Country However, this growth is neither constant nor smooth. The economy is subject to fluctuations, which are often called business cycles or economic cycles.

Business cycles have long attracted the attention of economists who seek not only to identify patterns of cyclical development, but also to predict future economic development.

Economic cycle call the period of time between two identical states of economic conditions.

Economic (business) cycle— ups and downs in levels of economic (business) activity over several years. This is the period of time between two identical states of economic conditions.

Cyclical fluctuations can be experienced in various ways, but the most common is the analysis of business cycles using the example of fluctuations in the value (or). In Fig. 4.1 shows the diagram economic cycle. The trend line (or the average value of GDP over a number of years) shows the general direction of economic development over time, the GDP line shows the real fluctuations of this indicator.

Rice. 4.1. Business cycle

Economic cycles are characterized by the following important indicators:

• vibration amplitude— the maximum difference between the largest and smallest value of the indicator during the cycle (distance CD);
• cycle duration- the period of time during which one complete fluctuation in business activity occurs (distance AB).

By duration, cycles are divided into:

• short cycles, associated with the recovery in the consumer market, with fluctuations in wholesale prices and changes in firms' inventories. Their duration is 2-4 years;
• average cycles, associated with changes in the investment demand of enterprises, with long-term accumulation and improvement of technologies. Their duration is 10-15 years;
• long cycles (waves), associated with discoveries or important technical innovations and their dissemination. Their duration is 40-60 years.

The theory of long waves of the business cycle by Nikolai Kondratiev

The theory of long waves was developed in detail by an outstanding Russian economist Nikolai Dmitrievich Kondratiev(1892-1938) in a number of works, including the monograph “The World Economy and Its Conditions During and After the War” (1922) and the report “Large Cycles of Economic Conditions” (1925). N.D. Kondratiev from the end of the 28th century. Based on factual material, he identified three large waves:

• I. from the late 80s - early 90s. XVIII century until 1844-1851;
• II. from 1844-1851 from 1890-1896;
• III. from 1890-1896 approximately 1939-1945

If we continue the main trends outlined by N.D. Kondratiev, we can distinguish the fourth and fifth waves:

• IV. from 1939-1945 from 1982-1985
• V. upward wave from 1982-1985.

The main role in changing cycles, according to N.D. Kondratiev, scientific and technical innovations play a role. Thus, for the first wave (late 18th century), inventions and changes in the textile industry and iron production played a decisive role. Growth during the second wave (mid-nineteenth century) was primarily due to construction railways, the rapid development of maritime transport, which made it possible to develop new economic territories and transform agriculture. The third wave (beginning of the twentieth century) was prepared by inventions in the field of electrical engineering and was based on the mass introduction of electricity, radio, telephone and other innovations.

Continuing the analysis of N.D. Kondratiev, it can be assumed that the fourth wave (40s) is associated with the invention and implementation synthetic materials, plastics, electronic computers of the first generations, and the fifth (80s) - with the massive introduction of microprocessors, achievements of genetic engineering, biotechnology, etc.

It should be noted that in real life, one cycle overlaps with another, and several short cycles occur within longer oscillations.

Cycle phases

Cycles differ in duration and intensity, but all cycles go through the same phases:

There are 4 stages (or phases) in the structure of the cycle:

1. Climb. In the recovery phase, national income grows from year to year, declines to the natural level, and the amount of real capital grows, but this growth slows down. Also, due to increased consumer and investment demand, prices and rates increase.
2. Boom. The boom phase ends with a boom in which there is super-high and overloaded capacity, the price level, wage rate and interest rate are very high. Investments in production are almost non-existent due to the high cost of attracting resources.
3. Recession. Production and employment are declining. Due to decreased demand, prices for goods and services fall. Investments become negative because at this stage of the cycle, firms not only do not make new capital investments, but there is an increase in idle capacity. Many companies suffer losses or go bankrupt.
4. The bottom of the recession. The rate of decline is slowing down and at this stage stabilizing. The decline in production and growth in unemployment reach their maximum values. Prices are minimal. Only the strongest firms survived. The potential for future growth is accumulating - with low rates percent the volume of investment increases. The transition to the recovery stage occurs after a certain period of time, when investments begin to bring returns.

The four phases of the cycle considered may vary in duration or depth. So, for example, against the background of an upward long wave of the Kondratiev cycle, medium and short cycles will have a longer and more intense rise and a short-term slight decline. In a situation of a downward long wave, on the contrary, the declines will be deep and long, and the rises will be insignificant and short-lived.

It should be noted that not all cycles have macro behavior economic indicators coincides with the one described above. There are situations when, against the backdrop of a decline in production and rising unemployment, prices also rise. This situation is called stagflation and most often occurs with sudden changes economic situation. Stagflation was observed in the 70s. V developed countries ah during energy crises caused by rising oil prices. Another example is Russia in the 90s. after the start of economic reforms.

Crisis as the most important element of the cycle

The phase of economic downturn is also called the phase of crisis and depression. This stage is of particular importance for the economy, since after the crisis the composition of enterprises is renewed, the strongest and most efficient firms survive, new inventions appear and new ones are opened. economic opportunities. However, the crisis is also a major social upheaval - people lose their jobs, their incomes are reduced, and the standard of living of the population is reduced. Therefore, preventing or mitigating crises is one of the most important tasks of the state.

The cyclical development of the economy began to clearly manifest itself starting from the 19th century. The first cyclical crisis of overproduction occurred in England in 1825. In the 19th century. cyclical crises occurred in individual countries, they did not coincide in time and were caused by internal reasons for the development of countries or global non-economic events (in particular wars).

The first crisis called global, which began in the USA and spread to other capitalist countries in 1929 - 1933, was called the Great Depression. Among its causes were the deformed structure of the economy after the First World War, the disruption of traditional world economic ties, and the monopolization of the economy. The crisis manifested itself in a significant drop in production, high unemployment, and a significant reduction in world trade. It covered all sectors of industry (especially ferrous metallurgy, mechanical engineering, mining, maritime transport, etc.) and agriculture. The general nature of the crisis reduced the ability of countries to maneuver at the global level. The consequences of this crisis were overcome only as a result of the recovery caused by the Second World War.

