Business cycle- These are ups and downs in the economic activity of people that repeat over a long period, having a general tendency towards economic growth.

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

There are two main classifications of the phases of the cyclical development of the economy:

four-phase and two-phase models.

The four-phase structure of the cycle, usually called the classical one,

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

are characterized by certain quantitative characteristics and qualitative

peculiarities.

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

The total change in the volume of output (both material and

non-material) serves as the basis for dividing the classical cycle into four phases.

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

in the second(depression) the decline in production is suspended, 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.

At the same time, each of the four phases is distinguished by specific and fairly typical

During crisis reduced demand for key factors of production consumer goods and services, the volume of unsold products is increasing. As a result of a decrease in sales, prices, profits of enterprises, household incomes and state budget revenues decrease, loan interest increases (money rises in price), loans are reduced, and unemployment is growing sharply.

During depression stagnation occurs in the economy, the reduction in investment and consumer demand stops, the volume of unsold products decreases, mass unemployment persists at a low level of prices. But the process of renewal of 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” emerge.

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

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

When describing the phase structure of the cyclicity itself, modern economists usually use another version 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(the period during which there is a decrease in output

products and which ends with a bottom, or a sole);

3) bottom or sole(the point at which the real output reaches the smallest volume);

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

With such a structuring of the economic cycle, in the end, only two main phases are distinguished in it: ascending and descending, i.e. rise and fall of production, its "rise" and "fall".

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

In this case, the wave-like curve of cyclic fluctuations is located on the chart around

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

Annex 1.

The nature of the theory		Principles of cyclicity
Theory of cosmic factors	W. Jevons	The emergence of economic cycles is associated with a 10-year cycle of solar activity, which predetermines economic and political activity.
Theory of external natural and climatic factors	Wu Beveridge, W. Sombart	The impact of natural and climatic conditions on productivity
Psychological theory	V. Pareto, A. Pigou	The alternation of periods of optimism and pessimism in the economic activity of people
Population underconsumption theory	T. Malthus, J. Sismondi, D. Hobson	Thrifty and rich people flourish in society, and they have the ability to consume less and save more, save
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 disproportions in the national economy and causes a crisis
Theory of innovation	J. Schumpeter	Spasmodic implementation of the achievements of scientific and technical progress in the economy as a result of cyclicality
Monetary theory	R. Hawtrey, I. Fisher	Monetary Violations
Theory of industrial cycles		Crises are the inevitable companions of capitalism, through which its contradictions are temporarily resolved and the accumulated disproportions are eliminated.
Keynesian theory	D.M. Keynes	Too much saving and too little investment
monetary theory	M. Friedman	Instability of money circulation

Appendix 2

Cycles of Kitchin, Jouglar, Kondratieff

In modern economics 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. Kitchin - short-term(small) market cycles of 3–4 years. They are usually associated with the disruption and restoration of equilibrium in the commodity market as a result of periodic mass renewal of the product range;

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

3. H cycles. Kondratiev – longwave ( 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 serve an average of 40–60 years.

UNEMPLOYMENT: DEFINITION, CALCULATION METHODS, TYPES.

Reason: violation macroeconomic equilibrium.

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

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

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

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

Forms of unemployment.

1 friction.

Search and a job that matches qualifications and individual preferences. This form of unemployment is usually limited to short periods. With the growth of the welfare of citizens frictional unemployment may increase.

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

3. The natural rate of unemployment.

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

Frictional unemployment is the result of labor market dynamics. Structural unemployment arises from territorial or professional discrepancies between supply and demand for labor. These forms of unemployment correspond to the 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 are highly mobile and able to move quickly (to another industry or region) depending on the needs of production.

The economy of any, even the most developed country, is not static. Her scores are constantly changing. The economic recession gives way to an upswing, the crisis - to peak growth values. The cyclical nature of development is characteristic of the market type of management. A change in the level of employment affects the purchasing power of consumers, which in turn leads to a decrease or increase in the price of products. And this is just one example of the relationship between indicators. Since most countries today are capitalist, such economic concepts, like decline and rise, are suitable for describing and developing the world economy.

History of the study of business cycles

If you plot the GDP curve of any country, you can see that growth this indicator is not permanent. Every economic cycle consists of a period of decline social production and his rise. However, its duration is not clearly defined. fluctuations business activity unpredictable and irregular. However, there are several concepts that explain the cyclical development of the economy and the time frame of these processes. Jean Sismondi was the first to draw attention to periodic crises. The "classics" denied the existence of cycles. They often associated a period of economic recession with external factors such as war. Sismondi drew attention to the so-called "panic of 1825", the first international crisis that occurred in peacetime. Robert Owen came to similar conclusions. He believed that economic decline was due to overproduction and underconsumption due to inequality in income distribution. Owen advocated government intervention and a socialist way of doing business. The periodic crises characteristic of capitalism became the basis of the work of Karl Marx, who called for a communist revolution.

Unemployment, economic recession and the role of government in solving these problems are the subject of study by John Maynard Keynes and his followers. It is this economic school systematized ideas about crises and proposed the first consistent steps to eliminate their negative consequences. Keynes even put them to the test in the US during 1930-1933.

Main phases

The economic cycle can be divided into four periods. Among them:

• Economic recovery (revival). This period is characterized by an increase in productivity and employment. The inflation rate is low. Shoppers are eager to make purchases that were put off during the crisis. All innovative projects quickly pay off.
• Peak. This period is characterized by maximum business activity. The unemployment rate at this stage is extremely low. Production capacities are loaded to the maximum. However, negative aspects also begin to appear: inflation and competition increase, the payback period of projects increases.
• economic recession). This period is characterized by a decrease in entrepreneurial activity. The volume of production and investment is falling, and unemployment is rising. A depression is a deep and prolonged recession.
• Bottom. This period is characterized by minimal business activity. At this stage, there is the most low level unemployment and production. During this period, the excess of goods that was formed during peak business activity is spent. Capital flows from trade to banks. This leads to lower interest rates on loans. Usually this phase does not last long. However, there are exceptions. For example, the Great Depression lasted ten years.

Thus, the economic cycle can be characterized as the period between two identical states of business activity. It must be understood that despite the cyclicality, in the long run, GDP tends to grow. Such economic concepts as recession, depression and crisis do not disappear anywhere, but each time these points are located higher and higher.

