Anti-inflationary measures in Russia

In practical economic activity, economic entities are important not only to correctly and comprehensively measure inflation, but also to correctly assess the consequences of this phenomenon and adapt to them. In this process, structural changes in price dynamics are of primary importance.

Specificity of the situation

With "balanced" inflation, product prices rise, maintaining the same ratio. In this case, the relevance of the situation in the markets for goods and labor is important. With a balance, the income level of the population does not go down, despite the fact that the value of savings saved before is lost. With an unequal correlation, profits are redistributed, structural changes occur in the sphere of production of services and goods. This is due to the imbalance in price fluctuations. Especially fast increases the cost of everyday goods inelastic demand. This, in turn, generates a decline in the quality of life and an increase in social tension.

Way out

Negative consequences of the imbalance in the situation with prices require the leading bodies of different countries to conduct a coordinating policy. At the same time, analysts are trying to find out what is best: to adapt to the existing situation or develop programs to eliminate it. In different countries this issue is resolved in different ways. When analyzing the situation, a whole complex of specific factors is taken into account. For example, in England and America at the governmental level, priority is given to the development of liquidation programs. In other countries, the task is to create a set of adaptation measures.

Keynesian approach

Analyzing the measures of anti-inflationary economic policy, we can distinguish two approaches to the solution of the problem. One of them is developed by modern Keynesians, and the second by the followers of the neoclassical school. In the first approach, the anti-inflationary measures of the state are reduced to maneuvering by taxes and expenditures. This provides an impact on effective demand. Due to this, inflation is undoubtedly suspended. Anti-inflation measures of this nature, however, also have a negative impact on production, reducing it. This can lead to stagnation, and in some cases to crisis phenomena, including an increase in the level of unemployment. The expansion of demand in the phase of decline is also achieved through the implementation of budgetary policy. To stimulate it, tax rates are lowered, investment programs and other expenses are introduced. First of all, low tariffs are set for those who receive low and medium incomes. It is believed that this way it is possible to expand consumer demand for services and goods. However, as practice shows, such anti-inflationary measures can only worsen the situation. In addition, the ability to maneuver costs and taxes is significantly limited by the budget deficit.

Neoclassical theory

In accordance with it, financial and credit regulation is put in the forefront. It has a flexible and indirect effect on the situation. It is believed that the anti-inflationary measures of government should be aimed at limiting effective demand. Adherents of the theory stipulate this by the fact that stimulating growth and maintaining employment in an artificial way by lowering the natural rate of unemployment leads to a loss of control over the situation. This program is being carried out today by the Central Bank. Formally, he is not under government control. The Bank influences the market by changing the circulation of money and interest rates on loans.

Adaptation programs

Within the current market regime, it is impossible to eliminate all inflationary factors (monopolies, budget deficits, disproportions in the economy, expectations of entrepreneurs and the public, and so on). That is why many countries, instead of trying to eliminate the situation, are trying to moderate the crisis phenomena, not to allow their scale expansion. Today, it is most expedient to combine short-term and long-term anti-inflationary state measures. Let us consider them in more detail.

Long-term program

This system of anti-inflation measures includes:

1. Weakening the influence of external factors. In this case, the task is to reduce the inflationary impact on the economy of foreign capital flows. They are manifested in the form of short-term loans and loans of the country to pay off the budget deficit.
2. Establish strict limits on the annual increase in the money supply.
3. Reduction of the budget deficit, as its financing by securing loans from the Central Bank leads to inflation. This task is realized by lowering costs and increasing taxes.
4. Extinguish the expectations of the population, which is driving the current demand. To this end, clear measures of anti-inflationary policy should be developed to win the confidence of citizens. The country's leadership should promote effective work of the market. This, in turn, will positively affect consumer psychology. In this case, anti-inflationary measures include the liberalization of prices, the stimulation of production, the fight against monopolization and so on.

Short-term program

It is aimed at temporary slowing of inflation. In this case, the required expansion of the aggregate supply without increasing the total demand is achieved by granting certain benefits to enterprises engaged in the production of collateral services and goods in addition to the main production. Part of the property can be privatized by the state, which will provide additional infusions to the budget. This greatly facilitates the solution of deficiency problems. In addition, the short-term state system of anti-inflationary measures reduces demand by selling a large number of shares of new companies. The growth of supply is promoted by the import of consumer products. A certain influence is exerted by the increase in interest rates at rates. It raises the saving rate.