After the Second World War, a rapid economic recovery began, associated with economic recovery and overcoming the destruction caused by the war. However, the restoration potential was exhausted quite quickly, and already in 1957-1958. A new global crisis broke out, affecting the United States the most. For the first time in the post-war period, total exports fell finished products, a series of structural crises began (in the raw materials industries, shipbuilding, etc.).

The reason for the next crisis(1974-1975), one might say, is random, not subject to patterns economic development. The impetus was the OPEC cartel raising prices for the oil they exported fourfold. Many developed countries are facing severe shortages energy resources. Oil importing countries were forced to reduce its consumption or look for substitutes and introduce energy-saving technologies. National output fell while prices rose, i.e. a situation of stagflation was observed.

In 1980-1982 a new crisis has broken out, the main victims of which were developing countries. Majority developing countries during the second half of the twentieth century. went through the stage of transition from the agrarian structure of the economy to the industrial one. Because they own funds To achieve this goal was not enough; they were forced to attract foreign capital. By the beginning of the 80s. external debt developing countries turned out to be too large, and many of them were unable to pay not only the principal amount of the debt, but also the interest on it.

90s turned out to be years of stagnation for most developed countries - production developed at a slow pace, fluctuations in unemployment and inflation levels were insignificant. However
90s became years of upheaval for countries of Eastern Europe and the USSR, which ceased to exist in 1991. The deep transformation crisis in Russia, which was a consequence of the transition from a planned method of farming to a market one, affected all sides economic life. During the reforms, industrial production decreased by approximately 60% (many economists talk about deindustrialization of the economy), the country experienced a period of high inflation, property inequality among citizens increased, and more than 30% of the population found itself below the poverty line.

To summarize the above, several features of cyclical development can be noted:

1. With the development of national economies and increasing international interdependence, crises from local (national) turn into global ones.
2. The time period between crises is shortening, i.e. the period of cyclic oscillations decreases.
3. The factor of randomness is added to the patterns of cyclical economic development.
4. Systemic (or transformational) crises do not fit into the generally accepted cycle scheme. As a rule, they are caused by institutional transformations occurring not only in economic, but also in other spheres of public life.

Cycle theories

Multiplier-accelerator model

This approach assumes that economic cycles reproduce themselves. Once started, they, like a swing, make endless oscillations. Only the reason for the fluctuations here is not external, but lies in the very essence of the cycle.

The mechanism of fluctuations is described as follows: an increase in demand for firms' products causes an increase in investment and, as a consequence, gross domestic product. Moreover, it increases by a greater amount than investment due to the effect. Further, an increase in GDP requires new investments both for the reproduction of increased capacities and for further development. The intensity of this process is determined by the size of the accelerator. At some point in time, all available resources become exhausted and become saturated. In this situation, the reverse process begins - investments are reduced, as a result, GDP is reduced, and there is a further decrease in investment according to the accelerator principle. Having reached a certain point, the process reverses.

This theory is difficult to apply to explain real economic cycles, since in life cyclical fluctuations are not regular; there are other factors that influence the system from the outside. Next theory tries to take into account the already mentioned factor of randomness.

Pulse-propagation mechanism

This model assumes that the economy is subject to random but recurring disturbances, shocks, or shocks. They can affect demand (for example, the mood of entrepreneurs or buyers, who may become optimistic or pessimistic; the behavior of the government), as well as supply (for example, an all-time low or high harvest, natural disasters, important inventions and discoveries, etc. .). Favorable shocks can cause GDP to increase, while unfavorable shocks can cause it to contract.

The list of potential shocks is endless. These shocks take the economy out of its current state and cause a chain reaction (Figure 4.2). The shocks in question, or impulses, change the conditions of demand or supply in the economy. After experiencing a random shock, national output begins to fluctuate according to the pattern described in the previous section until the next shock occurs. The discovery that economic cycles are generated by purely random factors was made in the late 20s and early
30s Russian economist Evgeniy Slutsky and Norwegian economist Ragnar Frisch, the latter of whom was awarded the Nobel Prize.

4.2. Pulse-propagation mechanism

Monetary concept of economic cycles

In the two models discussed above, cycles are caused by some change in demand or supply. In contrast to this monetary concepts relate fluctuations in economic activity to changes in the monetary sector.

The starting point of the economic cycle, according to this theory, is the growth in the supply of credit from the banking system. As a result, the interest rate decreases, investment increases, and, consequently, aggregate demand increases. This creates a recovery phase, which is accompanied by an increase in the price level. Over time, the economic recovery stops due to two main factors. Firstly, the excess reserves of commercial banks are reduced (their ability to issue loans is reduced), secondly, the country’s foreign exchange reserves are reduced, because due to high level import prices increase (outflow increases foreign currency), and exports are reduced (the inflow of foreign currency is reduced). These factors create a shortage in the money market, and the interest rate begins to rise and the volume of investment begins to decline. The recession phase begins: production and employment decline, the nominal wage rate decreases, the price level decreases, net exports increase, foreign exchange reserves and the monetary base increase. This sets the stage for a new increase in bank credit.

Evolutionary theory

The evolutionary theory of business cycles is the youngest and still least developed in economic science. There is a very limited number of works on this topic (theories of J. Schumpeter, K. Freeman, S. Glazyev, etc.).

4.3. Dependence of GDP on the emergence and development of macrogenerations

The basic idea of ​​evolutionary economics is the concept of economic natural selection, when the development of the most competitive economic entities occurs due to the displacement of other, weaker ones from the economic space. If the macro-level of the economy is represented as a set of economic subsystems, in each of which “natural selection” occurs, then these subsystems can be called macrogenerations. Macrogeneration can be interpreted as a part of the means of production that produces part of GDP and includes a certain technical level of production in various industries National economy. Its lifespan is limited in time, i.e. it is born, exists for a period of time and dies. The relationship between macrogenerations and GDP is presented in Figure 4.3.

The cyclical development of the economy can be represented as a change in macrogenerations. The emergence of new macrogeneration, caused, as a rule, by the development of scientific and technological progress, causes economic growth in the country. Old, already existing macro-generations are gradually disappearing from economic life, causing a reduction in production.

