the prices on the goods
and services state sector.

These is artificial undercharges and the tariffs promote decrease of
production costs in a private enterprise and increase of national
competitiveness for the account is artificial of the lowered
profitability or deficiency of these objects of a state ownership.

Fixing of the prices or establishment of limits of their increase in
public sector — typical means of administrative economic regulation. It
is applied seldom and, as a rule, in conditions of a market economy is
inefficient in long-term and even intermediate term aspect. Is used more
often in exclusive cases as a means of easing of social intensity.

National bodies carry out the control above the prices for the certain
kinds of the goods.

Examples can serve an establishment of the prices on coal and black
metals by the European association of steel, annual establishment of
procurement prices on agricultural products in the European union,
participation of the countries in the international conferences,
organisations on separate kinds of the goods, tariffs for an airline
traffic.

One of difficulty of questions of economic politics is the management of
inflation. In the world there are not enough of countries, where in
second half 20 centuries there was no inflation. It as though has come
on change of former illness of market economy, which has become
obviously to weaken, — cyclic crises.

The inflation is a depreciation of money, decrease of their buying
power. Usually inflation has in the basis not one, and some
interconnected reasons, and are shown it not only in increase of the
prices — alongside with open, by price inflation has a place latent, or
suppressed, inflation shown first of all in deficiency, deterioration of
quality of the goods. In literal translation with the Latin inflation
means “swelling”, i.e. overflow of channels of the manipulation by the
superfluous paper money which has been not supplied with the appropriate
growth of commodity weight.

The reasons of inflation are diverse. Usually in a basis of inflation
the discrepancy of money demand and commodity weight — demand for the
goods lays and services exceeds the sizes goods turnover, that creates
conditions that the manufacturers and suppliers lifted the prices
irrespective of a level of costs. A disproportion between a supply and
demand, excess of the incomes above the consumer charges can be deviated
by deficiency budjet (charges of the state exceed the incomes); by
excessive investment (volume of the investments exceeds opportunities of
economy); by outstripping growth of wages in comparison with growth of
manufacture and increase of productivity of work; by an any
establishment of state-set prices causing skews in size and structure of
demand; by other factors.

Let’s refer as an example to a sharp aggravation of deficiency state
budjet in Russia in second half of 80-th years (1985-1989 years — break
between profitable and account parts of the state budget has grown, with
18 up to 120 billion rub., or from 3,5 % up to 19 % to the national
income of the country). The increased deficiency has put huge harm to
the money manipulation, has urged on inflation. The unjustified money
payments sharply have worsened a situation in the consumer market.

The reasons of occurrence of inflation can be both internal, and
external. To the external reasons concern, in particular, reduction of
receipts from foreign trade, negative results of the foreign trade and
payment balances. The inflationary process in Russia strengthened fall
of the prices in the global market on fuel and colour metals making
important clause of our export, and also adverse conjuncture in the
grain market in conditions of significant import grain. In Hungary,
which economy in the greater measure depends on a condition of foreign
economic relations, just the external factor (deterioration of
conditions of international trade, increase of the external debt) played
a hardly probable not determining role in amplification inflationary
processes. Thus the politics of escalating of export and restraint of
import reduced growth internal, wholesale and consumer costs.

The inflationary rise in prices alongside with the marked factors is
caused by the deeper reasons having basic character. Let’s consider on
an example of Russia.

First, as a rule, one of sources of inflationary processes the
deformation of economic structure expressing in essential backlog of
branches of consumer sector at obvious super-changed development of
branches of heavy industry serves and is especial of military mechanical
engineering.

Secondly, inability to overcome inflation is deviated by lacks of an
economic mechanism. In conditions of the centralised economy practically
there was no feedback, there were no effective economic levers, which
were capable to adjust a parity between money and commodity weight; as
to administrative terminators, they “worked” insufficiently effectively.
In system of financial planning a determining role played state plan,
instead of Ministry of finance and not the State Bank, which “worked”
under it, supporting the scheduled tasks financial and money resources
without any restrictions.