Anti-inflationary measures in Russia

For several years, the Central Bank together with the Ministry of Finance conducted a restraining program. It consisted of ruble borrowings and subsequent sequential lowering of the dollar's liquidity in the domestic market. As practice showed, such a system of anti-inflationary measures failed to ensure price stability. Moreover, their implementation is extremely dangerous for the country. Investing in real production has become an extremely unreasonable way out of the situation. However, the money that was pushed out of the enterprises, found a different direction. Thus, there was a significant increase in the value of real estate, an increase in the volume of sales of luxury goods and other costs. At the same time, the profitability of the "hot" capital, repeatedly announced by the Central Bank, significantly changed the motivation of investors. It became very profitable to convert foreign currency into rubles. The sphere of financial intermediation began to develop intensively. Today, in this sector, there are maximal wages that are not accompanied by commodity content. At the same time, the dependence of financial companies on external sources increased. The function of the national currency at the same time began to be reduced only to the maintenance of commodity exchange between importers and operations in the stock markets. Although the ruble was supposed to provide settlement relationships between domestic contractors and customers. Thus, the national currency has become almost unclaimed in the Russian economy and subject to inflation.

Prospective directions

Effective struggle against the current situation, many experts see in stimulating economic growth. This way involves the use of natural, and therefore reliable instruments of regulation. When additional funds are in demand in the domestic market, the entrepreneur will always find an opportunity to take money in the bank of his own country or abroad. At the same time, the exporter will voluntarily convert the received profit into the national currency. If money in the economy is abundant, they will be sent to bank deposits or foreign investments. The task of the issuing center should be to keep interest rates at a given level to prevent large fluctuations in the credit market. However, analysts say that such a situation in Russia is possible when the Central Bank becomes a "net lender" for commercial banks. In this case, he will be able to dictate price conditions, and not be dependent on the market. Borrowings of the Central Bank will also be needed. However, they should be aimed at removing temporary excess liquidity. Net crediting will, therefore, guarantee the profitability of operations in open markets. This, in turn, will provide the necessary anti-inflationary effect.

Goszaimy

They artificially overstate rates and adversely affect the financing of the real economic sector. At the same time, state loans require interest payments in favor of investors. As a result, they form a double crisis effect. First of all, loans slow down the growth of supply, in the second - they increase effective demand. With the complete cessation of borrowing, resources will be freed to strengthen commodity production.

Taxes

The development of domestic business is significantly hindered by excessive interference of the authorities in its activities, reporting and numerous inspections. According to experts, the greatest problems are created by the taxation system. A number of authors offer to exempt from all fees, except those motivated by public services, medium and small businesses. With such an easing, there will be no significant budget losses, but this will allow partially canceling the non-market principle of interaction between the authorities and entrepreneurs. Such anti-inflationary measures will allow the business to fulfill its social task, which is to replenish the counters with products and provide citizens with work and wages. With tax exemptions, the business will be lost out of the shadows. These anti-inflationary measures will serve as a powerful incentive for the development of the production sector.

Additionally

In addition to those described above, experts propose to use other anti-inflation measures. They should be such that getting the effect from them does not require long preparation. Among them, in particular, analysts propose to introduce proxies to prohibitive duties on energy exports. This will ensure the country's raw material security in the long run, replenish domestic markets with fuel, and increase competition. This, in turn, should lead to lower prices.

Conclusion

Today, inflation is considered one of the most dangerous and very painful processes. It negatively affects the financial and economic sector. Inflation is not only a decline in the purchasing power of funds. It destroys the mechanisms of economic regulation, nullifies all efforts made in the process of structural transformation, leads to imbalances in markets. The nature of manifestations of inflation can be different. Processes can not be considered only as a direct result of certain actions of the country's leadership. Inflation is caused by deep distortions in the management system. From this it follows that all of its course is not accidental, but rather stable. In this regard, the development of anti-inflationary measures is today the main task of the government. As was said above, exit programs from the crisis involve long-term strategies. However, they become effective only when the inflationary expectation of society is promptly repaid. To solve this problem, it is necessary to develop programs to strengthen market mechanisms and confidence of the majority of citizens. Undoubtedly, reducing the budget deficit should be an obligatory measure to curb inflation. It should be remembered that all programs will be effective only if the production sector simultaneously develops and is stimulated. Reduction of money demand can be achieved by strengthening the commodity market, the ability to invest in shares, the organization of reasonable privatization. As a result, conditions will be formed to maintain the inflation rate as low as possible. They will not be able to exert a significant influence on the market mechanism and hinder the normal development of the country.