2. Politics of expensive and cheap money.

1. Monetary policy is formed and implemented by the central bank of the country. It is a set of measures aimed at regulating the money supply in circulation, the level of interest rates and other economic indicators monetary circulation in the country.

The main objectives of monetary policy are economic growth, full employment, price stability, stable balance of payments. To achieve these goals, the central bank regulates the money supply by influencing the money supply, as well as the money multiplier.

The instruments used by the central bank are divided into instruments of direct and indirect regulation. The first include credit limits, direct regulation of the interest rate. The gradual construction of a market system leads to the weakening of direct instruments of regulation, and then to their displacement by indirect instruments of regulation.

The instruments of indirect regulation of monetary policy include: operations on the open market, changes in the reserve ratio, changes in discount rate.

By buying securities on the open market, the central bank increases the reserves of commercial banks, which leads to an increase in the money supply. The sale of securities by the central bank leads to a decrease in the reserves of commercial banks and, consequently, to a decrease in the money supply. Open market operations are the most important instrument by which the money supply in a country is regulated.

Currently, there is a mandatory reserve ratio set by the central bank. Established reserves serve as a means by which it is possible to influence the amount of the country's money supply.

Establishing an increased rate required reserves leads to a decrease in funds for active operations of commercial banks and a reduction in the money supply. Conversely, a decrease in the required reserve ratio increases the money supply. In Russia, the requirements for the reserve ratio range from 15% to 20%, depending on the term of the deposit.

When issuing a loan commercial banks set the price for the use of money - the discount rate, which depends on the discount rate (refinancing rate) of the central bank. With an increase in the discount rate, the possibility of providing credit to firms and the population is reduced, which can lead to a decrease in business activity and money supply. Raising the discount rate is also a way to fight inflation. Reducing the discount rate works in the opposite direction.

The manipulation of the discount rate by the central bank is the traditional leverage of monetary policy. It is necessary to keep in mind the presence of a subjective factor influencing decision-making in matters of lending by commercial banks. Much depends on the economic situation and forecasts.

2. Depending on economic situation the central bank pursues a policy of expensive and cheap money.

Politics expensive money aims to reduce the money supply. It is usually held during a period of rising inflation. Credit becomes expensive and difficult to obtain.

The reduction in the money supply is facilitated by the sale of securities by the central bank on the open market, an increase in primary requirements and the discount rate.

The policy of cheap money is carried out when there is an underutilization of production capacities and unemployment in the economy. Pursuing a policy of cheap money is most characteristic of periods of recession. Credit in this case becomes cheap, easily accessible. An increase in the money supply is facilitated by the purchase of securities by the central bank on the open market, a decrease in the reserve ratio, and a decrease in the discount rate. An increase in the money supply causes an increase in investment and an increase in business activity, but can intensify inflationary processes.

Central bank policy has the most direct influence on the financial situation in the country. The role of the central bank in preventing crises in the activities of commercial banks is especially great. (On the main directions of monetary policy and its features in the Russian Federation, see M.K. Bunkina. National Economy. Ch. 10.)

Basic terms

Monetary policy objectives, monetary policy instruments, required reserves, open market operations, change in the discount rate, change in the required reserve ratio, central bank discount rate (refinancing rate), expensive money policy, cheap money policy.

Literature

1. Dolan E. Macroeconomics / E. Dolan, D. Lindsay. - St. Petersburg: Nauka, 1994. -- Ch. 8-10.

2. McConnell K. Economics: principles, problems and politics. T.1 / K. McConnell., S. Bru. - M .: Republic, 1992. - Ch. 17, 18.

3. Fischer S. Economics / S. Fischer, R. Dornbusch, R Schmalenzi.-M.: MSU Publishing House, 1997.-- Ch. 26,

4. Agapova T.A. Macroeconomics/ T.A.Agapova, S.F. Seregina.- M.: Business and service, 1999. --

5. Lifshits A. Introduction to the market economy./Ed. A. Lifshits, I. Nikulina. - M.: Higher. school., 1995.- Ch. 7-8.

The impact of the de-dollarization of the Russian economy on the development of small businesses

In the context of the post-crisis economic recovery, the focus is on expansionary fiscal policy (soft tax policy)...

Public policy income redistribution

If in the middle of the twentieth century the area of ​​social policy carried out within the framework of the welfare state included health care, education, housing ...

State regulation of the economy

Monetary policy (sometimes called monetary or simply monetary) is a set of measures used by the country's financial authorities to achieve their goals and affect the amount of money in circulation ...

Russian monetary system

According to the evolutionary concept of the origin of money, they arose as a result of the development of the social division of labor, exchange, and commodity production. This concept is shared by both neoclassical and Marxist schools...

The monetary system of Russia and its functioning in modern conditions

Since ancient times, money has been known that appeared as a result of a higher development of production and commodity relations. The condition of exchange is the division of labor, and the object of exchange is agricultural products...

Monetary policy and its features in the Republic of Belarus

The term "refinancing" means receiving Money credit institutions from the Central Bank. The Central Bank can issue loans to commercial banks, as well as rediscount securities ...

Money is the basis of the modern economy

historical science established that money (their original forms) appeared in ancient times among different peoples, independent of each other, which emphasizes the universality and necessity of money in public life...

Instruments and Transmission Mechanism of Monetary Policy

The process of consistently influencing certain parameters of the monetary sphere in order to influence the real sector of the economy is called the transmission mechanism of monetary policy ...

Research of the money market of the Republic of Belarus and determining the ways of its development

The main element of a market economy is money, which ensures the continuity of the national economic cycle, the cycle of income and expenses ...

Monetary or monetary policy of the state

The politics of expensive money (restrictive) and the politics of cheap money (expansionist) have already been mentioned above. In this section, I will consider what it is and what is the mechanism for implementing one or another. Consider two situations...

Fiscal policy and its role in stabilizing and developing the economy

Fiscal policy (fiscal policy) is the measures that the government takes to stabilize the economy by changing the amount of revenues and (or) expenditures of the state budget ...

The policy of regulating incomes of the population and social protection in the context of the transition to a socially oriented market economy

Modern money: essence, forms, evolution

Theories of money

There are scientific concepts of the origin of money: rationalistic and evolutionary. The rationalist concept explains the origin of money as the result of an agreement between people who are convinced that ...

Economic theory (macroeconomics)

1. Monetary policy is formed and implemented by the central bank of the country. It is a set of measures aimed at regulating the money supply in circulation ...

Usually, there are final and intermediate goals of monetary policy. As ultimate goals formulate:

Ensuring stability economic growth;

The fight against unemployment;

Reducing inflation and achieving price stability;

Stability of the country's balance of payments.

intermediate target landmarks are:

The money supply and, above all, the aggregates M 1 and M 2;

interest rate;

Exchange rate.

The money supply is closely related to the policy of the National Bank, which determines the value of money depending on the state of the real sector of the economy. Therefore, they talk about the policy of "expensive" and the policy of "cheap" money.

Dear money policy carried out during a period of high inflation. It means a large number of money in the economy, exceeding the need for them. National Bank limits the money supply by selling government securities, raising the discount rate, and reserve requirements. As a result of these measures, the ability of commercial banks to create money is reduced, which becomes a relatively rare, less accessible resource, which causes a reduction in the demand for money and slows down inflation.