From the perspective of evolutionary economics, the following features of cyclical development can be distinguished:

• each new macrogeneration most often appears during periods of decline in production, or more precisely, at turning points from recession to recovery;
• during the growth of new macrogeneration, as a rule, there is an economic recovery, a slowdown in the growth of macrogeneration is accompanied by a cessation of recovery;
• from the moment of the emergence of a new macrogeneration until the birth of the next one, the GDP trajectory goes through both a rise and a decline phase, i.e. full economic cycle.

Other cycle theories

The cyclical development of the economy has long attracted the close attention of economists. The above theories do not exhaust the entire list of explanations of cycles. Other theories include the following:

1. Theory of periodic solar activity. The idea is that the sun greatly influences crop yields agriculture. In the event of drought and crop failure, agricultural production is reduced and spreads to related industries and beyond.
2. Model of interaction between savings and investment. The accumulation of savings by the population leads to a decrease in the interest rate, the volume of investment increases, and national production grows. Further, due to an increase in demand for investment, the interest rate rises, which reduces the attractiveness of investment and reduces national production.
3. Psychological theories. These theories consider people's behavior depending on the economic situation. People can have positive or negative assessments of future events and act according to their predictions. If economic agents expect the onset of a boom phase, they increase their activity, but if they predict a recession, then, accordingly, they reduce business activity.

When analyzing the real reasons causing the cyclical development of the economy, three main approaches can be distinguished:

1. The nature of economic cycles is explained factors outside the framework economic system . These are natural phenomena and political events.

2. The cycle is considered as internal phenomenon inherent in the economy . Internal factors can cause both a decline and a rise in economic activity at certain intervals. One of the decisive factors is the cyclical renewal of fixed capital. The reasons for cyclicality can also be periodic depletion of autonomous investments, weakening of the multiplier effect, fluctuations in volumes money supply, renewal of basic capital goods, etc.

3. The reasons for the cycles are seen in the interaction of internal states of the economy and external factors . External factors are considered as primary sources that provoke the entry into action of internal factors. External sources include the state.

Modern science knows more than 1380 types of cyclicity. The most frequently mentioned types are discussed in Table 4.1.

Table 4.1

Types of cycles

	Cycle length	Main features
		Amount of stocks – fluctuations in GNP, inflation, employment, commodity cycles
		Investment cycle – fluctuations in GNP, inflation and employment
		Income - immigration - housing - aggregate demand - income
Kondratieva		Technical progress, structural changes
Forrester		Energy and materials
Toffler	1000-2000 years	Development of civilizations

Economic science distinguishes several types of cycles:

1. Annual are associated with seasonal fluctuations under the influence of changes in natural and climatic conditions and the time factor.

2. Short-term cycles (lasting 40 months or more than 3 years) are caused by fluctuations in world gold reserves. This conclusion was made in relation to the conditions of the dominance of the gold standard.

3. Medium-term, or industrial cycles can have a duration of 7-12 years.

4. Construction cycles cover a 15-20 year period and are determined by the duration of the renewal of fixed capital. These cycles tend to shorten under the influence of scientific and technical progress factors that cause obsolescence of equipment and the implementation of an accelerated depreciation policy.

5. Large cycles last 50-60 years; they are caused mainly by the dynamics of scientific and technological progress.

Depending on the nature of economic downturns, their coverage various fields or branches of the national economy, the following are distinguished: types of economic crises :

1. Cyclical crises are periodically recurring recessions social production, causing paralysis of business activity in all spheres of the national economy and giving rise to a new cycle economic activity.

2. Intermediate crises are sporadically occurring declines in social production, which temporarily interrupt the stages of revival and recovery of the national economy. They do not give rise to a new cycle, are local in nature, and do not last long.

3. Structural crises are associated with a gradual and long-term increase in intersectoral imbalances in social production and are characterized by a discrepancy between the existing structure of social production and the changed conditions for the efficient use of resources. They cause long-term shocks and require a long period of adaptation to new conditions to be resolved (the energy crisis of the 70s of the 20th century increased prices by 4-5 times and forced the transition to energy-saving technologies).

4. Partial crises are associated with a decline in economic activity within large areas of activity. We are talking about money circulation and loans, banking system, stock and foreign exchange markets(world currency crisis of the 70s of the XX century and the transition to a floating exchange rate system).

5. Industry crises are characterized by declines in production and curtailment of activities in one of the industries (for example, in the coal, steel, textile industries).

6. Seasonal crises are caused by the influence of natural and climatic factors that disrupt the accepted rhythm of economic activity (late spring for agriculture and public utilities, lack of fuel).

7. World crises are determined by the coverage of both individual industries on a global scale and the entire world economy.

Until the 50s. XX century During crises, there was a general decline in the price level associated with a fall in effective demand and an increase in unemployment. In present day the monopolistic sector of the economy contributes to rising prices. Such a drop in production while inflation persists is called stagflation.

Causes of average cyclical fluctuations.

Cyclicity in development market economy is explained, first of all, by the action of internal factors inherent in the system itself. The mechanism of the “invisible hand” of the market, based on economic laws (laws of supply and demand, competition, capitalist accumulation), spontaneously regulates macroeconomic equilibrium. At the same time, the desire of economic agents to maximize profits, expand the scale of production, and increase investment as incentives for economic development leads to a state where the aggregate supply goes beyond the limits of market demand. Most economic theorists believe that crises of overproduction are caused by a serious violation of the relationship between aggregate demand and aggregate supply. At the same time, through economic crisis and measures taken to get out of it, balance is restored. There is a massive renewal of fixed capital, and the sectoral structure of the economic system is being improved. E. Hansen connects the causes of economic downturns and booms with the influence of the investment cycle.

In studies of the causes of economic cycles, the approach according to which cycles are the result of random influences on the economic system, so-called impulses, or shocks that disrupt economic equilibrium and cause response fluctuations, has now become widespread.

These ideas were first expressed by the Soviet economist Yevgeny Slutsky in 1927. A similar study was carried out by the Norwegian scientist Ragnar Frisch and was reflected in his work “Problems of the Propagation of Impulses in Economics,” published in London in 1933. There are several types of impulses:

1) supply shocks affecting production. These include technological shifts, climate change, the discovery of new sources of raw materials, fluctuations in world prices for raw materials, etc.;

2) shocks associated with decisions of government authorities at the macro level and affecting mainly demand. This is fiscal and monetary policy, exchange rate fluctuations, interest rates;

3) shocks to private sector demand, such as changes in investment and consumer spending this sector of the economy.

