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УДК: 08.00.01
Bakieva I.A.
Kayumov A. O.
Islamov A.Z.
TFI, Uzbekistan ANALYSIS OF MACROECONOMIC PROCESSES
Abstract: This article discusses the classical model of macroeconomic processes and its main provisions.
Key words: Model, analysis, macroeconomics, process, sector, market, competition, price, problem, resource, seller, buyer, labor market, debt market, commodity market
Unlike microeconomics, in which there is a monistic (single) view of economic problems, macroeconomics has two approaches, two schools, two directions in the interpretation of macroeconomic processes and phenomena: classical and Keynesian (and in modern conditions, respectively, neoclassical and neo-Keynesian) and therefore There are two macroeconomic models that differ from each other in the system: 1) prerequisites 2) model equations 3) theoretical conclusions and 4) practical recommendations. The main difference between schools is: 1) the interpretation of the issue of the degree of price flexibility and the speed of their adaptation (adjustment) to changes in market conditions, the rate of market clearing and 2) the need, degree and instruments of government intervention in the economy.
The main provisions of the classical model are as follows:
• The economy is divided into two independent sectors: real and monetary, which in macroeconomics has been called the principle of "classical dichotomy." The monetary sector does not affect real indicators, but only fixes the deviation of nominal indicators from real ones, which is called the principle of "money neutrality". This principle means that money does not affect the situation in the real sector and that all prices are relative. Therefore, in the classical model, the money market is absent, and the real sector consists of three markets: the labor market, the debt market, and the commodity market.
• Perfect competition in all real markets, which corresponded to the economic situation of the end of the eighteenth and the entire nineteenth century. Therefore, all economic agents are price takers.
• Since there is perfect competition in all these markets, all prices (ie, nominal rates) are flexible. This also applies to the price of labor — the nominal wage rate; and to the price of borrowed funds - the nominal interest rate; and to the price of goods. Price flexibility means that prices change, adapting to changes in market conditions (i.e., changes in the supply-demand ratio) and restore imbalance in any of the markets, and at the level of full employment of resources.
• Since prices are flexible, the equilibrium in the markets is established and restored automatically, the principle of "invisible hand" derived by A.Smith, the
principle of self-balancing, market self-regulation ("market-clearing").
• Since equilibrium is provided automatically by a market mechanism, no external force, an external agent should interfere in the process of regulating the economy, and even more so in the functioning of the economy itself. This was the basis for the principle of state non-interference in economic management, which was called "laissez faire, laissez passer", which in French means "let everything be done, how it is done, let everything go, how it goes".
• The main problem in the economy is limited resources, so all resources are fully utilized, and the economy is always in a state of full employment of resources, i.e. the most effective and efficient use of them. (As is known from microeconomics, the most efficient use of resources from all market structures corresponds precisely to the system of perfect competition). Therefore, the volume of output is always at its potential level (the level of potential or natural output (natural output), that is, production at full employment of all economic resources).
• Resource constraints make production a major problem in the economy, i. the problem of aggregate supply. Therefore, the classical model is a model that studies economics from the side of aggregate supply (the "supply-side" model). The main market is the resource market, and, above all, the labor market. Aggregate demand always corresponds to aggregate supply. The economy has the so-called "Say law" proposed by the famous French economist of the early nineteenth century, Jean-Baptiste Say, who argued that "supply generates adequate demand," since every person is both a seller and a buyer; and his expenses are always equal to income. Thus, a worker, on the one hand, acts as a seller of an economic resource that he owns, i.e. labor, and on the other - the buyer of goods and services, which he acquires on the income derived from the sale of labor. The amount that the worker receives in the form of wages is equal to the value of the products he produced. (The profit maximization condition for a perfectly competitive firm, as is known from microeconomics: MS = MR (marginal costs are equal to marginal revenue), i.e. W = P * MPL, where W is the nominal wage, P is the price of the products produced by the company and MPL - the marginal product of labor). And his income is equal to the sum of expenses. The firm is also both a seller (of goods and services) and a buyer (of economic resources). The income received from the sale of its products, it spends on the purchase of production factors. Therefore, there can be no problems with aggregate demand, since all agents completely turn their income into expenses.
• The problem of limited resources (increase in quantity and quality improvement) is being solved slowly. Technological progress and the expansion of production capabilities is a long, long-term process. All prices in the economy are adapted to the change in the ratio between supply and demand is also not immediately. Therefore, the classical model is a model that describes a long-term period (the "long-run" model).
Absolute price flexibility and mutual equilibration of markets is observed only in the long run. Consider how the markets interact in the classical model.
There are three real markets in the classical model: the labor market, the borrowed funds market and the commodity market.
The labor market (labor force) is an important multidimensional sphere of the economic, economic and political life of society. The labor market receives an estimate of the cost of labor, determines the conditions of its employment, including the amount of wages, working conditions, job security, the possibility of obtaining education, professional growth.
The borrowed funds market is a medium-term and long-term investment market. The debt capital market has some differences from the money market, in which short-term lending transactions are preferable. As a rule, it can be any market that sells investment funds: a stock trading floor or a currency exchange, pension, investment and insurance funds.
The consumer goods market is characterized primarily by the mass production and marketing of these goods. Another important point is the increase in the share of durable goods, i.e. those that have been used for a long time, usually for several years (houses, cars, etc.).
From the provisions of the classical model it followed that protracted crises in the economy are impossible, and only temporary imbalances can occur, which are gradually eliminated by themselves as a result of the market mechanism -through the mechanism of price changes.
But at the end of 1929, a crisis broke out in the United States that swept the leading countries of the world, which lasted until 1933 and was called the Great Crash or the Great Depression. This crisis was not just another economic crisis. This crisis has shown the inconsistency of the provisions and conclusions of the classical macroeconomic model, and above all the idea of a self-regulating economic system. First, the Great Depression, which lasted four long years, could not be interpreted as a temporary disproportion, as a temporary failure of the mechanism of automatic market self-regulation. Secondly, what limited resources, as a central economic problem, could be discussed under conditions when, for example, in the USA the unemployment rate was 25%, i.e. one out of every four was unemployed (a person who wanted to work and was looking for work, but could not find it).
The causes of the Great Collapse, possible ways out of it, and recommendations to prevent similar economic catastrophes in the future were analyzed and substantiated in the book The General Theory of Employment, Interest and Money, published in 1936. The result of the publication of this book was that macroeconomics was separated into a separate section of economic theory with its own subject and methods of analysis. Keynes's contribution to economic theory was so great that the emergence of the Keynesian macroeconomic model, the Keynesian approach to the analysis of economic processes, was called the "Keynesian revolution".
But it should be borne in mind that the inconsistency of the provisions of the classical school is not that its representatives, in principle, came to the wrong conclusions, but that the main provisions of the classical model were developed in the 19th century and reflected the economic situation of the time, i.e. era of perfect
competition. But these provisions and conclusions did not correspond to the economy of the first third of the twentieth century, a characteristic feature of which was imperfect competition. Keynes denied the basic premises and conclusions of the classical school, building his own macroeconomic model.
Literature:
1. Makarov V. Theoretical foundations of experimental economics. Economist, 1995
2. Lvov D. Theoretical core of the socio-economic development of the country. The Economist, 1997
3. V. Leontiev. The basic assumptions of Keynes's theory of unemployment. In the book. Leontyev V. Economic essays. M., 1990
4. Keynes J.N. The subject and method of political economy. M .: I.A.Balandin, 1899