Often, inflation in the framework of the expensive money policy is fought with the help of the policy targeting. In this case, the government sets certain goals for changing the volume of money supply in the country and strives to achieve them despite fluctuations in the economic situation. The growth rate of the money supply should be lower than the growth rate of demand for money, which makes it possible to reduce inflationary expectations and, as a result, the inflation rate.

With high inflation in the country, the domestic currency is replaced by a more stable foreign currency. In a "dollarized" economy, purchasing power parity tends to be fairly accurate. Therefore, in the course of inflation, the exchange rate of the national currency decreases at about the same rate as domestic prices rise. If the exchange rate can be stabilized, domestic prices can also be stabilized.

The standard stabilization program aims to fixing the exchange rate at an acceptable level, that is, at a level that can be protected by the National Bank. But the stability of the exchange rate requires a tight fiscal policy that could free the government from seigniorage financing. If a government simultaneously tries to print money and maintain a fixed exchange rate, it will lose foreign exchange reserves and face a balance of payments crisis.

Since most domestic prices are linked to the dollar through purchasing power parity, inflation could theoretically stop in just a day, as soon as the exchange rate stabilizes.

In countries with economies in transition and developing countries, the practice is currency committee. In this case, the exchange rate of the national currency against a foreign currency or a basket of currencies is fixed. Additional emission of money is carried out only if the currency reserves of the National Bank grow. This allows you to limit the growth rate of the money supply in the country and make money "more expensive". Therefore, the main anti-inflationary measures here are:

1) public and wide explanation through the media of the planned anti-inflationary strategy in order to gain public confidence and support;

2) creation of a special stabilization fund (gold and foreign exchange reserves) through internal and external borrowing;

3) tightening of the budget policy aimed at a significant reduction or elimination of the existing budget deficit;

4) the introduction of a fixed exchange rate and a number of related restrictions in the foreign economic and monetary sphere;

5) stimulation of exports and inhibition of imports by various means;

6) removal of imposed restrictions and liberalization of relevant areas economic activity with the suppression of inflation and the growth of gold and foreign exchange reserves.

Monetary reform: the introduction of a new currency. The most popular way to stabilize is to “drop zeros” of a heavily depreciated currency. Old money is exchanged for new at a certain rate:

a) no change

b) with changing levels wages and prices.

The second is purely cosmetic. The first will lead to a significant reduction in real cash balances and a severe economic downturn. In general, this is most useful in a situation of subdued inflation, when the money supply has risen and price controls prevent it from rising in line with the increase in the money supply. A monetary reform would then bring the money supply into line with prices instead of allowing them to rise sharply.

The policy of "cheap" money carried out when the National Bank believes that an increase in the money supply is insufficient and hinders economic growth, generates unemployment. The goal of a cheap money policy is to make money relatively cheap and available for investment spending. This is achieved by purchasing government securities, reducing the required reserve ratio and the discount rate.

These measures mean expanding the ability of commercial banks to create money and increasing the desire of households to have deposits in the bank. As a result, the volume of investments increases, because they are an inverse function of the interest rate. An increase in investment means an increase in aggregate demand by the amount of investment growth and, through the multiplier effect, causes an additional expansion of GNP, while simultaneously contributing to the growth of employment in the economy. This relationship is expressed graphically (Figure 5.7):

Rice. 5.7 Effect of cheap money policy

A cheap money policy can stimulate demand-pull inflation (Figure 5.8). This is due to the fact that the demand for goods and services is growing faster than the ability of the economy to increase production. Therefore, an increase in the amount of money in the economy leads to an excess in the short run of aggregate demand over aggregate supply, resulting in an increase in prices in the economy (from P 1 to P 2). Subsequently, the growing demand begins to be satisfied by attracting more expensive resources, which lead to higher costs for entrepreneurs and encourage them to return to the original volume of production. But in order to compensate for the purchase of more expensive resources, the prices of end products must rise. This phenomenon is supply inflation (from P 2 to P 3).

Rice. 5.8 Cheap money policy and demand-pull inflation

In some cases, it is accompanied by a drop in production volumes, i.e. stagflation. In order to prevent a decline in output, the National Bank must constantly feed the economy with additional emission of money, thereby stimulating aggregate demand and maintaining output at a constant level, greater than the potential output (Y f). The consequence of this approach may be hyperinflation (Figure 5.9).

Rice. 5.9 Cheap money policy and hyperinflation

Within the framework of the classical theory, a conclusion was formulated about the influence of money in the long run on price level, GNP and interest rate. These conclusions are called the principle dene neutrality d: a one-time increase in the money supply contributes to a change in real output only in the short run and does not affect the equilibrium volume of GDP in the long run. This is due to the fact that the economy is at the level full time, and the amount of money does not affect the emergence of new factors of production. The equilibrium level of prices for finished goods and attracted factors of production rises in proportion to the change in the amount of money in circulation, and the interest rate remains constant, because. the volume of investments that is planned and introduced into the economy does not change. It is argued that the velocity of circulation of money is a constant value.

If we assume that the government pursues a policy of constantly increasing the amount of money in the economy in the long run, then the volume of real production and the real interest rate remain unchanged, while the nominal interest rate and the price level increase both in the long run and in the short run. This statement is called the principle superneutrality of money.

The main types of monetary policy are:

• - credit expansion (policy of cheap money) - a policy aimed at stimulating credit relations in the country and money emission;
• -credit restriction (policy of expensive money) - restriction of emission and lending.

The policy of cheap money is used in conditions of cyclical decrease in output and rising unemployment. central bank resorts to the purchase of securities (bonds, treasury bills) from the population and commercial banks, lowers the reserve ratio and lowers the discount rate (or the refinancing rate, i.e. the rate at which National Bank collects payments on loans issued by a commercial bank). As a result of these measures, the so-called transmission (transmission) mechanism is switched on, leading sequentially:

• - an increase in the money supply;
• - to falling rates of commercial banks;
• - to the growth of investment costs of enterprises;
• to an increase in real net national product.

Credit expansion also leads to the inclusion of transmission at the level international relations countries. Sequentially happens:

• -reduction of demand for the national currency abroad;
• - depreciation of the national currency;
• - increase in net exports.
• -The policy of expensive money is applied in the face of an increase in the general level of prices. The central bank sells securities, while increasing the reserve ratio and the discount rate. As a result, the money supply decreases, the interest rates of commercial banks increase, the volume of investments of enterprises decreases, and the rise in prices decreases.

Credit restriction at the international level leads to an increase in demand for the national currency abroad, an increase in the value of the national currency and a decrease in net exports.

The effectiveness of credit expansion and restriction depends on the following components:

• - from the speed of decision-making by the central bank (as a rule, the decision to change fiscal policy is applied by the parliament and discussed for a long time);
• - isolating central bankers from the pressure of lobby groups.

In general, the main objectives of monetary policy can be considered:

• -an increase in real GDP;
• -decrease in the level of unemployment;
• - stabilization of prices;
• -achievement of stability of the balance of payments.

The macroeconomic tasks currently facing the government of the Russian Federation and the Central Bank are as follows:

• - overcoming the economic downturn;
• - keeping inflation within acceptable limits (less than 15%);
• - stabilization of the ruble exchange rate and the balance of payments;
• - support of the standard of living of the population;
• -limitation of unemployment;
• - stabilization of the banking system;
• -support for lending to the real sector.