Becoming traditional the politics of high rates of economic development
ignored real resource opportunities. To support rates, the capital
investments were constantly increased. In result the growth of
consumption restrained; the efficiency of capital investments fell that
negatively had an effect for economic growth and current manufacture.
The means for new technology did not suffice, and continuous growing of
fund of accumulation did not give desirable result. A problem died any
more in amount of a capital investment, and in their efficiency,
structure to reconstruct which economic mechanism prevented.

The contradiction and deficiencies deleted there are more means, and the
financial and budget terminators were very weak or practically were
absent. Unbalanced took place not only in the consumer market. Its basis
— increasing disproportion in the manufacture, strengthening financially
— financial not of balance, defects in system of planning, in the
mechanism of the money manipulation, in absence of antiinflationary
regulation.

Examining the reasons of inflation, the economists will carry out
distinction between two its kinds — “ by inflation of the buyers “
(inflation of demand) and “ by inflation of the sellers “ (inflation of
costs). In effect, it is two, as a rule, interconnected, but
unequivalent reasons of inflation: one lays on the part of demand
(surplus of money resources at the buyers), another — on the part of the
offer (growth of industrial costs).

Depending on character of inflation and rates of increase of
inflationary processes distinguish the following types of inflation:

1) Slow inflation, for which the rather low rates of a rise in prices,
approximately up to ten or several percents per one year are
characteristic. Such inflation is inherent in the majority of the
countries with the advanced market economy, and it is not represented by
something unusual. The average level of inflation on the countries of
the European community has made for last years about 3 — 3,5%.

2) Galloping inflation is difficult in ruling.

The rate of its growth is expressed usually in two-place figures. Such
high rates in the 80-th years were observed, for example, in many
countries of Latin America, some countries of Southern Asia. The
galloping rise in prices shows itself unequally and has not the strictly
designated quantitative parameters. The inflationary processes depend on
a level of development of the country, social economic structure
unsimilar regulation of price processes. In the period after war — the
period of capitalism has gone through two large waves of inflation: at
transition from military economy of a market type (1945-1952) and under
influence “ of petroleum shocks ”, is sharp shocked all structure of the
world and internal prices (1974-1981). But it was possible to western
countries to stop inflationary processes, using various methods of
antiinflationary regulation. For the small countries, for example of
Sweden, it was important to avoid imported inflation, for what the
increase of the prices of national currency was used. Other countries
resorted to methods of restraint of inflation by means of money-credit
politics.

3) The greatest danger represents super-inflation. Its conditional
boundary — monthly (within three-four months) rise in prices more than
50%, and annual will be expressed four numbers in figures. The feature
super-inflation that it appears practically unguided; the usual
functional interrelations and habitual levers of management of the
prices do not work. On complete power the printed machine tool works,
the gamble develops mad. Manufacture will be disorganised. To stop or to
brake super-inflation it is necessary to resort to extreme measures. But
there is no unequivocal representation about that, how to struggle with
super-inflation. The rather inconsistent recipes are assumed various,
quite often.

To outstrip inevitable, increase, expected by all, of the prices, the
owners of “hot” money aspire as soon as possible gets rid of them. In
result is developed great demand; those goods are bought up first of all
which can serve a means of partial preservation of the savings (real
estate, subjects of art, precious metals). The people work under
pressure “inflationary crisis ”, and it grow a rise in prices, and the
inflation begins to feed itself.

Classical example super-inflation — conditions which has been usual in
Germany and a number of other countries after the First World War. In
Germany in 1923 the level of a rise in prices was estimated 10 numbers
and 12 numbers by numbers; the wages should be spent immediately, for
within day of the price on products raised repeatedly.