The listed shocks arise within the country and affect economic development through international trade and financial relations.

Keynes considered the main source of impulses causing economic fluctuations to be investment spending, which, due to a certain “entrepreneurial instinct” for risk, is characterized by instability. As a result, shifts occur in aggregate demand, and, consequently, in aggregate supply.

In investment theory, the multiplier-accelerator model is widely used by Western economists, which explains the dynamics of investment by the action of the accelerator mechanism, i.e. investments are affected not by the volume of output itself, but by its fluctuations.

Nobel Prize winner English economist J. Hicks believes that the main reason for fluctuations should be sought in the impact that changes in output (or income) have on investment, which, in fact, is the acceleration effect. In his opinion, a commercial and industrial boom is nothing more than a period of intensive capital accumulation, and a recession is simply a suspension of accumulation.

Large cycles of market conditions.

According to the concept of “large cycles of conjuncture”, developed by the Russian scientist N.D. Kondratiev (1892-1938), economic development, along with medium and short cycles, is characterized by long-term long-wave fluctuations, covering a period from 45 to 60 years. To this conclusion N.D. Kondratiev came from an analysis of statistical data (price dynamics, wages, foreign trade turnover, coal mining, gold production, iron and steel production, etc.) of the economic development of England, the USA, France over 100-150 years. He noted that the cycles of dynamics of these indicators coincide quite closely in time and are interrelated to a certain extent. Thus, price dynamics reflect the processes of replacement of fixed capital and the cyclical nature of investments.

As a result of research by N.D. Kondratiev identified the following large cycles of market conditions:

Kondratiev considered large cycles as a violation and restoration of economic equilibrium over a long period and believed that “the main reason lies in the mechanism of accumulation, accumulation and dispersion of capital sufficient to create new basic productive forces.”

He identified a number of patterns in the development of large cycles:

Before and at the beginning of the upward wave of each major cycle, profound changes are observed in technology (which is, in turn, preceded by significant technical discoveries and inventions), in involvement in world economic ties new countries, changes in gold production and money circulation;

1) during the periods of the upward wave of each major cycle there are greatest number social upheavals (wars and revolutions);

2) periods of an upward wave of each major cycle are accompanied by a long-term and especially sharply identified depression in agriculture;

3) during the upward wave of large cycles, average capitalist cycles are characterized by the brevity of depressions and the intensity of booms;

4) during the downward wave of large cycles, the opposite picture is observed.

Kondratiev’s conclusions were confirmed in the further development of the economic situation. Long and deep crisis of 1929-1933. unfolded during the downward wave of the large cycle that began in late XIX V.

About fifty years later, in 1973-1975. Once again, against the backdrop of a downward wave, the deepest and most destructive decline in production in recent decades occurred.

Economic growth in the 80-90s. in developed countries occurred in the context of the unfolding fifth technological order ( modern stage NTR), which determined the beginning of a new upward wave of a large cycle.

After N.D. Kondratiev's study of the long-wave cycle was carried out by such famous scientists as J. Schumpeter, S. Kuznets, K. Clark, W. Mitchell and others. Among modern Russian economists, it should be noted Y. Yakovets, L. Klimenko, S. Menshikov, S. Glazyev. It has been confirmed that transitions from one phase of a large cycle to another are associated with technological revolutions and structural changes in the economy. However, the theory of long waves is not universal. It has been subject to critical analysis many times. As you know, life makes numerous amendments to various concepts of social development. At the same time, the theory of long-wave cycles helps to study and predict general patterns of socio-economic development.

Fluctuations in economic activity (economic conditions), consisting of repeated contraction (economic downturn, recession, depression) and expansion of the economy (economic recovery). Cycles are periodic, but usually irregular. Usually (within the framework of neoclassical synthesis) they are interpreted as fluctuations around the long-term trend of economic development.

The deterministic point of view on the causes of economic cycles comes from predictable, well-defined factors that are formed at the stage of recovery (recession factors) and recession (recovery factors). The stochastic point of view proceeds from the fact that cycles are generated by factors of a random nature and represent the reaction of the economic system to internal and external impulses.

Usually isolated four main types economic cycles:

Kitchin short-term cycles(characteristic period - 2-3 years);
medium-term Juglar cycles(characteristic period - 6-13 years);
Kuznets rhythms (characteristic period - 15-20 years);
Kondratieff long waves(characteristic period - 50-60 years).

Phases

Business cycles have four relatively clearly distinguishable phases: peak, decline, bottom (or “nadir”) and recovery; but to the greatest extent these phases are characteristic of Juglar cycles.

Business cycles in the economy

Climb

The rise (revival) occurs after reaching the lowest point of the cycle (bottom). Characterized by a gradual increase in employment and production. Many economists believe that this stage is characterized by low inflation rates. Innovations are being introduced in the economy with a short payback period. The demand deferred during the previous recession is being realized.

Peak

The peak, or top of the business cycle, is the “high point” of an economic expansion. During this phase, unemployment usually reaches its peak low level or disappears completely, production capacities operate at maximum or close to maximum load, that is, almost all the material and labor resources available in the country are used in production. Typically, although not always, inflation increases during peaks. The gradual saturation of markets increases competition, which reduces profit margins and increases average term payback. The need for long-term lending is increasing with a gradual decrease in the ability to repay loans.

Recession

A recession (recession) is characterized by a decrease in production volumes and a decrease in business and investment activity. As a result, unemployment increases. Officially, a decline in business activity lasting more than three months in a row is considered a phase of economic decline, or recession.

Bottom

The bottom (depression) of the economic cycle is the “low point” of production and employment. It is believed that this phase of the cycle usually does not last long. However, history also knows exceptions to this rule. The Great Depression of the 1930s, despite periodic fluctuations in business activity, lasted 10 years (1929-1939).

A characteristic feature of cyclical development is that it is, first of all, development, and not fluctuations around a certain constant (potential) value. Cyclicality means development in a spiral, not along vicious circle. This mechanism of progressive movement in its various forms. The economic literature emphasizes that cyclical fluctuations occur around the trajectory of long-term growth (secular trend).