The implementation of these tasks seems to be quite contradictory in terms of the choice of monetary and economic policy. Additional factors influencing the choice of certain optimal proportions are the following.

In monetary policy

In the years leading up to the crisis, the Central Bank of the Russian Federation practically did not refinance the banking system, and the Ministry of Finance placed its securities in limited volumes. Now the situation has fundamentally changed: the Bank of Russia actually determines the cost of money in the economy by its refinancing rates.

In economic policy

Any decision on the selection of enterprises and projects for financing, subsidizing, issuing guarantees, etc. is connected both with a lack of qualified personnel and with the "human factor". Within the framework of this problem, a search is being made for universal market mechanisms that allow for the adjustment of economic policy and the behavior of subjects economic activity.

Dear money policy

A restrictive (aimed at limiting the expansion of the money supply) policy of "expensive" money implies a high level of interest rates and is traditionally regarded as a means of suppressing inflation.

Today, the choice of such a policy may be driven by the objectives of maintaining a stable ruble exchange rate and reducing demand for foreign currency, as well as keeping and reducing the rate of inflation.

The implementation of the “dear” money policy includes raising (or lowering) the level of interest rates on financial resources provided by the Bank of Russia and the government, as well as restrictions on expanding the money supply. The consequences of implementing such a policy may be different.

Positive consequences:

• - stimulation of savings non-financial sector(due to the growth of interest rates on deposits and the stabilization of inflationary and devaluation expectations);
• -selection of enterprises according to efficiency (expensive bank loans can only be attracted by enterprises that are effective today).

Negative consequences:

• -reduction of lending volumes and intensification of recession in the economy;
• - the growth of costs associated with the rise in the cost of servicing bank loans, and provoking cost inflation;
• -decrease in the stability of the banking system;
• -deterioration of the situation with "bad" debts.

Expected results this year:

• - stabilization of the ruble exchange rate;
• -growth of savings of the population;
• -decrease in lending growth rates;
• -maintaining the level of inflation due to devaluation, inflationary expectations, risk premiums (inflation will not increase, but will not decrease);
• - an increase in the number of defaults on domestic and foreign loans;
• -reduction in demand and decrease in production volumes;
• - fall in investment activity;
• - an increase in the number of bankruptcies of enterprises and banks.

In general, the policy of "expensive" money can allow in 2009. keep the ruble exchange rate within the announced corridor and keep inflation within 20%. In addition, it will provide an opportunity to reduce the gap between loans and savings in the non-financial sector.

Real sector economy in the context of the policy of "expensive" money will experience a growing hunger for credit. Only a small part of today's efficient enterprises will be able to use a bank loan. New levels of profitability will indicate a decrease in the ability to survive and a deterioration in prospects industrial productions during the period of the policy of "expensive" money, as well as the absence of state programs to support them.

The policy of "dear" money as a market selection mechanism works effectively and correctly in a stable economy, which is moderately dependent on external risks, stable growth rates, in the context of progressive (without sharp bursts) expansion of investment. It will be possible to improve the structurally unbalanced Russian industry during the period of the "expensive" money policy only with the use of targeted state programs.

As an example, we can cite the machine-building complex, in fact, the locomotive of the growth of Russian industry in recent years, developing on innovation and stimulating the innovative development of related industries.

The obvious problems of the machine-building complex make it extremely important to formulate and implement a policy to support enterprises' investments and current production activities - both with credit resources and the formation of demand.

The policy of "cheap" money

Expansionist (aimed at increasing the overall money supply in the economy) "cheap" money policy based on low interest rates, traditionally used to reduce (or limit growth) unemployment in a recession.

Today, the choice of a "cheap" money policy can be conditioned by the following tasks:

• - stimulation of domestic demand and production (including supporting the level of employment);
• -ensuring the stability of the banking system.

Positive consequences of this policy can be:

• - minimization of decline in production;
• - support of employment level;
• -stability (partly temporary) of the banking system.

Its negative consequences include:

• -preservation of the threat of devaluation of the ruble;
• -high risks accelerating inflation;
• -preservation of structural imbalances.

Possible results this year:

• - the expansion of demand will reduce the rate of decline in production;
• -solution of the problem of "bad" debts will be postponed to subsequent years;
• - high inflation will remain;
• -the depreciation of the ruble will continue;
• - there will be a sharp reduction in public resources;
• - the problem of low efficiency and competitiveness of Russian enterprises and banks will remain.

Additionally, it can be noted that the key issue in the implementation of the policy of "cheap" money is their source. There are grounds to expect a rapid depletion of state reserves. Then the main sources of money supply will be emission refinancing of the banking system and money emission for the issuance of government securities, which poses high risks for financial stability.

Monetary policy is a set of measures and government in the field of money circulation and credit.

Monetary policy of the central bank (monetary policy) is a set of state measures regulating the activities monetary system, loan capital market, order to achieve a number of general economic goals: stabilization of prices, rates, strengthening of the monetary unit.

Monetary policy is the most important element.

All impacts are reflected in the value of the total social product and .

The main objectives of the state monetary policy:

• containment
• Security
• Pace control
• Mitigation of cyclical fluctuations in the economy
• Ensuring the sustainability of the balance of payments

Principles of monetary and credit regulation of the economy

Monetary regulation of the economy is carried out on the basis of the principle compensatory regulation, which assumes the following:

• monetary policy restrictions, which involves limiting credit transactions by raising reserve standards for participants in; level up ; limiting the growth rate in circulation compared to the mass of commodities;
• monetary policy expansion, which involves stimulating credit operations; reduction of reserve norms for subjects of the credit system; level drop lending rates; acceleration of the turnover of the monetary unit.

Instruments of monetary policy

The development and implementation of monetary policy is the most important function. It has the ability to influence the volume of money supply in the country, which in turn allows you to regulate the level of production and employment.

The main tools of the central bank in the implementation of monetary policy:

• Regulation of official reserve requirements
  It is a powerful means of influencing the money supply. The amount of reserves (the part of bank assets that any commercial Bank is obliged to keep in the accounts of the central bank) largely determines its credit capabilities. Lending is possible if the bank has enough funds in excess of the reserve. Thus increasing or decreasing reserve requirements can regulate credit activity banks and consequently affect the money supply.

• Open Market Operations
  The main tool for regulating the money supply is the purchase and sale of government securities by the Central Bank. When selling and buying securities, the Central Bank tries to influence the volume of liquid funds of commercial banks by offering favorable interest. By buying securities on the open market, he increases the reserves of commercial banks, thereby contributing to an increase in lending and, accordingly, an increase in the money supply. The sale of securities by the Central Bank has the opposite effect.
• Regulation of discount rate of interest (discount policy)
  Traditionally, the Central Bank provides loans to commercial banks. The rate of interest at which these loans are issued is called the discount rate of interest. By changing the discount rate of interest, the central bank affects the reserves of banks, expanding or reducing their ability to lend to the population and enterprises.

The factors that affect demand, supply, and interest rates can be grouped under the heading "monetary policy instruments". These include:

Interest rate policy of the Bank of Russia

The Central Bank sets minimum interest rates for its operations. The refinancing rate is the rate at which a loan is granted by commercial banks, or it is the rate at which bills are rediscounted from them.

The Bank of Russia may establish one or more for various types of operations or pursue an interest rate policy without fixing the interest rate. Bank of Russia uses interest rate policy to influence market interest rates in order to strengthen the ruble.