The process of inflation is inconsistent. On the one hand, the money
profits are increased, the capital investments extend, and with another
— the rise in prices conducts to depreciation of the unused capital. Win
not everything, and, first of all strong firms having the modern
equipment, perfect organisation of manufacture. In the best
rule(situation) there are social groups living on the not fixed incomes,
if their nominal incomes will grow by rate overtaking a rise in prices.

From inflation the people taken money on credit can win, if not is
stipulated, that percent for the credit should take into account an
inflationary rise in prices.

But whichever there were positive functions of inflation, leaving from
under the control and even remaining rather weak, adjusted, the
inflation renders on a course of economic development the whole complex
especially of negative phenomena.

To negative consequences of inflationary processes concern:

— Decrease of the real incomes of the population;

— Depreciation of the savings of the population (the increase of
percents on the contributions, as a rule, does not compensate fall of
the real sizes of the savings);

— The loss at the manufacturers of interest in creation of the
qualitative goods (is increased release of the goods of poor quality,
manufacture of the rather cheap goods) is reduced;

— Restriction of sale of agricultural products in city by the rural
manufacturers by virtue of fall of interest, in expectation of increase
of the prices on the foodstuffs;

— Deterioration of conditions of life mainly at the representatives of
social groups with the firm incomes (pensioners serving, students, which
incomes are formed for the account state budget);

— Easing positions of imperious structures (is reduced trust to the
programs and measures planned and carried out government).

The management of inflation represents a major problem money-credit and
in the whole economic politics. The ways of management are ambiguous,
are inconsistent on the consequences. The range of parameters for
realisation of such politics can be rather narrow: on the one hand, it
is required to constrain growth of an inflationary spiral, and with
another — to support stimulus of manufacture to create conditions for
saturation of the market by the goods.

The management of inflation assumes use of the complex measures
assisting in a certain measure to combine an insignificant rise in
prices with stabilisation of the incomes. The tools of management of
process differ depending on character and rate of inflation, features of
economic conditions, specificity of an economic mechanism of the
different countries.

For antiinflationary regulation two are used such as economic politics:

1) Politics directed on reduction of budget deficiency, restriction of
credit expansion, restraint of money issue. In conformity with material
the recipes apply targets — regulation of rate of a gain of money weight
in the certain limits — according to rate of growth of a total national
product

2) Politics of price control and incomes having by the purpose to
co-ordinate growth of earnings with a rise in prices. One of means
serves index of the incomes determined by a level of a minimum
conditions of life or a standard consumer basket and connected with
dynamics of an index of the prices. For restraint of the undesirable
phenomena the limits of increase or freezing of wages can be
established, to be limited distribution of the credits etc.

The influence on inflationary process in conditions of a sharp rise in
prices requires special measures. So, for elimination of consequences “
of a petroleum shock ”, struck on economy of USA in second half of 70-th
years, the registration rates were increased, the requirements to the
sizes of reserve funds are amplified, the system of the taxation is
stipulated. To lower rates of an inflationary rise in prices it was
possible not at once: from 13-14 of % in 1979 they have decreased to 4 %
after about three years — in 1982.

As the experience testifies, to stop inflation with the help of one
organisational measures rather difficulty if not to tell it is
impossible. The structural reform directed on overcoming of
disproportion’s, that has arisen in economy is necessary for this
purpose.

The concrete methods of restraint of inflation, “dose” and sequence of
application of means, attracted for treatment, depend on statement of
the correct diagnosis. To put the diagnosis — means, to determine
character of inflation, to allocate the factors, basic and connected to
them, which makes the growth of inflationary processes. In this case it
is not necessary to expect for any ready circuits, and series of extreme
measures to finish with inflation. Each inflation is specific and
assumes application of such recipes, which correspond to character and
depth of “disease”.

Constant consequence in particular of inflationary process is the
unemployment. By virtue of importance of this problem the state accepts
the special measures for regulation of the market of work.