Loop Properties

The considered economic fluctuations differ both in nature and duration. However, they can distinguish several common features. Among them:

• Cyclicity is characteristic of all countries with market type management.
• Crises are inevitable and necessary. They stimulate the economy, forcing it to reach higher and higher levels of development.
• Any cycle consists of four phases.
• Cyclicity is due not to one, but to many different reasons.
• Due to globalization, today's crisis in one country inevitably affects the economic situation in another.

Period classification

The modern economy identifies more than a thousand different business cycles. Among them:

• Short-term cycles by Joseph Kitchin. They last about 2-4 years. Named after the scientist who discovered them. The existence of data was initially explained by changes in gold reserves. However, today it is believed that they are due to delays in obtaining the necessary commercial information for firms to make decisions. For example, consider the saturation of the market with a product. In this situation, manufacturers should reduce production volumes. However, information about the saturation of the market does not come immediately, but with a delay. This leads to a crisis due to the appearance of surpluses of goods.
• Medium-term cycles of Clement Juglar. They were also named after the economist who discovered them. Their existence is explained by the delay between the decision-making on the volume of investments in fixed capital and the direct creation of production capacities. The duration of the Juglar cycles is about 7-10 years.
• Rhythms by Simon Kuznets. They are named after the Nobel laureate who discovered them in 1930. The scientist explained their existence by demographic processes and fluctuations in the construction industry. However modern economists consider the main reason for Kuznets's rhythms to be technology upgrades. Their duration is about 15-20 years.
• Long waves They were discovered by the scientist, after whom they are named, in the 1920s. Their duration is about 40-60 years. The existence of K-waves is due to important discoveries and related changes in the structure of social production.
• Forrester cycles lasting 200 years. Their existence is explained by changes in the materials and energy resources used.
• Toffler cycles lasting 1000-2000 years. Their existence is associated with fundamental changes in the development of civilization.

Causes

Economic recession is an integral part of economic development. Cyclicity is due to the following factors:

• External and internal shocks. Sometimes they are called impulse effects on the economy. These are technological breakthroughs that can change the nature of the economy, the discovery of new energy sources, armed conflicts and wars.
• An unplanned increase in investments in fixed capital and stocks of goods and raw materials, for example, due to changes in legislation.
• Change in prices for factors of production.
• The seasonal nature of the harvest agriculture.
• The growth of the influence of trade unions, This means an increase in wages and an increase in job security for the population.

Recession in economic growth: concept and essence

There is still no consensus among modern scholars as to what constitutes a crisis. In the domestic literature of the times of the USSR, the point of view dominated, according to which economic recessions are characteristic only for capitalist countries, and under the socialist type of management, only “difficulties in growth” are possible. To date, there is a discussion among economists as to whether crises are characteristic of the micro level. The essence of the economic crisis is manifested in the excess of supply compared to aggregate demand. The recession manifests itself in mass bankruptcies, rising unemployment and a decrease in purchasing power population. A crisis is a violation of the balance of the system. Therefore, it is accompanied by a number of socio-economic upheavals. And to resolve them, real internal and external changes are needed.

Crisis Functions

Business cycle downturns are progressive in nature. It performs the following functions:

• Elimination or qualitative transformation of obsolete parts of the existing system.
• Approval of initially weak new elements.
• Strength test of the system.

Dynamics

During its development, the crisis goes through several stages:

• Latent. At this stage, the prerequisites are only maturing, they have not yet broken through.
• The collapse period. At this stage, the contradictions are gaining strength, the old and new elements of the system come into conflict.
• crisis mitigation period. At this stage, the system becomes more stable, prerequisites are created for a revival in the economy.

Conditions of the economic downturn and its consequences

All crises have an impact on social relations. During the recession state structures become much more competitive than commercial ones in the labor market. Many institutions are becoming more corrupt, further exacerbating the situation. Also increasing in popularity military service due to the fact that it is becoming harder for young people to find themselves in civilian life. The number of religious people is also growing. The popularity of bars, restaurants and cafes is falling during the crisis. However, people are starting to buy more cheap alcohol. The crisis has a negative impact on leisure and culture, which is associated with a sharp drop in the purchasing power of the population.

Ways to overcome recessions

The main task of the state in a crisis is to resolve the existing socio-economic contradictions and help the least protected sections of the population. Keynesians advocate active intervention in the economy. They believe that economic activity can be restored through government orders. Monetarists advocate a more market-based approach. They regulate volume. money supply. However, you need to understand that all these are temporary measures. Despite the fact that crises are an integral part of development, each firm and the state as a whole must have a developed long-term program.

Greetings, dear readers! I try to visit my grandmother at least once a month.

She still retains a clear mind and an indefatigable interest in events both local and global. Sometimes we can discuss various news with her for hours.

For example, last week we discussed with her the emerging negative trends in the country's economic development. I want to raise this topic with you, friends. Now I will tell you about the recession in the economy - what it is and what consequences ordinary citizens can feel.

What is a recession in the economy, its causes and consequences

A recession is a negative trend in macroeconomics (national economy), often preceding a crisis. This phenomenon is cyclical and is inevitable for any economic system.

Recession (Latin recessus - retreat) is a concept in macroeconomics that denotes a drop in production rates over a long period (from six months or more).

Warning!

The process is characterized by zero or negative dynamics of GDP (gross domestic product). A recession entails a decrease in business activity, a slowdown in economic development. The contraction of GDP is understood as a decrease in the volume of production of goods and a decrease in the volume of consumption.

A recession inevitably follows an upturn (boom in production), which is explained by the cyclical nature of any economic system.

IN general view the economic cycle consists of four phases - growth (rise), stagnation (stabilization, lack of any dynamics), recession (fall) and crisis (depression).

The duration of the economic cycle in the modern global world is 10–15 years, which can be traced by the global financial crises of the 70s, 90s and the last global crisis of 2008–2009.

Causes

There are several main causes of recession, depending on the level of development of the economy.

For resource-based economies, the decline in prices for oil, gas and other exported minerals is the reason for the decline. The price of raw materials falls, the budget receives less revenue, there is a deficit that needs to be compensated somehow.

Raised to compensate tax rates, spending on social needs (education, medicine, etc.) is reduced. Such actions further exacerbate the decline in production.