Bank of Russia regulates the total amount of loans issued to them in accordance with the accepted guidelines of the unified state monetary policy, while using the discount rate as an instrument. Bank of Russia interest rates are the minimum rates at which the Bank of Russia carries out its operations.

Interest policy of credit institutions, being part of the national monetary policy, has a significant impact on the development, its stability. they are usually free to choose specific rates on loans and deposits and use some indicators reflecting the state of the short-term money market as benchmarks in the implementation of interest rate policy. On the other hand, the central bank, in the process of targeting, sets intermediate monetary policy goals that it can influence, as well as specific tools to achieve them. This may be the refinancing rate or interest rates on central bank operations, on the basis of which the short-term interbank lending rate is formed, etc.

The problems of identifying factors influencing the interest rate policy of commercial banks have been of concern to specialists since the formation of economic theory. However, answers to many questions have not yet been found. Modern research aimed at identifying the optimal rules for the implementation of national monetary policy, in more are based on .

In theory and practice, methods of direct and indirect regulation of national monetary policy are considered. From the point of view of interest rate policy in the narrow sense (rates on credit and deposit operations, the spread between them) the instrument of its direct regulation is setting by the central bank of interest rates on loans and deposits of commercial banks, indirect instruments - setting the refinancing rate and the rate on central bank operations in the money and open markets.

Interest rates on loans and deposits as instruments of direct regulation are not often used in world practice. For example, the People's Bank of China sets rates that are considered indicative for the banking system. At the same time, the bank's policy is aimed at reducing the spread, which in the first half of 2006 was 3.65%, and by the end of 2009 - 3.06%, which indicates sufficient liquidity of the Chinese banking system.

In many countries, including Russia, the refinancing rate has become more of an indicative indicator, giving the economy only an approximate benchmark for the value of the national currency in the medium term, since it is in an unchanged state for a long time, while the real rates in the money market change every day.

Required reserve ratios

Under existing legislation, commercial banks are required to allocate part of the funds raised to special accounts in.

Since January 2004 set by the Central Bank the following contributions to the mandatory reserve fund Bank of Russia: on accounts in rubles legal entities and foreign currency of citizens and legal entities, as well as on ruble accounts of citizens - 3.5%.

The maximum amount of deductions, i.e., the required reserve ratios, is 20% and cannot change by more than 5% at a time.

This standard allows the Bank of Russia to regulate the liquidity of the banking sector.

The reserves serve as a current regulation of liquidity in the money market, on the one hand, and as a limiter on the issue of credit money, on the other.

In case of violation of the required reserve ratios, the Bank of Russia has the right to recover in an indisputable manner from the credit institution the amount of outstanding funds, as well as a fine in the established amount, but not more than double.

Open market operations

Operations on the open market, which are understood as the purchase and sale by the Bank of Russia of corporate securities, short-term operations with securities with the completion of a reverse transaction later. The limit of operations on the open market is approved by the board of directors.

In accordance with the law of July 10, 2002 No. 86-FZ (as amended on October 27, 2008) “On the Central Bank of the Russian Federation (Bank of Russia)”, the Bank of Russia has the right to buy and sell, having a commodity origin with a maturity of not more than 6 months, buy and sell bonds, certificates of deposit and other securities with a maturity of not more than 1 year.

Refinancing

Refinancing means lending by the Bank of Russia to banks, including accounting and rediscounting of bills. The forms, procedure and conditions for refinancing are established by the Bank of Russia.

Refinancing of banks is carried out by providing intraday loans, overnight loans and holding Lombard loan auctions for up to 7 calendar days.

Currency regulation

It should be considered from two sides. On the one hand, the Central Bank should monitor the legality of the currency transactions, on the other hand, behind the change in the national currency in relation to other currencies, without allowing significant fluctuations.

One of the methods of influencing the exchange rate is the conduct of foreign exchange interventions or motto policy by central banks.

Currency intervention- is the sale or purchase of foreign currency by the Central Bank for the purpose of influencing the exchange rate and the total demand and supply of money. These, obviously, should include transactions for the purchase and sale precious metals on the domestic market of the Russian Federation, the procedure for which is regulated by the letter of the Central Bank of the Russian Federation dated December 30, 1996 No. 390.

The main objectives of the exchange rate policy in Russia are building confidence in national currency and replenishment of gold and foreign exchange reserves. At present, the monetary base is fully secured by gold and foreign exchange reserves.

Direct quantitative restrictions

Under the direct quantitative restrictions of the Bank of Russia, the establishment of limits on refinancing banks, holding credit organizations individual banking operations. The Bank of Russia has the right to apply direct quantitative restrictions in exceptional cases for the purpose of pursuing a unified state monetary policy only after consultations with the government of the Russian Federation.

Growth benchmarks for money supply indicators

The Bank of Russia may set growth targets for one or more indicators based on the main directions of the unified state monetary policy. In Russia, the main aggregate is the monetary aggregate.

To date, the monetary policy of central banks is guided by monetarist principles, where the Central Bank is tasked with tightly controlling the money supply, ensuring a stable, constant and long-term growth rate of the amount of money in the economy, equal to the GDP growth rate.

Other factors that affect demand, supply and interest rates include:

• the situation in the real sector of the economy;
• return on investment in production;
• the situation in other sectors of the financial market;
• economic expectations of business entities;
• the need for banks and other business entities in cash to maintain their liquidity.

Politics of cheap and expensive money

Depending on the economic situation in the country, the central bank pursues a policy of cheap or expensive money.

Cheap money policy

Characteristic of the situation of economic recession and high level. Its goal is to make credit money cheaper, thereby increasing aggregate spending, investment, production, and employment.

To implement a cheap money policy, the central bank can reduce the discount rate on loans to commercial banks or make purchases on the open market or reduce the reserve requirement ratio, which would increase the money supply multiplier.

Expensive money policy

It is carried out with the aim of reducing the pace by reducing aggregate spending and limiting the money supply.

Includes the following activities:

• An increase in the discount rate of interest. Commercial banks begin to take less loans from the Central Bank, hence the money supply is reduced.
• Sale of government securities by the central bank.
• Increase in reserve requirements. This will reduce the excess reserves of commercial banks and reduce the money supply multiplier.

All of the above instruments of monetary policy referred to indirect (economic) methods of influence. In addition to these general methods of monetary regulation, the whole bank also uses direct (administrative) methods designed to regulate specific types of credit. For example, a direct limitation on the size of bank loans for consumer needs.

Monetary policy has pros and cons. Strengths include speed and flexibility, less dependence on political pressure compared to fiscal policy. Problems in the implementation of monetary policy are created by cyclical asymmetry. The effectiveness of monetary policy can also be reduced as a result of an opposite change in the velocity of money.

Introduction ……………………………………………………………………… 3-4

1.1. What is meant by money ……………………………………………4-

1.2. The main functions of money …………………………………………………

1.3. Politics of "expensive" and "cheap" money

2.1. Practical part

Conclusion

Bibliography

Introduction

Monetary policy occupies an important place in the life of society, aimed only at ensuring economic turnover with sufficient and necessary money supply. In fact, we can say that monetary policy looks like "swimming against the wind." Its main purpose is to stimulate business activity in the conditions of business activity and to suppress it when the economic situation overheats. Monetary policy is designed to ensure economic growth in the economy.