The market of work (labour) — important sphere economic and social —
political life of a society. In the market of work receives an
estimation cost of a labour, the conditions of its employment, including
size of wages, working conditions, opportunity of reception of
education, professional growth, guarantee of employment etc are defined.
The market of work reflects the basic tendencies in changes of
employment, its(her) basic structures (branch, vocational, demographic),
i.e. in a public division of labour, mobility of a labour, scales and
changes of unemployment.

The unemployment is a social economic phenomenon, at which the part of a
labour (economically of active population) is not engaged in manufacture
of the goods and services. The unemployed alongside with engaged form a
labour of the country. In real economic life the unemployment acts as
excess of a labour above demand for it(her). To the unemployed,
according to statistics of many advanced countries, the persons who have
been not engaged on the moment of realisation of interrogation about the
status of their employment, undertaking attempts concern to find work
within the previous four weeks and registered on labour exchange.

Heavy for the countries of West were 30 years of our century. In USA the
rate of unemployment has reached 25%. The diagram showing of dynamics of
a rate of unemployment in USA for 100 years is rather curious
(1890-1990).

If the share of the unemployed makes 1-3 % in general army of work, not
it is accepted to count employment insignificant. Especially dangerous
in social sense not employment (absence of work within 40 weeks and
more) is long chronic.

It is important to emphasise, that to the unemployed usually carry not
only dismissed on the various reasons, but also persons voluntary left
works and undertaking attempt to find new. The structure of unemployment
for its reasons includes four basic categories of a labour:

1) Lost work as a result of dismissal;

2) Voluntary left work;

3) Come on the market of work after a break;

4) For the first time come on the market of work.

The parity of these categories depends, first of all, on a phase of a
business cycle.

The monthly average rate of unemployment within the given year pays off
under the formula:

UE*100 of %

Lue = ——————

LFc,

Where Lue — level (norm) of unemployment, %; UE — monthly average number
of the unemployed; LFc — number of a civil labour.

There are some concepts treating a phenomenon of unemployment. In Mark’s
of the theory it usually connect to process of accumulation of the
capital, at which the requirement for alive work (variable capital) is
increased slower, than in machines, equipment (constant capital). In
western economic science the point of view dominates, according to which
the unemployment in the basis reflects an economic feasibility of use of
resources, just as, say degree of loading of capacities reflects
expediency and efficiency of use of a fixed capital. About it speaks a
so-called natural rate of unemployment reflecting structural
disproportion in the market of work (between structure of a supply and
demand of a labour on qualification, by demographic and other criteria).
To natural unemployment carry also so-called friction unemployment
connected mainly to voluntary transition of the workers from one work on
another and to seasonal fluctuations in demand for a labour.

In USA in the 60-th years as a natural rate of unemployment the
parameter in 4,3 %, in 70-th — already 6,6 %, in 80-th — about 7% was
considered. The excess of unemployment above a natural level is
determined in the basic cyclic factor, i.e. condition of a conjuncture
in the country.

Changes of unemployment is influenced, besides demographic factors,
with changes in structure of economy, condition of foreign trade and
export of the capital, scales of the military charges, economic and
social politics of the state.

Owing to variety of internal regulators of the market of a labour, and
also by virtue of social importance of its effective functioning the
market of work requires the qualified regulation.

It is possible to allocate four basic directions of state regulation of
the market of work. First, it is the programs on stimulation of growth
of employment and increase of number of workplaces in public sector,
secondly, programs directed on preparation and retraining of a labour,
and, thirdly, program of assistance to hiring of a labour. Besides the
government accepts the programs on social insurance of unemployment,
i.e. allocates means for the grants with the unemployed.

Within the framework of this program in USA, for example, in after war
period -the period were created hundred thousand workplaces in public
sector (in sphere of public services — education, health services,
municipal services, and also in construction of public buildings and
structures and in remaking works). With the help of these programs the
rate of unemployment at the end of the 70-th years was artificial is
underestimated on 0,8 percentage items.

The more and more important meaning gets state assistance to hiring. So,
service of giving jobs in USA having more of 2500 local agencies (labour
exchanges), is engaged in registration of the unemployed, tries to find
by it vacancies, will carry out testing the applicants for work for
definition of their qualification.