In developed (industrial and post-industrial) states, recession manifests itself as a result of a change in the technological order, for example, due to the emergence and development of information technologies.

Under technological order understands the level of development of engineering and technology, the main directions of development scientific and technological progress.

Attention!

These reasons for the emergence of a recession cannot be influenced, they arise due to the objective laws of the economy, therefore, a recession at the level of a single national economy will occur sooner or later.

A recession in one state can lead to a recession in other economies, which will lead to a global crisis.

There are reasons that arise under the influence of market participants. The recession in the economy may be caused by problems in the banking sector.

For example, commercial banks too many loans that are not being repaid. Then financial institutions forced to raise rates, raise funds in the foreign and domestic markets.

In a situation where there are too many such banks, the number of loans issued falls, therefore, enterprises cannot borrow money and, in the absence of funds, stabilize or curtail production.

Because of this, unemployment is growing, the population and companies do not repay loans, banks are tightening rules, the situation is vicious circle and gets worse.

Force majeure circumstances, such as a war or a sharp change in energy prices, can plunge the economy into a recession phase. The way out of stagnation is possible only with the participation of the state, which will “inject” money into the economy, supporting various industries and stabilizing the exchange rate national currency.

Consequences

The main consequences of a recession in the economy include the following:

• decline in production volumes;
• collapse of financial markets;
• reduction in the volume of loans issued;
• height interest rates on loans;
• rising unemployment;
• decline real income population;
• falling GDP.

The most powerful and critical consequence of a recession is the economic crisis. Due to the decline in production, the need for jobs and the number of workers is decreasing. This entails a wave of layoffs and rising unemployment. People begin to consume less, which leads to a decrease in demand for products and an increase in the decline in production.

The debt of citizens and organizations to banks is increasing, which, in turn, are tightening the procedure for issuing loans.

Advice!

The volume of lending to individuals and legal entities is decreasing, the volume of investments in industry and science is decreasing, and scientific and technological development is slowing down. A decline in production is followed by a market collapse valuable papers- shares of large industrial enterprises are losing sharply in price.

These events are followed by the depreciation of money - inflation, further price increases and a decrease in real incomes of the population. Which ultimately leads to dissatisfaction and a decrease in the quality of life.

The state is trying to find funds and increases external debt. In the absence of a sufficient amount of finance, current loans have to be refinanced and new ones taken.

All of these consequences are reflected in one indicator - the decline in GDP (gross domestic product), which directly depends on the volume of production within the country.

source: http://website/delatdelo.com/spravochnik/terminy/chto-takoe-recessiya-v-ekonomike.html

An economic crisis never happens unexpectedly. It is anticipated by a recession. Any economic system, even a progressive one, sooner or later enters a recession stage. A recession is undesirable but inevitable.

A recession is a prolonged, at first not very pronounced, decline in production and business activity, which eventually worsens and turns into a crisis.

The recession period is characterized by such phenomena as:

• negative dynamics of GDP (both the quantity of manufactured products and the demand for it decrease);
• low business activity;
• lack of progress in the economy.

Recession is the stage following the stage of rapid economic development. Since everything economic systems are cyclical, recession can be considered a natural process.

Warning!

It is known that in each economic cycle there are four phases. Rise and flourishing are inevitably followed by stagnation - a stage of stabilization and stagnation. Recession replaces stagnation. Ends " life cycle» system economic crisis.

It is useless to try to predict when a recession will start. Nevertheless, the government can prepare the country for it, take a kind of "amortization" measures that will partially neutralize the negative phenomena that accompany the recession. The crisis will come only if economic policy state will be ineffective.

Causes

The economic downturn does not happen all of a sudden. It is the result of many events and processes.

A recession can be caused by global and unexpected changes in the market, which, in turn, are provoked by political changes. Roughly speaking, armed conflicts or fluctuations in gas / oil prices on the world market may be to blame for slowing down production rates and reducing demand for any product.

Unfortunately, the Russian economy is obviously dependent on the cost of oil. As soon as market price oil is reduced, the budget begins to experience underfunding, which ultimately affects the volume of the gross domestic product.

Experts believe that a recession that develops according to such a scenario poses the greatest danger to the state, since it cannot be predicted and neutralized in time.

The second possible reason for the recession is a total decrease in production volumes. A serious decline in production was recorded in 2008. It amounted to more than 10%.

The lack of “extra” money for citizens and the decrease in their purchasing power also lead to a recession. True, it is believed that the recession caused by these reasons is quite surmountable and does not have such sad consequences as a recession provoked by wars or market shocks.

Attention!

Another factor in the occurrence of a recession is the outflow of capital and the lack of investment. Replenishment of the fixed capital of the state occurs at the expense of private enterprises.

If the government is interested in these injections, it must provide business with such conditions under which it could develop normally within the framework of the national economic system.

Consequences of the recession in the economy

Now let's list the consequences of the recession:

1. there is a collapse of financial markets;
2. the pace of production slows down;
3. banks limit the issuance of loans;
4. interest rates on loans are rising;
5. the number of unemployed is also growing;
6. incomes of the population are declining;
7. GDP is decreasing.

All these phenomena together lead to an economic crisis.

The result of the decline in production is a decrease in the need for workers. Industrialists fire people, and they can no longer find a new job. A decrease in income leads to a restriction of needs. As a result, the demand for goods that can be dispensed with decreases. Production does not experience any incentives for development.

Physical and legal entities become indebted to the banks. Circumstances force banks to limit the issuance of loans. Investment in research projects and industrial enterprises is reduced, the country begins to lag behind in terms of science and technology. Stagnation in the manufacturing sector affects the value of shares issued by industrial enterprises. They lose value.

The next stage of the crisis is characterized by an increase in inflation, the beginning of the devaluation of the national currency. Prices continue to rise and incomes continue to fall. The standard of living of the population is also falling, which leads to mass discontent.

The government seeks financial assistance from more prosperous countries. The external debts of the state are growing. To repay one loan, you have to take several others.

All these negative phenomena directly affect the volume of GDP. Its decline indicates the deterioration of the economic situation in the country.