Monetary policy, in fact, by changing the money supply in the country, affects the aggregate demand in the country. Therefore, it is important to trace the mechanism of the impact of monetary policy on the output of the product in the country.

However, for countries with economies in transition (to which our country belongs), the regulation of the economy through monetary policy acquires a special meaning. Such a policy forms the necessary conditions and prerequisites for the implementation of the strategic goal of any transition economy- reproductive structure, adequately formed social model.

The main topic of this work is commodity-money relations, which include consideration of the issues "The policy of expensive and cheap money, the mechanism of its impact on the economy."

Money is an essential element of our daily life. Money is the most important attribute of the economy. The stability of the country's economic development largely depends on how the monetary system functions. The study of the nature and basic functions of money, the process of evolution monetary system, organization and development of monetary circulation, the causes, consequences and methods of combating inflation is necessary to understand the functioning of the entire financial system.

AT modern economy money is the regulator of economic activity, increasing or decreasing their amount in circulation, the state thereby solves the tasks. Without money, the life of a modern person is unthinkable, all the aspirations of people in the economic sphere are aimed at obtaining as many of them as possible, while we receive satisfaction from their use, exchanging them for other benefits, giving them away.

During the study of the problem, the following tasks were set:

1. Study what is meant by money.

2. Consider the mechanism of the impact of monetary policy on the country's economy.

Chapter 1.

1.1. What is meant by money.

Money is the equivalent of wages artificially invented by mankind, a unit for measuring commodity-money turnover. Money appeared as a replacement for the barter exchange of natural products. AT different countries ah, money has a different name and different quotes. Money is issued, as a rule, in paper or metal form.

The entire history of the development of the economy is at the same time the history of the development of commodity production and commodity consumption, where the links between producers and consumers are carried out through the exchange of one commodity for another. Money acts as an intermediary in such an exchange.

Money is an integral component of commodity production and develops along with it. The evolution of money, their history are an integral part of the evolution and history of commodity production, or market economy.

Money exists and acts where economic life through the movement of goods.

In the modern economy, money is the regulator of economic activity, increasing or decreasing their amount in circulation, the state thereby solves the tasks. Without money, the life of a modern person is unthinkable.

1.2.Basic functions of money

In the modern economy, money performs five functions:

1. Measure of value (consists in the fact that in money we express the value of all other goods);

2. Means of circulation (with the help of money we exchange one commodity for another, the exchange of goods performed with the help of money is called commodity circulation);

3. Means of accumulation;

4. Means of payment, settlement (money performs this function when payment for goods and services is not made immediately - lending and wages);

Money as a measure of value. This function of money plays a crucial role in the organization and operation of the entire social economy, since it is thanks to a single measure of measurement that we are able to quantitatively compare the relative values ​​of various goods and services. Everyone knows that in order to measure distance, weight or volume, you need to choose the appropriate unit or scale - meter, kilogram or liter. In the economy, they do exactly the same: the governments of different countries set their own monetary unit or price scale. The unit chosen measures the relative value of all goods and services sold. Such a common unit greatly facilitates the quantitative comparison of goods and the establishment of equivalent ratios between them.

Money as a medium of exchange. Under money circulation refers to the process of continuous movement of money in cash and non-cash forms, serving the processes of circulation of goods and services, the movement of capital. The circulation of banknotes involves their constant transition from one legal or individuals to others.

To show more clearly the advantage of money circulation over the exchange of one commodity for another (what is called bartering), it is enough to note that in order to barter you must find a buyer for your commodity, and that this buyer has the commodity you need. For example, if you have grain and want to buy vegetables, then you must find a grower who needs grain. Therefore, the act of selling and buying is not separated in time here. They occur simultaneously, and this is inevitably associated with inconvenience, not to mention certain distribution costs associated with the loss of time and money.

Money circulation eliminates the disadvantages of barter exchange:

1) The act of selling and buying for money can be separated from each other. You can sell your product, get money for it, and then buy the product you need for them at a convenient time and place.

2) Money makes it possible to carry out an incomparably greater choice of goods and partners in trade transactions.

3) Their most important advantage is that they act as a universal equivalent of value, and that is why they have a universal purchasing power, and therefore serve as a universal medium of exchange.

Money as a store of value. Money serves as a means of accumulation because, after the sale of goods and services, they give their owner the opportunity to purchase goods in the future. In other words, money provides its owner with a future purchasing power. Other things can serve as a means of accumulation, for example, jewelry, real estate, works of art, not to mention stocks and bonds. In the economic literature, there is a common term for their designation - assets: they have a certain liquidity, i.e. ability to act as a means of payment.

Unlike other assets, money has the highest liquidity, since it functions as a measure of value and thus retains its nominal value. Other assets have less liquidity. So, in order to use real estate as a means of payment, you must first find a buyer, incur certain costs of sale, and besides, real estate prices can change depending on the place, season, and also over time. Government securities are closest to money in terms of liquidity. They can easily be sold for financial market and their prices fluctuate quite a bit. Stocks and bonds issued by enterprises, firms and corporations have less liquidity.

world money. Foreign trade relations, international loans, the provision of services to an external partner caused the emergence of world money. They function like a universal means of payment, the universal means of purchase, and the universal materialization of social wealth.

During the period of the gold standard, the practice of final balancing of the balance of payments with the help of gold prevailed in the world, although in international circulation mainly credit instruments of circulation were used.

In the twentieth century, the intensification of world relations expanded the introduction of credit instruments of circulation (bills, checks, etc.) into international circulation. However, the peculiarity of the use of credit instruments of circulation in international circulation lies in the fact that they do not play the role of the final means of payment, such as gold.

Therefore, in order to reduce fluctuations exchange rates and streamlining the functioning of the world's leading currencies (dollar, pound sterling) as world money, international agreements and currency blocks were used. Examples are - International Monetary Fund Special Drawing Rights (SDRs), ECU - currency unit member countries of the European Monetary System.

All five functions of money represent a manifestation of the single essence of money as the universal equivalent of goods and services. They are in close relationship and unity. Logically, historically, each subsequent function presupposes a certain development of the previous ones.

Due to the above functions, money plays a key role in the development of production. The public role of money in economic system is that they are a link between independent commodity producers.

1.3. The policy of "expensive" and "cheap" money.

In modern conditions, the implementation of the policy of "expensive" or "cheap" money in the classical form leads rather to negative consequences. Obviously, taking into account the current structure of the Russian economy, structural problems, as well as the deterioration of the global environment, the use of purely market mechanisms is inevitably accompanied by costs, losses and new threats. The choice of one of the directions of the interest rate policy is complicated by comparisons of "pro" and "contra" in its implementation - in fact, one of the available "bad" decisions is being chosen. Solutions can only be improved administrative regulation(since we are talking about the distribution of state savings) and the active work of the state at the micro level with business representatives.

Therefore, it is necessary to search for some combined option: either a tight monetary policy together with selective subsidization of interest rates, tax incentives, direct public funding; or large-scale support for the real sector, accompanied by increased currency regulation and control over the use of public funds.

The dear money policy aims to reduce the money supply. It is usually held during a period of rising inflation. Credit becomes expensive and difficult to obtain.

The reduction in the money supply is facilitated by the sale of securities by the central bank on the open market, an increase in primary requirements and the discount rate.