Causes

The theory of real business cycles explains recessions and recoveries by the influence of real factors. In industrial countries, this may be the emergence of new technologies or changes in prices for raw materials. In agricultural countries - harvest or failure. Force majeure situations (war, revolution, natural disasters). Anticipating a change in the economic situation for better or worse, households and firms en masse begin to save or spend more. As a result, aggregate demand decreases or increases, turnover decreases or increases retail. Firms receive fewer or more orders for the manufacture of products, and production volume and employment change accordingly. Changes business activity: firms begin to reduce their range of products or, on the contrary, launch new projects and take out loans for their implementation. That is, the entire economy fluctuates, trying to reach equilibrium.

Apart from hesitation aggregate demand There are other factors that influence the phases of the economic cycle: changes depending on the changing seasons in agriculture, construction, the automotive industry, seasonality of retail trade, secular trends in the economic development of the country, depending on the resource base, the size and structure of the population, proper management.

Impact on the economy

The existence of the economy, as a set of resources for steadily growing consumption, has an oscillatory nature. Fluctuations in the economy are expressed in the business cycle. The “delicate” moment of the economic cycle is considered to be a recession, which, at some scale, can turn into a crisis.

The concentration (monopolization) of capital leads to “wrong” decisions on the scale of the economy of a country or even the world. Any investor strives to receive income from his capital. The investor's expectations for the amount of this income come from the rise-peak stage, when income is maximum. At the stage of recession, the investor considers it unprofitable for himself to invest capital in projects with a profitability lower than “yesterday’s”.

Without such investments (investments) is reduced production activity, as a consequence, the solvency of workers in this sphere, who are consumers of goods and services in other spheres. Thus, the crisis of one or more industries affects the entire economy as a whole.

Another problem of capital concentration is the withdrawal of the money supply (money) from the sphere of consumption and production of consumer goods (also the sphere of production of the means of production of these goods). Money received in the form of dividends (or profits) accumulates in investors' accounts. There is a lack of money to maintain the required level of production, and as a consequence, a decrease in the volume of this production. The unemployment rate is growing, the population is saving on consumption, and demand is falling.

Of the economic sectors, the service sector and non-durable goods industries are somewhat less affected by the devastating effects of an economic downturn. The recession is even helping to intensify some types of activity, in particular increasing the demand for the services of pawnshops and lawyers specializing in bankruptcy. The most sensitive to cyclical fluctuations are firms that produce capital goods and consumer goods durable.

Not only are these firms the hardest hit by a business downturn, but they also benefit the most from an economic recovery. There are two main reasons:

• the ability to postpone purchases;
• market monopolization.

The purchase of capital equipment can most often be postponed to the future; During difficult economic times, manufacturers tend to refrain from purchasing new machinery and equipment and constructing new buildings. During a prolonged downturn, firms often choose to repair or upgrade outdated equipment rather than spend heavily on new equipment.

As a result, investment in capital goods declines sharply during economic downturns. The same applies to durable consumer goods. Unlike food and clothing, purchasing luxury car or expensive household appliances can be put off until better times. During economic downturns, people are more likely to repair rather than replace durable goods. While sales of food and clothing also tend to decline, the decline is typically smaller compared to the decline in demand for durable goods.

Monopoly power in most capital goods and durable consumer goods industries stems from the fact that the markets for these goods are typically dominated by a few large firms. Their monopoly position allows them to keep prices the same during economic downturns, reducing production in response to falling demand. Consequently, falling demand has a much greater impact on production and employment than on prices. A different situation is typical for industries producing short-term consumer goods. These industries typically respond to falling demand by lowering prices overall, since no single firm has significant monopoly power.

History and long cycles

Business cycles are not truly "cyclical" in the sense that the length of the period from, say, one peak to another has fluctuated significantly throughout history. Although economic cycles in the United States lasted on average about five years, cycles lasting from one to twelve years were known. Most pronounced peaks (measured as percentage increase above trend economic growth) coincided with the great wars of the 20th century, and the deepest economic recession, excluding the Great Depression, was observed after the end of the First World War.

At the end of the 20th century, the American economy appeared to have entered a period of prolonged decline, as evidenced by several economic indicators, in particular the level of real wages and the level of net investment. However, even with a long-term downward trend in growth, the US economy continues to grow; Although the country recorded negative GDP growth in the early 1980s, it remained positive in all subsequent years except 1991.

Symptomatic of the long-term recession that began in the 1960s, although growth rates have rarely been negative, the level of economic activity in the United States has almost never exceeded trend growth since 1979.

It should be noted that along with the described economic cycles, the theory also distinguishes long cycles. Long cycles in the economy are economic cycles lasting more than 10 years. Sometimes called by the names of their researchers.

Investment cycles(7-11 years old) studied by Clement Juglar. These cycles, apparently, make sense to consider as medium-term, rather than long-term.

Infrastructure investment cycles(15-25 years old) studied Nobel laureate Simon Kuznets.

Kondratieff cycles(45-60 years old) was described by Russian economist Nikolai Kondratiev.

It is these cycles that are most often referred to as “long waves” in economics.

Kitchin cycles

Kitchin cycles- short-term economic cycles with a characteristic period of 3-4 years, discovered in the 1920s by the English economist Joseph Kitchin. Kitchin himself explained the existence of short-term cycles by fluctuations in world gold reserves, but in our time such an explanation cannot be considered satisfactory. In modern economic theory the mechanism for generating these cycles is usually associated with time delays (time lags) in the movement of information that influence decision-making by commercial firms.

Firms react to improving market conditions by fully utilizing their capacity, the market is flooded with goods, after some time excessive stocks of goods are formed in warehouses, after which a decision is made to reduce capacity utilization, but with a certain delay, since information about the excess of supply over demand itself is usually received with a certain delay, in addition, it takes time to verify this information; It also takes some time to make and approve the decision itself.

In addition, there is a certain lag between the decision-making and the actual reduction in capacity utilization (it also takes time to implement the decision). Finally, another time lag exists between the moment the level of production capacity utilization begins to decline and the actual resorption of excess stocks of goods in warehouses. Unlike the Kitchin cycles, within the Juglar cycles we observe fluctuations not just in the level of utilization of existing production facilities (and, accordingly, in the volume inventory), but also fluctuations in the volume of investment in fixed capital.