It is noteworthy that among economists there is no consensus on the nature of the recession. Some believe that this phenomenon in itself is not critical, while others believe that recession, collapse and depression are synonymous.

source: http://website/www.temabiz.com/terminy/chto-takoe-recessija.html

Economic recession

What is an economic recession or just a recession? Recession (from Latin Recessus - retreat) is a decline in production, which is characterized by zero or negative growth in the main macroeconomic indicator - gross domestic product (GDP), lasting for six months or more.

Advice!

A recession is one of the phases of the economic cycle that always follows a period of economic growth, accompanied by the achievement of a peak point in business activity, and precedes the phase of an economic crisis and depression.

It is in this state, in a state of recession, that the economy of the vast majority of the countries of the world has found itself at the present time. Thus, economic growth necessarily replaces the recession of the economy.

Depending on the factors that serve as the beginning of the recession phase in the economy, there are three types of recession. In the first case, the recession of the economy occurs under the influence of unplanned and very deep changes in market conditions.

Wars or a sharp change in world prices for Natural resources or, to be more precise, oil. An economic recession caused by such phenomena is especially dangerous. Such a recession is impossible to foresee, to foresee, therefore they have a very painful effect on the country's economy.

The preconditions for the second type of recession are more of a political or even psychological nature. These include a decline in consumer confidence or growing uncertainty among entrepreneurs or investors.

Such a recession is less harmful to the country's economy, while the current situation is quite easy to correct by lowering interest rates or artificially creating some hype in the economy.

The third type of recession occurs when the economy loses its balance, and is characterized by a rapid increase in debt and a fall in quotations in the capital and stock markets.

The prerequisites for the emerging Lately the global economic downturn and, accordingly, the recession were an unprecedented increase in prices for commodities, caused by active consumption, unreasonably a large number of issued mortgage loans borrowers with a high degree of risk, as well as the rapid development of the activities of speculators who have created a whole world of fictitious capital.

Warning!

An economic recession inevitably leads to a crisis, and in the worst case, to a protracted depression.

It is impossible to avoid this process, but the state, which plays an important role in the process of economic recovery, can significantly shorten the time of the recession and reduce the scale of the consequences of the economic downturn in a single country and the world as a whole.

What is a recession in the economy

A recession is a depressive state of the economy, a phase of recession and deceleration of any constructive activity. characteristic feature recession is an increase in the unemployment rate, gross national product(GNP) tends to zero as production declines.

What does the word "recession" mean? Translated from English, recession is a “fall, decrease”. The word comes from the Latin recessus, which means retreat. In terms of business cycles, a recession is a recession after a boom, followed by a bottoming phase, followed by a boom, followed by a peak or boom again.

A deep recession is called a depression. However, these days the term is completely unpopular. More often talk about a recession. The most famous great recession or Great Depression occurred in the United States in 1929.

Since then, as the economist M. Rothbard notes, the US government was so afraid of a repetition of something like this that it literally banned the term "depression" and introduced the more everyday "recession". But over time, recessions began to occur more and more, so instead of them the concepts of recession, deviation, slowdown in production were introduced.

In the global economy, no recession goes unnoticed by other market players. Since in macroeconomics all countries are ultimately "tied" to a single market for sales and consumption. The largest world recession most recently occurred in 2008-2010.

Starting with the collapse of the US real estate market, the economy of the largest power on the continent of North America pulled the whole world with it. This recession has led to a reallocation of resources in the markets. People in all countries lost money, the savings of many sunk into oblivion.

Causes

By definition, the economy develops cyclically. A cycle of contraction (recession, recession) is followed by a cycle of expansion (rise). Due to the cyclical nature, it cannot be said that a recession is an unpredictable or out of the ordinary phenomenon. On the contrary, almost any recession can be predicted.

Attention!

In modern economic theory distinguish four types of economic cycles different duration stages (rise, peak, decline, depression) - from 2-3 to 50-60 years. In general, it cannot be said that cycles are so clearly measured; in life, one stage can last longer or less, depending on current world events.

More named cyclicity can be traced in the model of the French physician and economist of the 19th century C. Juglar. The duration of each phase, including the recession phase, is from 6 to 12 years.

A typical recession is a decline in business activity for a period of three months or more. Since a recession follows an economic peak, the reasons can be attributed to the emergence of new technologies, and increased yields, and changes in prices for raw materials. Force majeure in the form of war can also start a recession, natural disaster or revolution.

The recession is growing like an avalanche: anticipating a possible recession, consumers begin to buy more or, conversely, save, firms - to produce more or reduce production rates, in a word - there are massive fluctuations in business activity.

The market is trying to find a new equilibrium point, as a result, this leads to a decline in production and a decrease in investment activity.

Types

There are three types of recession depending on the causes.

1. political recession. It is based on psychological reasons. It is associated, as a rule, with the growth of investor uncertainty and doubts of entrepreneurs. Consumer confidence is declining.
2. debt recession. Associated with an increase in the external debt of the country. It is characterized by a fall in stock prices and an outflow of funds. It may take many years.
3. Force majeure recession. Occurs due to powerful factors, such as war or a sharp decline in oil prices.

Each type of recession is surmountable and will pass in any case, the question is how long this economic phase will drag on.

The first type is easily eliminated by increasing the confidence of citizens, for example, by lowering interest rates. The second type may take years to get out and move from depression to growth. It is associated with the restructuring of the economy of a country or an entire region and finding a new point of balance.

The third type of recession, on the one hand, is the most unpleasant because of the suddenness of its occurrence, on the other hand, measures must be selected depending on the factors that provoked the economic downturn.

signs

How to understand that the recession of the economy has already begun? A number of characteristics that indicate the beginning of a recession followed by stagnation:

• increase in the level of inflation in the country;
• rising unemployment;
• falling stock indices;
• slowdown in production;
• outflow of capital abroad.

According to another classical definition, the signs of a recession are:

1. the fact that a phase follows a boom;
2. decline in business activity;
3. decline in production.

Above economic indicators understandable to specialists, but how to see the impending recession for ordinary citizens?

Due to the fact that the prices of well-known goods have crept up, the purchasing power, i.e. how many goods can be bought for the same money as before, fell. Inflation has increased (you can learn about this from the news), unemployment is growing.

Advice!

The recession period can last from three to ten years. Its duration can be roughly judged by the boom cycle before it. The end of the recession means that the economy has bottomed out. the deepest withdrawal into the minus relative to typical economic indicators.