The policy of cheap money is carried out when there is an underutilization of production capacities and unemployment in the economy. Pursuing a policy of cheap money is most characteristic of periods of recession. Credit in this case becomes cheap, easily accessible. An increase in the money supply is facilitated by the purchase of securities by the central bank on the open market, a decrease in the reserve ratio, and a decrease in the discount rate. An increase in the money supply causes an increase in investment and an increase in business activity, but can intensify inflationary processes.

The policy of the central bank has the most direct impact on the state of finance in the country. The role of the central bank in preventing crises in the activities of commercial banks is especially great.

The equation for the quantity theory of money is

M*V= P*Y (1) ,

Where M is the amount of money,

V is the velocity of money circulation,

P - price level,

Y - physical volume of GNP (number of goods and services).

Money circulation is the circulation of money as a means of circulation and payment, as well as the movement of funds as an integral part of commodity-money, financial-credit, currency, and settlement operations.

Monetary policy has a number of features, and its implementation in reality faces a number of difficulties, which primarily include:

1. Cyclical asymmetry, that is, if a policy of “expensive money” is pursued, then a point will be reached at which banks will be forced to limit the volume of loans, which means a restriction in the money supply. While the "cheap money policy" can provide commercial banks with the necessary reserves, that is, the ability to make loans, it cannot guarantee that the latter will actually make loans and the money supply will increase. The population can also frustrate intentions Central Bank, buying bonds from the public, can be used by the population already available loans.

By limiting the volume and raising interest rates on loans provided, i.e. implementing a policy of "expensive money", the central bank forces commercial banks to limit the volume of their operations, as a result of which new means of payment are created. And vice versa, by pursuing a liberal policy of "cheap money", it allows banks to expand lending and thereby accelerate the issuance of means of payment.

This cyclical asymmetry is a serious hindrance to monetary policy only during a deep depression. In normal periods, an increase in excess reserves leads to the provision of additional credit and thus to an increase in the money supply.

2. Change in the velocity of money circulation. Thus, from the point of view of money circulation, total expenditures can be considered as the money supply multiplied by the velocity of money circulation. In this regard, some Keynesians believe that the velocity of money tends to change in the opposite direction to the money supply, which eliminates changes in the latter caused by monetary policy. In other words, during inflation, when the money supply is limited by the policy of the Central Bank, the velocity of money circulation tends to increase. Conversely, when policy measures are taken to increase the money supply during a downturn, the velocity of circulation is likely to fall.

3. The impact of investment, that is, the operation of monetary policy, may be complicated and even temporarily slowed down as a result of adverse changes location of the investment demand curve. For example, a credit-tightening policy aimed at raising interest rates may have little effect on investment spending if, at the same time, demand for investment rises due to business optimism, technological progress, or the expectation of higher capital prices in the future. In such an environment, to effectively reduce aggregate spending, monetary policy must raise interest rates extremely high. Conversely, a severe downturn could undermine business confidence, and thereby nullify all cheap money policies.

Thus, the monetary policy pursued by the central bank, as an instrument of state regulation of the economy, has its strengths and weaknesses. The latter, for example, include the dilemma of the goals of credit policy, which arises from the impossibility for governing institutions to stabilize both the money supply and the interest rate at the same time. The foregoing allows us to conclude that the correct use of these levers to improve the economic situation in the country is realistic only with accurate planning and forecasting of the impact of the credit policy of the country's main bank on domestic business activity.

Interest rate management is a relatively new instrument of monetary policy. AT recent history Russian monetary authorities pursued an active interest rate policy only in 2002-2003, rapidly expanding the market for government borrowings. Then, despite the increased in modern conditions, the implementation of the policy of "expensive" or "cheap" money in the classical form leads rather to negative consequences.

The savings of the population and declining inflation all ended in a systemic financial crisis. In modern conditions, the implementation of the policy of "expensive" or "cheap" money in the classical form leads rather to negative consequences.

In the current century, the monetary authorities have actually abstained from conducting interest rate policy, concentrating in the most liberal style on the fight against excess liquidity. Low interest rates and a large amount of available financial resources were provided by the inflow of oil revenue and attraction of external loans with minimal restrictive actions of the state. As a result, production, incomes and consumption of the population grew, but imports and external debt increased faster, which worsened Russia's position in the context of the world economy. financial crisis. Ultimately, the “safe haven” turned out to be more prone to the “global storm” than other “victims” of the global crisis.

Today, apparently defending the liberal economic model, The Bank of Russia is trying to solve very contradictory tasks with its interest rate policy. On the one hand, the goals of stabilizing the ruble exchange rate and reducing inflation are met by a tight monetary policy, which implies positive real interest rates and restrictive growth in the money supply. On the other hand, support for the real sector of the national economy requires large-scale financial assistance, including the attraction of affordable loans with relatively low interest rates. At the moment, there are a significant number of enterprises (of strategic interest, backbone, carrying out modernization, related to imports in their production cycle, and others) that are experiencing a production shock caused by a drop in demand, an increase in the cost of components, and the unavailability of bank loans. The result of such a "shock" was not long in coming - in January of this year, the output of the manufacturing industry fell by a quarter.

The devaluation of the ruble (since August 2008 the exchange rate of the ruble has fallen against the dual-currency basket by 40%) is already a fait accompli. Despite all the pros and cons discussed, the depreciation of the ruble has already fundamentally changed the currency of savings of the population and enterprises, caused an increase in prices in the domestic market and keeps devaluation and inflation expectations high. All the efforts of the Russian monetary authorities to give the ruble the functions of a currency of settlements, savings and investments, undertaken over the course of five years, ended up being crossed out by a two-month devaluation. The possibility of a return to the previous situation will be largely determined by the interest rate policy of the Bank of Russia, which is greatly complicated by the financial crisis and the decline in economic activity. The policy of "cheap" money should be accompanied by increased foreign exchange control and control over the spending of public resources.

In its most general form, interest rate policy is divided into restrictive (implying a restriction of the money supply and increasing the cost of financial resources) and expansionary (aimed at expanding the money supply and implying low interest rates). Conventionally, the policy of "cheap" or "expensive" money depends on the level of interest rates and inflation, as well as on expectations of the level of inflation in the future. There is no clear definition of these types of monetary policy. We believe that for the Russian economy, whose development in the past twenty years has been characterized by high inflation, a conditional division into "expensive" and "cheap" money can be made on the basis of real interest rates.

The macroeconomic tasks currently facing the government of the Russian Federation and the Central Bank are as follows:

Overcoming the economic downturn;

Keeping inflation within acceptable limits (less than 15%);

Stabilization of the ruble exchange rate and balance of payments;

Support for the standard of living of the population;

Unemployment limitation;

Stabilization of the banking system;

Maintaining a minimum level of lending to the real sector.

These tasks seem to be rather contradictory from the point of view of the development of monetary and economic policy in general. Additional factors affecting the choice of certain optimal proportions are:

A) In monetary policy - which took place in recent months tool change. In the years leading up to the financial crisis, the Central Bank of the Russian Federation practically did not refinance the banking system, and the Ministry of Finance placed its securities in limited volumes. Now the situation has fundamentally changed: the Bank of Russia actually determines the cost of money in the economy by its refinancing rates.

B) In economic policy - the aggravation of the "personnel crisis". Any decision-making on the selection of enterprises and projects for financing, subsidizing, issuing guarantees, etc. due to both the lack of qualified personnel and the “human factor”. Within the framework of this problem, a search is being made for universal market mechanisms that allow for the adjustment of economic policy and the behavior of business entities.