Juglar cycles

Juglar cycles- medium-term economic cycles with a characteristic period of 7-11 years. Called by name French economist Clément Juglar, one of the first to describe these cycles. In contrast to the Kitchin cycles, within the framework of the Juglar cycles we observe fluctuations not just in the level of utilization of existing production facilities (and, accordingly, in the volume of inventory), but also fluctuations in the volume of investment in fixed capital. As a result, in addition to the time delays characteristic of Kitchin cycles, there are also time delays between the adoption of investment decisions and the construction of the corresponding production facilities (as well as between the construction and the actual launch of the corresponding capacities).

An additional delay is formed between the decline in demand and the liquidation of the corresponding production capacity. These circumstances determine that the characteristic period of Juglar’s ​​cycles turns out to be noticeably longer than the characteristic period of Kitchin’s cycles. Cyclical economic crises/recessions can be considered as one of the phases of the Juglar cycle (along with the phases of recovery, recovery and depression). At the same time, the depth of these crises depends on the phase of the Kondratieff wave.

Since no clear periodicity is observed, an average value of 7-10 years was taken.

Phases of the Juglar cycle

In the Juglar cycle, four phases are often distinguished, in which some researchers distinguish subphases:

• revival phase (start and acceleration subphases);
• phase of recovery, or prosperity (subphases of growth and overheating, or boom);
• recession phase (subphases of collapse/acute crisis and recession);
• phase of depression, or stagnation (subphases of stabilization and shift).

Rhythms of the Blacksmith

Blacksmith cycles (rhythms) last approximately 15-25 years. They were called Kuznets cycles after the American economist and future Nobel Prize winner Simon Kuznets. They were opened by him in 1930. Kuznets associated these waves with demographic processes, in particular the influx of immigrants and building changes, so he called them “demographic” or “building” cycles.

Currently, a number of authors consider Kuznets’ rhythms as technological and infrastructural cycles. As part of these cycles, there is a massive update of core technologies. In addition, large cycles of real estate prices coincide well with the Kuznets cycle using the example of Japan from 1980-2000. and the duration of the large half-wave of rising prices in the United States.

There was also a proposal to consider Kuznets rhythms as the third harmonic of the Kondratieff wave. There is no clear periodicity, so researchers take an average of 15-20 years.

Kondratieff cycles

Kondratiev cycles (K-cycles or K-waves) are periodic cycles of the modern world economy lasting 40-60 years.

There is a certain connection between long-term Kondratiev cycles and medium-term Juglar cycles. Such a connection was noticed by Kondratiev himself. Currently, there is an opinion that the relative correctness of the alternation of upward and downward phases of Kondratieff waves (each phase is 20-30 years) is determined by the nature of the group of nearby medium-term cycles. During the upward phase of the Kondratieff Wave, the rapid expansion of the economy inevitably leads society to the need for change. But the possibilities for changing society lag behind the demands of the economy, so development moves into a downward B-phase, during which crisis-depressive phenomena and difficulties force a restructuring of economic and other relations.

The theory was developed by Russian economist Nikolai Kondratiev (1892-1938). In the 1920s he drew attention to the fact that in the long-term dynamics of some economic indicators there is a certain cyclical regularity, during which phases of growth of the corresponding indicators are replaced by phases of their relative decline with a characteristic period of these long-term fluctuations of about 50 years. Such fluctuations were designated by him as large or long cycles, later called Kondratieff cycles by J. Schumpeter in honor of the Russian scientist. Many researchers also began to call them long waves, or Kondratieff waves, sometimes K-waves.

The characteristic wave period is 50 years with a possible deviation of 10 years (from 40 to 60 years). Cycles consist of alternating phases of relatively high and relatively low rates of economic growth. Many economists do not recognize the existence of such waves.

N. D. Kondratyev noted four empirical patterns in the development of large cycles:

Before the start of the upward wave of each major cycle, and sometimes at the very beginning of it, significant changes are observed in the conditions of the economic life of society.
Changes are expressed in technical inventions and discoveries, in changes in the conditions of monetary circulation, in the strengthening of the role of new countries in world economic life, etc. These changes to one degree or another occur constantly, but, according to N.D. Kondratiev, they occur unevenly and are most intensely expressed before the start of upward waves of large cycles and at their beginning.

Periods of upward waves of large cycles, as a rule, are much richer in major social upheavals and upheavals in the life of society (revolutions, wars) than periods of downward waves.
In order to be convinced of this statement, it is enough to look at the chronology of armed conflicts and coups in world history.

The downward waves of these large cycles are accompanied by long-term agricultural depression.

Large cycles of economic conditions are identified in the same unified process of economic development dynamics, in which medium cycles with their phases of recovery, crisis and depression are also identified.

Kondratieff's research and conclusions were based on empirical analysis of a large number of economic indicators of various countries over fairly long periods of time, covering 100-150 years. These indicators: price indices, government debt securities, nominal wage, indicators of foreign trade turnover, mining of coal, gold, production of lead, cast iron, etc.

Kondratiev’s opponent, D.I. Oparin, pointed out that the time series of the studied economic indicators, although they give greater or lesser deviations from average size in one direction or another during different periods of economic life, but the nature of these deviations, both according to a separate indicator and according to the correlation of indicators, does not allow us to distinguish a strict cyclical pattern. Other opponents pointed out N. D. Kondratiev’s deviations from Marxism, in particular his use of the “quantitative theory of money” to explain cycles.

Over the past 80 years, Nikolai Kondratiev’s theory of Long Waves has been enriched by the theories of creative destruction by I. Schumpeter, the theory of technical and economic cenoses by L. Badalyan and V. Krivorotov, the theory of technological structures developed by academicians S. Glazyev and Lvov, the theory of evolutionary cycles by Vladimir Pantin.

The theory of long waves, as well as Nikolai Kondratiev himself, was rehabilitated by the famous Soviet economist S.M. Menshikov in his work “Long waves in economics. When society changes its skin" (1989).

Dating of Kondratieff waves

For the period after the industrial revolution, the following Kondratieff cycles/waves are usually distinguished:

• 1 cycle - from 1803 to 1841-43. (moments of minimum economic indicators of the world economy are noted)
• 2 cycle - from 1844-51 to 1890-96.
• 3 cycle - from 1891-96 to 1945-47.
• 4th cycle - from 1945-47 to 1981-83.
• 5 cycle - from 1981-83 to ~2018 (forecast)
• 6 cycle - from ~2018 to ~2060 (forecast)

However, there are differences in the dating of the “post-Kondratieff” cycles. Analyzing a number of sources, Grinin L. E. and Korotaev A. V. give the following boundaries of the beginning and end of the “post-Kondratieff” waves:

• 3 cycle: 1890-1896 - 1939-1950
• 4 cycle: 1939-1950 - 1984-1991
• 5 cycle: 1984-1991 - ?