The end of a recession, although it leads to a low point - a bottom or a depression - means the beginning of economic growth after. The economy will be rebuilt, and a new wave of prosperity and prosperity will begin.

Consequences

From the point of view of economic theory, a recession in itself is not something harmful or malicious. There is no need to be afraid that it will happen. Just the opposite expectation that growth will be constant is erroneous, and leads to the collapse of hopes.

Growth is replaced by boom, but they cannot last forever, some economic instruments become imperfect, new technologies and productions appear. And this is good.

A recession is in some way a “cleansing” of the economic organism of a country or a number of states. It helps the economy to rejuvenate, to reach new round development.

For ordinary citizens, the consequences of the recession are:

• job loss;
• decrease in purchasing power;
• depreciation of money;
• decrease in the variety of goods due to the decline in production.

In short, it's time to tighten your belts. However, if we look at this period as a time to get rid of the unnecessary and rebuild for a more suitable wave of economic growth - to undergo additional training in order to then find a new, better-paid job, expand career opportunities, review and reduce family expenses, start buying only what what is really needed is that, having come out of depression, you will not be in the position of a victim beaten by economic squabbles, but will begin to harvest the fruits of success laid down during the recession.

source: http://website/business-poisk.com/recessiya-v-ekonomike.html

What is a recession: definition, signs and characteristics, types of recession, causes and consequences

Recession (from Latin recessus - retreat) is a phase of the economic cycle, characterized by moderate, non-critical recession production in the country, also called a recession slowdown GDP growth or its decline, accompanied by an increase in unemployment, a decrease in bank lending and a decrease in investment in fixed assets. A recession is usually the forerunner of a crisis in the economy.

Why does a recession occur?

Recessions can be caused by:

1. the natural development of the economy, when after strong growth, having exhausted the possibilities for moving up, the economy needs a break;
2. wars and civil strife;
3. a sharp change in commodity prices, in particular oil;
4. undermining customer confidence;
5. uncertainty of entrepreneurs and investors;
6. growth of domestic and external debt(possible consequence - default);
7. falling stock and capital prices.

What are there?

Depending on the causes, there are three types of recession:

Unplanned recession. This type of recession occurs as a result of some unexpected events: wars, a sharp drop in the world price of oil, gas and other minerals. As a result, the lack of financial budget funds and a decline in GDP.

Recession on a political or psychological level. This type of recession occurs as a result of increased distrust of the consumer population, entrepreneurs and capital holders. It is a consequence of a decrease in buying activity, a decrease in investment and a decrease in the value of securities.

Recession as a consequence of the country's external debts. As a result of such debt, there is a decline in prices and an outflow of Money from the country. Such a recession is recognized as the most dangerous and can last for many years.

What is characterized?

The hallmarks of a recession are:

• Gradual, without sharp jumps, rising unemployment.
• The volume of industrial production is falling, but enterprises are operating, producing products in smaller volumes.
• Falling stock indices.
• Growth of inflation indicators.
• Growth of capital outflow abroad.

IN modern economy the recession is characterized by an uncritical drop in key indicators over two quarters.

When are you coming?

The economic cycle consists of four phases:

1. growth (rise),
2. stagnation (stabilization, lack of any dynamics),
3. recession (fall)
4. crisis (depression)

The duration of the economic cycle in the current realities is 10-15 years.

What are the consequences of a recession?

The main characteristic consequences of a recession are:

• Decline in production volumes in the state.
• The collapse of financial markets.
• Reducing the number and size of loans issued by banks.
• Rising interest rates on loans.
• Rising unemployment.
• Reducing the income of citizens.
• Rising inflation.
• Systemic price increase.
• Increase in public debt.
• Falling GDP.

source: https://fortrader.org/birzhevoj-slovar/ekonomicheskie-ponyatiya/recessiya.html

What is a recession in simple words - causes and significance in the economy

The question of what is a recession in the economy of the state may excite the majority of its inhabitants, who are interested in the situation. Understanding this economic process will allow you to realize what impact it has on the economy and life of the state and whether it is worth fearing.

concept

There are many definitions of this economic term, so you should familiarize yourself with the most significant ones. Recession is one of the phases of the economic cycle, which is the precursor of the financial crisis.

Attention!

Recession is a term related to the macroeconomics of the state, it denotes a decline or a noticeable reduction in production rates, following immediately the so-called boom, characterized by an indicator of gross domestic product equal to zero or even having a negative value for 6 or more months.

A recession is a moderate, non-critical, decline in production indicators, entrepreneurial activity and economic development, usually associated with a decline in GDP.
A recession is a slowdown or fall in the growth rate of the gross domestic product.

Recession is one of the phases of the economic development cycle, which is the next after the recovery of the economy, accompanied by the achievement of a maximum indicator of economic activity. This phase is the precursor to a depression or crisis.

A recession is a state of the economy when GDP has been declining for 2 or more quarters, i.e. factories begin to reduce output, stores sell less, and, accordingly, buyers buy less.

Advice!

A recession is a serious reduction in business activity in a country, which is accompanied by a large number of negative consequences (unemployment, falling position on the stock exchanges, reduction in investment, etc.).

A recession is inevitably accompanied by three main signs:

1. Phase economic life, following immediately after the rise or boom;
2. Accompanied by a contraction in economic activity;
3. Leads to a reduction in production.

In many definitions, there is a mention that a recession is a phase of the economic development cycle, and the cycle itself consists of 4 main phases:

• Climb.
• Stagnation.
• Recession.
• Economic depression.

The duration of all phases of the economic cycle, as practice shows, is about 10–15 years.

The recession does not mean at all that important indicators stopped growing. This phase may indicate that the growth rate of the main indicators has simply decreased over the course of six months. Usually a recession is a precursor to a crisis, but if everything is done in time necessary measures, then such consequences can be avoided and the state of affairs can be brought back to normal.

Reasons for the onset

This phase of the economy may come as a result of a whole list of various factors, ranging from the cost of petroleum products to the number of unemployed in the country. The main reasons for its occurrence are:

The emergence of conditions favorable for the development of a recession due to unplanned domestic economic changes. Thus, this state of the economy can be caused by non-economic events in the country, but by political ones, or by changes in prices at the world level for natural resources, and, in particular, for oil.