Therefore, purely market mechanisms are inevitably accompanied by costs, losses and new threats. That is why the choice of one of the directions of the interest rate policy is, in fact, the choice of one of the "bad" decisions.

Dear money policy

Restrictive (aimed at limiting the expansion of the money supply) policy of "expensive" money implies a high level of interest rates and is traditionally seen as a means of suppressing inflation.

Today, the choice of such a policy may be determined by the tasks:

Maintaining a stable ruble exchange rate and reducing demand for foreign currency;

Maintain and reduce inflation. The choice of one of the directions of the interest rate policy is actually the choice of one of the available "bad" decisions.

The implementation of the “dear” money policy includes raising (or not reducing) the level of interest rates on financial resources provided by the Bank of Russia and the government, as well as restrictions on expanding the money supply. The implications of implementing this policy will vary.

Positive consequences:

Stimulation of savings in the non-financial sector (due to the growth of interest rates on deposits and the stabilization of inflation and devaluation expectations);

Selection of enterprises according to efficiency (expensive bank loans can only be attracted by enterprises that are effective today).

Negative consequences:

Reducing lending and worsening recession in the economy;

Growth of costs associated with the rise in the cost of servicing bank loans, and provoking cost inflation;

Reducing the stability of the banking system;

Deterioration of the situation with "bad" debts.

Expected results this year:

Stabilization of the ruble exchange rate;

Growth of savings of the population;

Slower lending growth;

Preservation of the inflation rate due to devaluation, inflation expectations, risk premiums (inflation will not increase, but will not decrease);

Increase in the number of defaults on domestic and foreign loans;

Reducing demand and reducing production volumes;

Decline in investment activity;

Growth in the number of bankruptcies of enterprises and banks.

On the whole, the “dear” money policy will make it possible in 2009 to keep the ruble exchange rate within the announced range and keep inflation within 20%. In addition, it will provide an opportunity to reduce the gap between loans and savings in the non-financial sector.

The real sector of the economy in the context of the policy of "expensive" money will experience a growing shortage of credit. Only an insignificant part of today's efficient enterprises will be able to use a bank loan, which can be explained by the declining profitability of industrial production. New levels of profitability indicate a decline in the ability to survive and a deterioration in the prospects for industrial production during the period of the policy of "expensive" money, as well as the real sector of the economy in the context of the policy of "expensive" money will experience a growing shortage of credit.

The “dear” money policy as a market selection mechanism works effectively and strategically correctly in a stable economy, moderately dependent on external risks, with stable growth rates, in the context of a progressive (without sharp bursts) expansion of investment. It will be possible to improve the structurally unbalanced Russian industry and revive its growth during the period of the “dear” money policy only with the use of targeted state programs.

In particular, there is a deterioration in the financial and dynamic performance of the machine-building complex - the actual locomotive of Russian industrial growth in recent years, developing on innovation and stimulating the innovative development of related industries. The obvious problems of the machine-building complex, which is the most important from the point of view of the future landscape of Russian industry, make it extremely important for the state to form and pursue an active policy to support enterprises' investments and current production activities - both with credit resources and demand formation.

Cheap money policy

Expansionary (aimed at increasing the overall money supply in the economy) "cheap" money policy based on low interest rates is traditionally used to reduce (or limit growth) unemployment in a recession.

Today, the choice of a “cheap” money policy may be determined by the following tasks:

Stimulating domestic demand and production (including supporting the level of employment);

Ensuring the stability of the banking system.

Positive consequences:

Minimization of the decline in production;

Employment support;

Stability (partly temporary and apparent) of the banking system.

Negative consequences:

Continued threat of further devaluation of the ruble;

High risks of accelerating inflation;

Conservation of structural imbalances.

Possible results this year:

The expansion of demand will reduce the rate of decline in production;

The solution to the problem of "bad" debts will be postponed to subsequent years;

High inflation will continue;

The depreciation of the ruble will continue;

There will be a sharp reduction in public resources;

The problem of low efficiency and competitiveness of Russian enterprises and banks will remain.

In addition, we note that the key issue of the policy of "cheap" money is their source. There is every reason to expect a rapid depletion of state reserves. Then the main sources of money supply will be emission refinancing of the banking system and money emission for the issuance of government securities, which poses high risks for financial stability.

2. Practical part

Cost analysis budget

Let's spend comparative analysis expenditure part of the federal budget for 2009 and for the planned period of 2010 and 2011. Consider table number 1.

Table No. 1 - Federal budget expenditures for 2009 and for the planning period of 2010 and 2011

Federal budget expenditures
		Specific		Specific		Specific
General government issues
national defense
National Security and Law Enforcement
National economy
Department of Housing and Utilities
Security environment
Education
Culture, cinematography and media
Health and sports
Social politics
Intergovernmental transformers
Conditionally approved expenses
Secret Articles

largest specific gravity in the classification of expenditures, intergovernmental transfers are occupied. In 2009, the share of spending these funds is 29.38%. If we talk about the dynamics of this indicator, then next year (2010) it will decrease by 0.8%. But in monetary terms, it increases by 630.46 billion rubles. In the medium term, an absolute increase in interbudgetary transfers by 2011 to 3,994.42 billion rubles is envisaged, which is 1,007.31 billion rubles. more than in 2009. In diagrams 1 and 2, you can clearly see how this indicator changes.

Diagram 1. Dynamics of interbudgetary transfers in absolute terms

Diagram 2. Dynamics of interbudgetary transfers in relative terms

This indicates the financing of the budgets of the constituent entities of the Russian Federation.

The second section, the share of which is 11.24% of the total amount of expenditures, are national issues. In dynamics, we see that this indicator is decreasing in percentage terms. It is predicted that in 2011 the amount of expenses will amount to 1,135.45 billion rubles, which will decrease by 7.83 billion rubles compared to the planned in 2009. . The main subsections include budget allocations for the judiciary, ensuring the activities of financial, tax and customs authorities and supervisory bodies, servicing state and municipal debt and other national issues. Direct increase in wages for civil servants (deputies and their assistants, judges, increase in compensatory remuneration for jurors and arbitration assessors, assistant judges arbitration courts, secretaries of court sessions of arbitration courts, etc.), conducting overhaul administrative buildings, ensuring the activities of the Accounts Chamber of the Russian Federation. And there are a lot of such allocations in each subsection, which indicates the growth of this indicator as a whole.

The national economy ranks third in the distribution budget funds. It is predicted that in 2009 the amount will be 1,063.31 billion rubles, in 2011 it will increase to 1,371.49 billion rubles. which is significantly noticeable in the percentage of 28.98%.

This section includes the powers to regulate and support economic activities, including environmental management, infrastructure development and natural resource potential, state support for certain sectors of the economy are mainly assigned to the jurisdiction of the Russian Federation.

The main place in their structure is occupied by budget allocations for transport, reproduction of the mineral resource base, Agriculture and fisheries, communications and informatics, other issues in the field of the national economy.

According to the forecast, this indicator is now in 3rd place, but already in 2011 it will take the second place.

The 4th place in the list of budget expenditures is national security and law enforcement, and the 5th place is national defense.