The relationship between Kondratieff waves and technological structures

Many researchers associate the change of waves with technological structures. Breakthrough technologies open up opportunities for expanding production and form new sectors of the economy, forming a new technological structure. In addition, Kondratieff waves are one of the most important forms of implementation of industrial production principles.

Summary system of Kondratieff waves and their corresponding technological structures as follows:

• 1st cycle - textile factories, industrial use of coal.
• 2nd cycle - coal mining and ferrous metallurgy, railway construction, steam engine.
• 3rd cycle - heavy engineering, electric power, inorganic chemistry, production of steel and electric motors.
• 4th cycle - production of cars and other machines, chemical industry, oil refining and internal combustion engines, mass production.
• 5th cycle - development of electronics, robotics, computing, laser and telecommunications technology.
• 6th cycle - possibly NBIC-convergence en (convergence of nano-, bio-, information and cognitive technologies).

After the 2030s (2050s according to other sources), the onset of a technological singularity is possible, which cannot be controlled. this moment analysis and forecast. If this hypothesis is correct, then Kondratiev cycles may end closer to 2030.

Limitations of the Kondratiev Model

Kondratieff waves have not yet received final recognition in world science. Some scientists build calculations, models, and forecasts based on K-waves (all over the world and especially in Russia), and a significant part of economists, including the most famous ones, doubt their existence or even deny them.

It should be noted that, despite the importance of the cyclical development of society revealed by N. D. Kondratiev for forecasting problems, his model (like any stochastic model) only studies the behavior of the system in a fixed (closed) environment. Such models do not always answer questions related to the nature of the system itself, the behavior of which is being studied. It is well known that the behavior of the system is important aspect in her study.

However, no less important, and perhaps even the most important, are aspects of the system associated with its genesis, structural (gestalt) aspects, aspects of the complementarity of the logic of the system with its subject, etc. They allow us to correctly pose the question of the reasons for this or that type of behavior system depending, for example, on the external environment in which it operates.

Kondratieff cycles in this sense are just a consequence (result) of the system’s reaction to the current external environment. The question of revealing the nature of the process of such a reaction today and revealing the factors that influence the behavior of systems is relevant. Especially when many, based on the results of N.D. Kondratiev, A.V. Korotaev and S.P. Kapitsa on the compression of time, predict a more or less rapid transition of society to a period of permanent crisis.

Economic cycle– these are ups and downs in people’s economic activity that are repeated over a long period, with a general tendency towards economic growth.

The economic cycle is usually divided into separate periods, or phases.

There are two main classifications of phases of cyclical economic development:

four-phase and two-phase models.

The four-phase cycle structure, usually called classical,

includes phases of crisis, depression, recovery and recovery. Each of them

characterized by certain quantitative and qualitative characteristics

peculiarities.

The main quantitative parameter of the cycle is the change in such volumetric indicators as gross domestic product (GDP), gross national product (GNP) and national income (NI).

The overall change in the volume of products produced (both material and

immaterial) serves as the basis for dividing the classical cycle into four phases.

In the first phase(a crisis) there is a drop (reduction) in production to a certain minimum level;

in the second(depression) the decline in production has stopped, but there is still no growth;

in the third(revival) there is an increase in production to the level of its highest pre-crisis volume;

in the fourth(climb) production growth goes beyond the pre-crisis level and develops into an economic boom.

Moreover, each of the four phases has specific and fairly typical

During crisis the demand for basic factors of production, consumer goods and services is reduced, and the volume of unsold products increases. As a result of decreased sales, prices, enterprise profits, household incomes and state budget revenues decrease, loan interest increases (money becomes more expensive), loans are reduced, and unemployment rises sharply.

During depression stagnation sets in in the economy, the reduction in investment and consumer demand stops, the volume of unsold products decreases, mass unemployment persists with low prices. But the process of updating fixed capital begins, more modern production technologies are being introduced, and the prerequisites for future economic growth are gradually being formed when so-called “growth points” arise.

During revival the demand for factors of production and consumer goods increases, the process of renewal of fixed capital accelerates, loan interest decreases (money becomes cheaper), sales of finished products and prices increase, and unemployment decreases.

During rise acceleration affects the dynamics of aggregate demand, production and sales, and the renewal of fixed capital. During this phase, active construction of new enterprises and modernization of old ones takes place, interest rates are reduced, prices are rising and profits, household incomes and state budget revenues are increasing. Cyclical unemployment decreases to its minimum.

When describing the phase structure of cyclicity itself, modern economists usually use another option that differs from the classical one.

In this version, the cycle breaks down into the following elements:

1) peak(the point at which real output reaches its highest volume);

2) reduction(period during which there is a decrease in output

product and which ends at the bottom or sole);

3) bottom or sole(the point at which actual output reaches its minimum volume);

4) climb(the period during which there is an increase in real output).

With such structuring of the economic cycle, ultimately only two main phases are distinguished in it: ascending and descending, i.e. rise and decline in production, its “rise” and “fall”.

The wave-like curve shown in the graph reflects cyclical fluctuations in output (GDP) with peaks B and F and a low point of decline (bottom) D. The time interval between two points that are at the same stages of fluctuation (in in this case between points B and F), is defined as one period of the cycle, which in turn consists of two phases: descending (from B to D) and ascending (from D to F).

In this case, the wavy curve of cyclic fluctuations is located on the graph around

a straight line of the so-called “secular” trend, depicting the long-term trend in economic growth of gross domestic product and having a positive slope.

Annex 1.