Russian economic area is dependent on the prices of this mineral, and in the event of a serious drop in its value, the country's budget loses a significant amount, which, in general calculations, leads to a fall in GDP.

Economists argue that it is this recession that is the most dangerous due to the impossibility of predicting it in order to take measures in advance aimed at supporting the economy.

The fall in the pace of industrial production processes, which inevitably entails a recession.
Provoking the transition of the economy to a recession phase can be a decrease in the income of the population, which leads to a decrease in the ability to buy and worsens economic situation countries.

Warning!

This type of recession is not the worst, and economists argue that it can be dealt with quickly and easily, preventing a crisis.

A recession may be the result of an outflow of capital abroad or a reduction in the volume foreign investment And state capital. As a rule, most of the investments are attracted by private entrepreneurs. And in order to avoid such a recession, the government should create such conditions that the entrepreneur seeks to invest in the national economy.

Kinds

Economists distinguish three main types of recessions, depending on the reasons for its onset:

Unplanned recession brought about by unexpected changes. Such events can be: the onset of war, a sharp decline in the world cost of oil, gas and other minerals. The result of such events is a deficit of financial budgetary funds and a decrease in the level of GDP.

Exactly this species recession is the most dangerous because it is simply impossible to predict, and even more difficult to determine an effective exit technique.

Recession at the political level or psychological resulting from the increased distrust of the consumer population, entrepreneurs and capital holders. It is a consequence of a decrease in buying activity, a decrease in investment and a decrease in the value of securities.

This type of economic recession can be overcome quite simply by restoring the confidence of buyers, which is done by lowering prices, interest rates and by implementing various psychological techniques in practice.

Recession as a consequence of the country's external debts. As a result of such debt, there is a decrease in prices and an outflow of funds from the country. Such a recession is recognized as the most dangerous and can last for many years.

In addition to this causal classification, there is a division of recessions into types depending on the shape of the graph reflecting changes in GDP indicators:

1. V recession. Characterized by a fairly powerful and high-speed decline in GDP, which under such conditions does not reach depression. The fall in such circumstances is pronounced, the only one and subsequently leads to the return of GDP to its previous level.
2. U recession. GDP in such a situation has a fairly long and stable position at a low level without major movements on the schedule, both up and down, with a quick recovery in the future.
3. W recession. As a result of this phase of the economy, there is a rather short-term jump in the growth graph and GDP development high in the middle of a recession. The schedule of such a recession resembles several consecutive Type V recessions.
4. L recession. In such a situation, a fairly rapid decline in GDP is observed, which is replaced by a long and fairly smooth recovery.

Characteristics of an Economy in Recession

It is possible to identify that in the country such a stage of the economic process as a recession has already begun by the presence of a list of its obvious factors:

• Gradually, without sharp jumps, the unemployment rate increases.
• A clearly noticeable production decline, but at the same time, production does not stop, but function, providing citizens with the necessary products, but in a smaller volume.
• Stock indices began to fall.
• Inflation rates are on the rise.
• There is a significant transfer of funds abroad.

At the stage of economic recession, not all of its signs become critical. So, for example, a recession is indicated by an increase in inflation of only 2–3%, while all other indicators of a recession are active, which is evidence of the beginning of an economic depression.

What does it lead to?

The main and most obvious consequences of such a period of economic recession include:

1. Reducing the volume of production of enterprises in the country.
2. A complete financial collapse of the markets.
3. Reducing the number and size of loans provided by banks.
4. Increase in lending interest rates.
5. Rise in the unemployment rate.
6. Decreased income of the population.
7. Rising inflation.
8. Constant price increase.
9. Increasing the country's debt.
10. Falling GDP indicators.

The most serious, dangerous and powerful consequence of a recession is economic crisis. The decline in production leads to a decrease in the number of jobs and massive layoffs. People lose their jobs, start saving, cutting their costs, resulting in a reduction in demand, which leads to an even greater decrease in production.

Attention!

Also, the debt of residents and enterprises to banks begins to increase, which react by tightening the conditions for issuing loans. loan funds. Lending volumes are sharply reduced, and this leads to a reduction in investment in science and industry.

The decline in production leads to a collapse of the markets and a decrease in the value of securities, especially the shares of large industrial companies.

These changes are followed by depreciation. monetary units countries, leading to an increase in prices, a reduction in income levels, an increase in the discontent of citizens and a reduction in the quality of life for the population.

The government, trying to rectify the situation, begins to borrow more from its neighbors, and all this leads to a reduction in the very GDP, which is a sign of the onset of a recession that can develop into depression and crisis.

The difference between recession and stagnation

The period of decline or increase is the main difference between recession and stagnation.

The stagnation phase is characterized by:

• Complete economic stagnation lasting for a long time.
• Increasing the number of unemployed.
• Serious decline in the quality of life of citizens.
• Small or almost zero GDP.

If economic stagnation is characterized by high inflation, then it is called stagflation.

A recession is characterized not by a rapid decline, but not by stagnation. And this clearly indicates that recession and financial stagnation are distinguished by periods of decline in GDP and its consequences for the situation in the country.

To understand what is worse than a recession during a recession or stagnation during stagnation, it is necessary to consider each specific case separately.

A recession does not mean at all that the country is in danger of depression and people should prepare for difficult times. With a competent economic approach to government, all the consequences of a recession can be prevented by bypassing the phase of economic depression.

But, of course, this is not always possible, so before drawing conclusions about economic situation in the country, all economic indicators and the reasons for the onset of a recession should be considered.

It is known that the functioning of the capitalist economy is subject to cyclical fluctuations.

For the first time, the cyclical nature of macroeconomic processes was identified back in the 19th century in connection with periodic crises of overproduction in England (since 1825), which since then have been regularly repeated with a frequency of 7-12 years.

Since 1825 periodic crises those. recessions (recessions) of national production and, above all, industrial production And employment, as well as other indicators, are repeated with approximately the same frequency, although with different intensity, and since 1857. this phenomenon began to manifest itself on a global scale.

Such crises are always followed climbs national production. And since this alternation recessions And rises(fluctuations) wears periodic, that is natural character, is obvious cyclical macroeconomic fluctuations. It is this cycle that modern economists have in mind when they use the term "economic (or business) cycle" (business cycle).