The listed directions do not settle all measures of influence of the
state on the market of work. Alongside with them there is a complex of
measures of indirect regulation of a labour: tax, money-credit and
amortisation politics of government. Besides the considerable influence
on the market of work renders also legislation — about social
maintenance, about the labour relations, about the equal civil rights
etc.

The measures of indirect regulation of the market of a labour
simultaneously are also measures economic of regulation and influence a
conjuncture in the country.

The special place in system of regulation of the market of work is
occupied with labour exchange (service of employment, service to
assistance to hiring), being one of the important structures of a market
economic mechanism. It represents special establishment, which is
carrying out intermediary functions in the market of a labour. In the
majority of the countries of labour exchange are state and carry out the
activity under the direction of the ministry of work or body, similar to
it(him). At the same time in the market of work alongside with state
services of employment the large number of private intermediate firms
functions, the efficiency of which activity is very high.

The basic directions of activity of labour exchanges are:

1) Registration of the unemployed;

2) Registration of vacant places;

3) Giving jobs to the unemployed and other persons wishing to get a job;

4) Study of a conjuncture of the market of work and granting of the
information about it(her);

5) Testing the persons wishing to offer work;

6) Professional orientation and professional retraining of the
unemployed;

7) Payment of the grants.

The majority of the economists believe, that the problem of unemployment
and other disproportion in the market of work can be softened only with
the help of a combination of various means — stimulation of economic
growth, reduction of working week, creation of an effective system of
retraining of the staff.

Thus, the modern state regulation of the market of work represents a
complex of economic, administrative, organisational and other measures.

The existing nowadays system of state regulation of economy has
developed not at once. During the development it has passed some stages:

1) Creation of general favourable conditions for reproduction of the
private capital; a concentration of efforts of the state on development
of the labour, tax, trade, social legislation, customs politics, on
maintenance of stability of money. Construction and purchase of objects
in raw and infrastuctural branches.

2) The unmatched among them actions of an anticrisis and structural
orientation, attempt to influence employment and prices.

3) Experiments with use of money-credit and budget means of regulation
of economy. A wave of a privatisation of objects of a state ownership.

4) Transition in a number of the countries to branch and regional
intermediate term programming; attempts to increase effectiveness of
state regulation of economy by study of compatibility and
interchangeability of tools of regulation, definition of their
efficiency.

5) Realisation in the increasing number of the advanced countries of
nation-wide intermediate term programming in a combination to
development long-term perspective ways. More and more address, dosing
and complex use of tools of regulation.

6) Measure as agreed of nation-wide intermediate term programs at an
interstate level in framework integration of associations; steps in a
direction national of planning.

On scales, the tools and efficiency of state regulation of economy
decisive influence rendered tasks rising before economy of the separate
countries, material opportunities of the states reflected in a share to
them of a total internal product and in the absolute sizes of means,
which it is ready to use on state regulation of economy accrued
experience and successes in scientific development of problems of state
economic politics in conditions of a market economy.

The mechanism of state regulation of economy is constantly improved,
irrespective of, the governments on principles of economic politics are
guided or are inclined to use more rigid budget tools of regulation. In
modern conditions the practice of state regulation of economy has
appeared rather productive to not admit general crises and social —
dangerous of scales of unemployment.

The literature.

1) Economy. The textbook for economic academies, high schools and
faculties. Under edition of the candidate of economic sciences, senior
lecturer of AMPERE-SECOND. Bulatova. Publishing house. Moscow 1995.

2) Macroeconomic. The manual. M.K. Bunkina,V.A. Semenov. Publishing
house “ Moscow 1995.

3) Social market economy. The German way. Chaints Lampert. Publishing
house “Business”. Moscow 1994.

4) Market economy. The textbook. Volume 1, part 1. Publishing house
“Somintek”. Moscow 1992.

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