Both of these sections are increasing funding. Consider diagrams 3, 4 and 5. We see that such an indicator as national defense has a growth dynamics, from 2009 to 2011 an increase in the amount of 94.36 billion rubles is predicted. And the forecast for the national security and law enforcement section will increase by 131.19 billion rubles. As a percentage, this figure is falling. The indicator "national defense" first falls significantly (by 1.2%), and then slightly increases (by 0.3%).

Diagram 3. The share of federal budget expenditures for 2009

Diagram 4. Share of federal budget expenditures for 2010

Diagram 5. Share of federal budget expenditures for 2011

The next section, the share of which is decreasing in the total volume of expenditures, is education, in 2009 it will amount to 4.04%. In dynamics, this figure is falling, by 2011 it will decrease by 0.67%. In monetary terms, this figure is increasing. It has to do with the implementation national project"Education" is also an increase in teachers' salaries. Allocations are made for advanced training and retraining of employees of federal budget institutions, the implementation of social protection measures for orphans and children left without parental care studying in these institutions, the allocations will ensure the provision of secondary vocational education students, higher education, namely the increase in budget places.

Health and sports is one of the most important indicators, because the ability of the country's population to participate in all spheres of production depends on the financing of this section. Those. by using labor resources, all the tasks set by the state, small organizations, factories, plants, etc. are being carried out.

It is predicted that in 2009 the volume of expenses under this section will amount to 349.87 billion rubles, in 2010 there will be an increase by 4.55%, and in 2011 by 5.05%.

The social policy section is of no small importance, but its financing occupies an insignificant share in the total volume of federal budget expenditures. This figure first increases and then decreases. It is predicted that in 2009 federal budget revenues will amount to 310.26 billion rubles, by 2011 this amount will decrease by 2.38 billion rubles. Financing is carried out at the expense of subventions of the Compensation Fund (section "Interbudgetary transfers").

Less funded sections of the federal budget, the share of which is from 0.14-1.12% in total expenditures, is occupied by: 1. culture, cinematography and the media; 2. housing and communal services; 3. environmental protection.

According to the changes in budget legislation, the structure of expenditures in 2010 and 2011 will include new article conditionally approved expenses. That is, a certain amount of funds that is not distributed by sections and articles, which will make it possible to plan new arising obligations. In accordance with Article 199 of the RF Budget Code, these expenditures must be at least 2.5% of the total federal budget expenditures for the first year of the planning period and at least 5% of the total federal budget expenditures for the second year of the planning period.

The last section of the federal budget expenditures is secret articles. If we talk about the content of this indicator, then these are articles that are not disclosed, and there is no access to this information, as well as funds that are not separated by articles, due to amendments to federal law"O federal budget for 2009 and the planning period of 2010 and 2011".

Conclusion

Monetary policy plays an important role in government policy. One of the most important ministries of the state is the Ministry of Finance, which conducts monetary policy in accordance with the tasks and goals of the development of the state and society. It is not surprising that quite a lot of different structures are subject to the Ministry of Finance, for example, such as the Central Bank. A lot of bodies (ministries, departments, committees, departments) pursue state policy in various areas, directly or indirectly related to the economy.

In a market system, the state is not a magical source of funds, but only a mechanism designed to ensure that some citizens (with a higher income) pay through taxes to others (having a lower income). In the new conditions, the main factors for the well-being of the individual are his initiative, the desire for personal activity, the readiness to choose options for economic decisions.

Conclusion - to choose from two evils.

In modern conditions, the implementation of the policy of "expensive" or "cheap" money in the classical form will rather lead to negative results. The main tasks of economic policy are to overcome the financial crisis and solve the accumulated structural problems, which are complicated by the lack of effective state institutions and their employees capable of effectively managing during a crisis (taking into account the fact that free financial resources provided by the state). On the whole, the “dear” money policy will make it possible in 2009 to keep the ruble exchange rate within the announced range and keep inflation within 20%.

The policy of "expensive" money presupposes the preservation of financial stability and the selection of enterprises according to the criterion of efficiency. However, there is a significant part of enterprises (of strategic interest, backbone, carrying out modernization, related to imports in their production cycle), for which a bank loan will not be available. Therefore, such a policy should be accompanied by selective subsidization of interest rates, tax incentives, and direct government funding. Meanwhile, it is precisely the choice of areas of support.

The policy of "cheap" money includes the expansion of demand and increased production activity, but provokes inflation and devaluation. The implementation of this policy assumes the growth of all sectors of the economy without selection of their efficiency (as was observed in 2006-2007), which preserves the problems and disproportions that have accumulated over the years of intensive economic growth. The policy of "cheap" money should be accompanied by the strengthening of foreign exchange control and control over the expenditure of public resources. The most important threat in its implementation is the limited state reserves. After their exhaustion, the policy of "cheap" money will be implemented through money emission and external borrowings. Additionally, in order to avoid inflationary “overheating”, it is necessary to develop a government securities market that allows sterilization. It will be possible to improve the structurally unbalanced industry with the policy of "expensive" money only with the use of targeted state programs. excess liquidity. It will be possible to improve the structurally unbalanced industry with the policy of "expensive" money only with the use of targeted state programs.

Interest rate policy will be a key component financial policy and a package of anti-crisis measures in the coming months. A key component of financial policy - since it determines the value of the money provided to the banking system and available Russian enterprises. And if banking system in the formation of demand for public money is largely focused on the return on investment, margin (the difference between attracted and placed funds) and risks, then the real sector - ultimately on the profitability of the business, and the population - on inflation. Various benchmarks in the value of money for institutional agents represent the most important contradiction in interest rate policy.

The progressive crisis (financial and in the real sector) leaves an extremely short period of time for choosing and clarifying the main directions of financial policy. The liberal version of the policy of high interest rates currently being implemented will in the near future face obvious consequences - the expansion of the use of "money surrogates" in settlements between enterprises (the spread of bill circulation, barter, as well as an increase in non-payments). The real sector has not yet responded to this policy on a large scale by increasing “bad” debts, since there are still expectations of financial assistance from the state. If such bailouts are not forthcoming and interest rates remain at their current high levels, rising NPLs as well as a lack of working capital will exacerbate the already significant decline in output recorded in January 2009.

Bibliography

1. Economy. Textbook for the course "Economic theory" / Under. ed. A.S. Bulatov. - / M .: Publishing house "BEK".

2. Burda M., Viplosh Ch. Macroeconomics. Per. from English. / Ed. V.V. Lukashevich, K.A. Refrigeration. - St. Petersburg: Shipbuilding. 2007.

3. Course of economic theory / Ed. A.V. Sidorovich. - / M .: Moscow State University. M.V. Lomonosov, "DIS".

4. McConnell K., Bru S. Economics. M.: Republic.

5. Mankiw N.G. Principles of economics. - / St. Petersburg: Peter Kom. 1999.

6. Mankiw N.G. Macroeconomics, Per. from English. - / M .: Publishing House of Moscow State University.

7. Mikloshevskaya N.A., Kholopov A.V. International economy. Textbook. - / M .: Moscow State University. M.V. Lomonosov, publishing house "Case and Service". 2000.

8. Fundamentals of economic theory. Textbook /Under. ed. V.D. Kamaev. - M.: Publishing house of MSTU im. N.E. Bauman.

9. Ovchinnikov G.G. Microeconomics. Macroeconomics. St. Petersburg: V.A. Mikhailov.