1. The concept of the economic cycle. The main components of economic dynamics. Phases of the economic (business) cycle.

2. Classical and Keynesian interpretations of cyclic fluctuations.

3. Modern theories of macroeconomic fluctuations.

4. Problems of forecasting.

The concept of the economic (business) cycle. Main components economic dynamics. Cycle phases.

Business cycle representssuccessive and periodically recurring recessions and rises in economic (business) activity against the background of the general trend (trend) of economic growth.

Figure 7.1 shows the standard interpretation of a loop: potential GDP in combination with actual GDP.

The purple prime line characterizes the general trend of economic growth, i.e. long-term dynamics of potential GDP.

The wavy red line characterizes short-term dynamics of actual GDP.

As follows from the presented diagram, to identify cyclicity as a form of movement (functioning) of the capitalist market economy, a short-term analysis is needed, while a long-term analysis, the subject of which is potential GDP, is necessary to identify patterns of economic growth and development.

In fact, detecting the economic cycle is not so easy. The fact is that a market economy (as well as any other) is characterized by a wide variety of fluctuations, for example, seasonal, both of natural and anthropogenic origin. Both irregular and random fluctuations can be detected. Therefore, scientists are faced with the need to develop methods to eliminate such fluctuations in the course of macroeconomic analysis.

Although the cyclical nature of the development of the capitalist economy was noticed long ago and is recognized by most economists, not everyone shares the opinion about the existence economic (business) cycle. Term « cycle » implies recognition natural and hence regular And predictable the nature of macroeconomic fluctuations, as well as - this is the main thing - the recognition endogenous the (internal) nature of these vibrations.

Some economists argue that macroeconomic fluctuations– fluctuations in business activity – irregular, because they are conditioned exogenous (external to the economy) factors and, therefore, these fluctuations not regular And not predictable.

Phases of the economic (business) cycle.

Economic ( business, mid-term ) loop consists of four phases (Fig. 7.2):

climb (revival),

high point of the cycle – peak cycle (" boom»),

downturn or recession(may go to depression),

trough of the cycle (hollow, bottom).

Rise (revitalization) begins with the growth of the actual GDP and reducing unemployment due to the growth of aggregate demand, primarily investment. Then a slight increase in the price level begins ( premature inflation). Once the economy reaches potential GDP , the next phase begins.

GDP

recession

depression

The presented modern cycle structure is essentially a two-phase model of the cycle: the phase recession(recession) and phase expansion (climb). depression And peak act as turning points between these two phases.

spread and four-phase(Fig. 7.3) cycle model. Even K. Marx singled out four phases (however, he meant industrial cycle):

a crisis(drop in output, rising unemployment);

depression(the decline in production and the growth of unemployment stops);

revival(some reduction in unemployment, the beginning of an increase in output - up to t. A);

climb(rapid growth in output and employment after the so-called. A).

Dot A represents the maximum level of economic activity reached in the previous cycle. The dotted line touching the peak points of the cycles represents the long-term (secular) trend of economic growth.

For the first time, cyclicity as a statistical regularity was revealed in the 60s of the XIX century. French statistician C. Juglar. The credit for theoretical explanation and analysis of the (industrial) cycle belongs to K. Marx. Therefore, these cycles are called Marx-Juglar cycles.

What is the characteristic of a crisis (or recession, or recession)?

In the past (in the 19th century), crises usually began with a sudden gap between excessive cumulative offer and insufficient cumulative demand. As a result, prices and profits plummeted, dragging production and employment (rising unemployment) with them.

K. Marx explained crises (and hence the cycle) endogenously inherent in the capitalist economy, the contradiction between social nature of production And private nature appropriations production results:

Public nature of production means the universal interconnection and interdependence of macroeconomic processes.

Private appropriation results of production is manifested in the fact that firms seeking to maximize profits make decisions and act autonomously ( atomistically- the term of K. Marx), i.e. independently of each other.

Autonomous decisions and the actions of firms based on them lead to a violation private, general, and finally macroeconomic equilibrium .

Violations of the conditions of macroeconomic equilibrium are explosive nature: suddenly appear all the contradictions that accumulated in the economy in the previous period, primarily:

contradiction betweenproduction and consumption (hence the name overproduction crisis);

contradiction betweenlabor and capital (manifested, in particular, in the growth of unemployment).

disrupt other macroeconomicproportions (what we formulate as conditions for macroeconomic equilibrium, which manifests itself, in particular, in a sharp increase savings compared with investment demand, primarily due to the accumulation of an amortization fund, to which J.M. Keynes later paid special attention).

Thus, according to Marx, crisis (recession, recession) is a period of violent return to macroeconomic equilibrium (through the restoration of private and general balance). This return opens the way to a new cyclical rise economy. Then everything is repeated from the beginning.

Marx proved that cyclicity is a form of economic movement immanently inherent in capitalism.

Marx believed that at the heart of the periodicity of crises(i.e. at the heart of the cycle) lies periodic mass renewal of fixed capital. The period itself corresponds in terms to the average service life of the active part of the fixed capital - industrial equipment.

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.

business cycle called the time interval between two identical states of the economic situation.

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

Cyclical fluctuations may experience different, but the most common is the analysis of business cycles using the example of fluctuations in the value (or). On fig. 4.1 is a diagram of the 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

Business cycles are characterized by the following important indicators:

• oscillation amplitude- the maximum difference between the largest and smallest value of the indicator during the cycle (distance CD);
• cycle time- the period of time during which one complete fluctuation of business activity takes place (distance AB).

By duration, the cycles are divided into:

• short cycles associated with the recovery in the consumer market, fluctuations in wholesale prices and changes in the stocks of firms. 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 economic 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 " world economy and its conjuncture during and after the war" (1922) and the report "Large cycles of economic conjuncture" (1925). N.D. Kondratiev from the end of the 28th century based on actual material identified three major waves:

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

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

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

The main role in the change of cycles, according to N.D. Kondratiev, play scientific and technical innovations. So, for the first wave (the end of the 18th century), inventions and shifts in the textile industry and the production of iron played a decisive role. Growth during the second wave (mid-nineteenth century) was driven primarily by 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 20th century) was prepared by inventions in the field of electrical engineering and was based on the massive 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 mass introduction of microprocessors, achievements in genetic engineering, biotechnology, etc.