Nature of the theory		Principles of cyclicality
Theory of cosmic factors	W. Jevons	The emergence of economic cycles is associated with the 10-year cycle of solar activity, which predetermines economic and political activity
Theory of external natural and climatic factors	U Beveridge, W. Sombart	Impact of natural and climatic conditions on productivity
Psychological theory	V. Pareto, A. Pigou	Alternating periods of optimism and pessimism in human economic activity
Population underconsumption theory	T. Malthus, J. Sismondi, D. Hobson	The thrifty and the rich prosper in society, and they tend to consume less and save and save more
The theory of excessive accumulation of capital	M. Tugan-Baranovsky, L. Mises, F. Hagen	The production of means of production is significantly ahead of the production of consumer goods, which creates imbalances in the national economy and causes a crisis
Innovation theory	J. Schumpeter	The spasmodic nature of the implementation of scientific and technical progress achievements in the economy as a consequence of cyclicality
Monetary theory	R. Hawtrey, I. Fisher	Monetary irregularities
Industrial cycle theory		Crises are the inevitable companions of capitalism, through which its contradictions are temporarily resolved and accumulated imbalances are eliminated
Keynesian theory	D. M. Keynes	Excess savings and lack of investment
Monetary theory	M. Friedman	Instability of monetary circulation

Appendix 2.

Cycles of Kitchin, Juglar, Kondratiev

In modern economic science, about 1400 different types of cyclicity have been developed with a duration of action from 1–2 days to 1000 years.

The most popular of them are:

1.Cycles J. Kitchina – short-term(small) market cycles of 3–4 years. They are usually associated with the disruption and restoration of equilibrium in the product market due to periodic mass updating of the product range;

2.Cycles K. Juglara– medium term(industrial, business, business) economic cycles lasting about 10 years. It is during this period of time that, on average, fixed capital functions in production; the replacement of worn-out fixed capital in the economy proceeds continuously, but not at all evenly, since it is under the determining influence of scientific and technical progress. This process is combined with the flow of investment, which in turn depends on inflation and employment.

3.Cycles N. Kondratieva – long wave ( large) cycles spanning approximately 50 years. Their existence is associated with the need to change the basic infrastructure of the market economy: bridges, roads, buildings and structures that last an average of 40–60 years.

UNEMPLOYMENT: DEFINITION, CALCULATION METHODS, TYPES.

Reason: disturbance of macroeconomic balance.

Unemployed - a person who did not have a job during the period under review, was actively looking for work and is ready to start doing it. (ILO).

Labor force (economically active population) = Employed + Unemployed.

Unemployment rate= ratio of unemployed to labor force * 100%.

The economically active population is engaged in professional activities that generate income.

Forms of unemployment.

1 Friction.

Search and place of work that matches qualifications and individual preferences. This form of unemployment is usually limited to short periods. As citizens' wealth increases, frictional unemployment may increase.

2.Structural unemployment associated with technological shifts in the economy that change the structure of labor demand.

3. Natural rate of unemployment.

The combination of frictional and structural unemployment forms the level of natural unemployment corresponding to potential GDP or the situation of macroeconomic equilibrium.

Frictional unemployment is the result of labor market dynamics. Structural unemployment occurs due to territorial or occupational discrepancies in labor supply and demand. These forms of unemployment correspond to a favorable period of the economy. Natural unemployment is the best labor reserve for the economy.

Natural unemployment represents the best reserve for the economy work force. These workers have high mobility and are able to quickly move (to another industry or region) depending on production needs.

Based on the analysis of economic practices, economic science identifies several types of economic cycles. Austrian economistSchumpeterproposed a classification of economic cycles depending on their duration. Economic cycles are named after scientists who devoted special research to this problem.

So, economic cycles are usually classified according to their duration. Based on this criterion distinguish short-term, medium-term and long-term cycles.

TO short-term (small) cycles include cyclical phenomena lasting 3-3.5 years. These cycles are called Kitchin cycles . Small cycles arise due to the formation of an imbalance between supply and demand for market consumer goods. The elimination of such imbalances requires about 3 years, thereby determining the duration of this economic cycle.

TO medium term cycles include the so-called industrial(or classical) cycles ( Juglar cycles ) And construction cycles ( Kuznets cycles ).

Duration medium-term industrial cycles is 8-12 years. The industrial cycle is associated with the renewal of fixed capital and, accordingly, with investments. Renewal of fixed capital and investment give impetus to the development of this cycle. It is believed that the industrial cycle is associated with an imbalance of supply and demand, but not in the market for consumer goods, but in the market for means of production. Eliminating this imbalance requires the creation and implementation of new technology, which usually occurs at intervals of 8-12 years.

Medium-term construction cycles have nThe duration is 15-20 years, during which residential buildings and industrial structures are renewed. Theyare associated with housing construction and the situation on the market for certain types of buildings, in particular with fluctuations in supply and demand in the housing market and in the market for buildings. The pessimistic and optimistic moods of people are of no small importance here.

TO long-term cycles include Kondratiev cycles , we are talking about the so-called Kondratieff long waves(45-50 years old). It is believed that approximately once every 45-50 years, all the cycles discussed above coincide in their crisis phase, overlapping each other. Economists associate the existence of long waves with many factors - with major scientific and technological discoveries, demographic processes and processes in agricultural production, with the accumulation of capital to create new infrastructure in the economy.

In addition to the duration criterion, there are many principles that allow classifying economic cycles: by scope (industrial and agricultural); according to the specifics of manifestation (oil, food, energy, raw materials, environmental, currency, etc.); by deployment form (structural, sectoral); on a spatial basis (national, international).

If the normal course of the process of social reproduction is interrupted by a crisis, this means a difficult transitional state of the economic system, marking the beginning of the next business cycle. A similar pattern is characteristic of the development of a market economy. It should be remembered that any crisis causes an imbalance in economic systems.

Economic crises in this regard can be classified based onscale of imbalance, according to the regularity of imbalance And by the nature of the violation of the proportions of reproduction.

According to the scale of imbalance crises are identified in the economy are common, covering all national economy, And partial arising in any particular sphere or branch of the national economy.

According to the regularity of imbalance crises happen periodic, i.e. repeated regularly after a certain period of time, intermediate(these crises usually do not become the beginning of the next economic cycle and are interrupted at some stage of their development) and irregular arising due to specific reasons.

By the nature of the violation of the proportions of the structure of social reproduction allocate overproduction crises(imbalance between supply and demand in the market, when the supply exceeds the demand) and the crisis of underproduction(this is also an imbalance of supply and demand, but of the opposite nature - here the amount of demand will exceed the volume of supply).

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