It should be noted that in real life, some cycles are superimposed on others, and within the framework of longer fluctuations, several short cycles occur.

Cycle phases

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

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

1. Climb. In the upswing phase, the national income grows from year to year, decreases 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 are increasing.
2. Boom. The boom phase ends with a boom in which there is overcapacity and overcapacity, the price level, the wage rate and the interest rate are very high. Investments in production are almost not carried out due to the high cost of attracting resources.
3. Recession. Production and employment are shrinking. A decrease in demand causes prices for goods and services to fall. Investment becomes negative because, at this stage of the cycle, not only are firms not making new capital investments, but there is an increase in idle capacity. Many firms suffer losses or go bankrupt.
4. Recession day. The rate of decline is slowing down and is now stabilizing. The decline in production and the rise in unemployment are reaching their maximum values. Prices are minimal. Only the strongest firms survived. Accumulating potential for future growth – with low rates percentage 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 differ 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 insignificant decline. In the situation of a downward long wave, on the contrary, the recessions will be deep and long, and the rises will be insignificant and short-lived.

It should be noted that not for all cycles the behavior of macroeconomic indicators coincides with that described above. There are situations when, against the backdrop of a decline in production and rising unemployment, there is also an increase in prices. This situation is called stagflation and most often occurs with sudden changes in the 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 beginning of the economic transformation.

Crisis as the most important element of the cycle

The recession phase in the economy is also called the crisis and depression phase. This stage is of particular importance for the economy, because after the crisis, the composition of enterprises is updated, the strongest and most efficient firms survive, new inventions appear and new ones are opened. economic opportunities. However, the crisis is also a great social shock - people lose their jobs, their incomes are reduced, and the standard of living of the population is declining. Therefore, the prevention or mitigation of crises is one of the most important tasks of the state.

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

The first crisis called global, which began in the United States 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, a high level of unemployment, and a significant reduction in the volume of world trade. It covered all branches of industry (especially the branches of ferrous metallurgy, mechanical engineering, mining, maritime transport, etc.) and agriculture. The general nature of the crisis reduced the possibilities for countries to maneuver at the global level. The consequences of this crisis were overcome only as a result of the upsurge caused by the Second World War.

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

Cause of the next crisis(1974-1975), one might say, is random, not subject to the laws of economic development. The impetus was a four-fold increase in the price of the oil they exported by the OPEC cartel. Many developed countries are facing a severe shortage of energy resources. Oil-importing countries were forced to reduce its consumption or look for substitutes and introduce energy-saving technologies. The volume of national production has decreased, while prices have risen, i.e. stagflation was observed.

In 1980-1982 a new crisis erupted, the main victims of which were developing countries. Majority developing countries during the second half of the twentieth century. passed 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. the external debt of 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 were insignificant. However
90s were years of upheaval for countries of Eastern Europe and the USSR, which ceased to exist in 1991. A deep transformational crisis in Russia, which was the result of the transition from a planned way of doing business to a market one, covered all aspects of economic life. During the reforms, industrial production decreased by about 60% (many economists talk about deindustrialization of the economy), the country experienced a period of high inflation, property inequality of citizens increased, more than 30% of the population fell below the poverty line.

Summarizing the above, we can note several features of cyclic development:

1. With development national economies and the strengthening of international interdependence, crises from local (national) are turning into global ones.
2. The period of time between crises is shortening; the period of cyclic fluctuations decreases.
3. A random factor is added to the patterns of cyclical development of the economy.
4. Systemic (or transformational) crises do not fit into the generally accepted scheme of the cycle. As a rule, they are caused by institutional transformations that take place not only in the economic, but also in other spheres of public life.

Cycle theories

Multiplier-accelerator model

This approach assumes that business 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 the products of firms causes an increase in investment and, as a result, in the gross domestic product. Moreover, it increases by a larger amount than investment due to the effect . Further, an increase in GDP requires new investments both to reproduce the increased capacities and to further development. The intensity of this process is determined by the size of the accelerator. At some point in time, all available resources are exhausted, and - 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 affect the system from the outside. Next theory tries to take into account the already mentioned factor of chance.

Momentum-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, which can become optimistic or pessimistic; the behavior of the state), as well as supply (for example, unprecedented low or high yields, natural disasters; important inventions and discoveries, etc. .). Favorable shocks can increase GDP, while unfavorable shocks can reduce it.

The list of potential shocks is endless. These shocks bring the economy out of its current state and set off a knock-on effect (Figure 4.2). The considered shocks, or impulses, change the conditions of supply or demand in the economy. Having experienced a random shock, national production begins to fluctuate in 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 Yevgeny Slutsky and Norwegian economist Ragnar Frisch, the latter of whom was awarded the Nobel Prize.

4.2. Mechanism "momentum-propagation"

Monetary concept of economic cycles

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

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

evolutionary theory

The evolutionary theory of economic cycles is the youngest and still the 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 macro-generations

The basic idea of ​​an evolutionary economy 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 presented as a set of economic subsystems, in each of which "natural selection" takes place, then these subsystems can be called macrogenerations. Macrogeneration can be interpreted as part of the means of production that produce part of the GDP and include a certain technical level of production in various industries National economy. The term of her life is limited in time, i.e. it is born, exists for a period of time and dies. The relationship between macro generation and GDP is shown in Figure 4.3.

The cyclical development of the economy can be represented as a change of macro generations. The emergence of new macrogeneration, usually due to the development of scientific and technological progress, causes an economic upswing in the country. Old, already existing macro-generations are gradually leaving economic life, causing a reduction in production.

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

• each new macro generation most often appears during periods of decline in production, 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 growth;
• from the moment of the emergence of a new macrogeneration until the birth of the next one, the trajectory of GDP goes through both an upswing phase and a downswing phase, i.e. full business 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 for cycles. Other theories include the following:

1. Theory of periodic solar activity. The idea is that the sun greatly influences agricultural yields. In the event of drought and crop failure, agricultural production is reduced, it spreads to related industries and beyond.
2. Model of interaction between savings and investments. The accumulation of savings by the population leads to a decrease in the interest rate, the volume of investments 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 the behavior of people depending on the economic situation. People can have positive or negative assessments of future events and act on their predictions. If economic agents assume the onset of the recovery phase, they increase their activity, but if they predict a recession, then, accordingly, they reduce business activity.