The contents

|I Economic sciences.                                                 |
|  1. Microeconomic.                                                  |
|  2. Macroeconomic                                                   |
|II State regulations of economy.                                     |
|1. Brief historical information.                                     |
|2. Concept of state economic politics.                               |
|3. Subjects of state regulation of economy.                          |
| Four communication lines of economic interests with                 |
| By state economic politics.                                         |
|  1). Carriers of economic interests.                                |
|  2). Expressers of economic interests.                              |
|  3). The executors of economic interests.                           |
|  4). The return communication line.                                 |
|  5). The questionnaire.                                             |
|4. Objects of state regulation of economy.                           |
|  1). State anticyclic politics.                                     |
|  2). State regulation of economy in area                            |
|  Branch and territorial structure.                                  |
|  3). Accumulation of the capital.                                   |
|  4). Regulation of employment.                                      |
|  5). The money manipulation.                                        |
|  6). A condition of payment balance.                                |
|  7). The prices.                                                    |
|5. General purpose of state regulation                               |
|Economy and tree of the purposes.                                    |
|6. Means of state regulation of economy.                             |
|  1). Administrative means.                                          |
|  2). Economic means.                                                |
|  3). The state budget.                                              |
|  4). The taxes.                                                     |
|  5). Accelerated amortisation.                                      |
|  6). Public sector.                                                 |
|  7). Means of the external economic regulation.                     |
|7. State economic programming.                                       |
|  1). Objects of the programs.                                       |
|  2). The usual and extreme programs.                                |
|  3). The target programs.                                           |
|  4). The subjects of economic programming.                          |
|  5). Borders of economic programming.                               |
|8. Mechanism of state regulation of economy                          |
| On an example of the prices.                                        |
|  1). The price right.                                               |
|  2). Supervision of the state over the prices.                      |
|  3). Indirect influence of the state on the prices.                 |
|  4). Direct state intervention in process of money appearing.       |
|  5). Influence state sector.                                        |
|  6). The contribution of public sector to process                   |
|  Price control.                                                     |
|9. Inflation.                                                        |
|  1). The reasons of occurrence of inflation.                        |
|   a). Internal.                                                     |
|   b). External.                                                     |
|  2). Types of inflation.                                            |
|   a). Slow inflation.                                               |
|   b). Galloping inflation.                                          |
|   c). Hyperinflation.                                               |
|  3). Consequences of inflation.                                     |
|   a). Positive functions.                                           |
|   b). Negative consequences.                                        |
|  4). Management of inflation.                                       |
|10. Unemployment.                                                    |
|  1). The market of work.                                            |
|  2). Classification of the unemployed.                              |
|  3). The formula of calculation of monthly average                  |
|  Rate of unemployment.                                              |
|  4). The concepts treating a phenomenon of unemployment.            |
|  5). Directions of state regulation                                 |
|  Market of work.                                                    |
|  6). Labour exchange.                                               |
|11. Stages of state regulation of economy.                           |
|                                                                     |
|III Lists of the used literature.                                    |

    The People, who have never systematically learned the economic theory,
are similar to deaf persons, which try to estimate sounding an orchestra .
                                                        P. Samulson

       There are fields of knowledge and vital experience, about which,  it
seems any of us can judge. Except for  politics,  to  such  spheres  concern
medicine and, certainly, economy. It  is  not  casual,  you  see  economy  
science is empirical, it connection with practice is  direct.  Each  of  us,
irrespective of preparation, collides daily with the economic phenomena.  We
are all workers - create values or we raise the  qualification,  we  receive
the incomes, we address to the market, we watch (keep  up)  the  prices,  we
are the consumers. The economy studies homo economics - economic man,  his
actions and interests. Well as in  medicine,  where  for  statement  of  the
diagnosis it is necessary to know the functioning  of  a  healthy  organism,
first of all to understand the laws of functioning of healthy economy.
    The economic science is  called  to  define  how  to  use  the  limited
resources maximum effectively - natural stocks, capitals,  labour  reserves.
Like other branches of knowledge, the economy includes a set of  axioms  and
proofs, suitable for the analysis in any concrete conditions.  And  in  this
narrow sense it can not be national, as well as there can not be a  American
physics or German mathematics.  The  prices  of  the  goods  everywhere  are
defined by a parity of a supply and demand, with the growth  of  the  income
there is a reduction of its consumed part and increase gathering.
    But the economy has basic difference from exact and  natural  sciences:
it has business not with the separate man on a uninhabited island, but  with
the member of  a  society  subject  to  influence  of  traditions,  national
mentality and  political  institutes.  The  toolkit  of  the  economist  has
therefore national specificity.

    The science is formed approximately the same as the tree grows  or  the
building is constructed. The great economists of the past have put  in  pawn
the base, have created the theory named as  microeconomy.  As  initial  item
for the analysis a facilities of the businessman and farmer were taken.  The
microeconomy studies the relation  between  the  businessmen  (competition),
businessmen and hired workers, sellers and buyers. It formulates  the  laws:
supplies and demand,  rarity-decreasing  income,  limiting  productivity  of
work or capital.  The  microeconomy  is  directly  connected  to  enterprise
activity, at the same time being a management for business.

    The economic theory created in 18 - 19 centuries is named classical, it
answered requirements of development of an industrial  society  based  on  a
private property and freedom  of  an  economic  choice.  The  creativity  of
ingenious Adam Smite for economy is compared to the invention of a wheel.

    Gradually national economy is turning to complex  systems  of  branches
forming a global economy. Periodically repeating economic crisises,  chronic
- unemployment and inflation become a rule.

    Business practice includes  problems,  which  are  not  solved  through
traditional means. The economists begin to be  interested  in  questions  of
general balance, cumulative demand, money manipulation.

    The 20 centuries appeared to be a  stage  of  macroeconomy.  The  large
system is not only set of small subsystems - firms and branches, but also  a
new quality. Its actions are operated by other mechanisms.  Macrosystem  can
not be described by categories of microsystem  (price,  profit,  competition
etc.). New techniques and tools here are necessary.

The Macroeconomic analysis becomes a basis of state politics, development
of the programs, selective (dot) methods of influence. But macroeconomic
is knowledge that works not far from business. You see such formulas, as
the return dependence between inflation and unemployment in scale of a
society, or between bank percent and rates of growth of a total product,
between growth of inflation and downturn of the exchange rate of domestic
currency is necessary to know, even to expect changes of a conjuncture and
probable general idea of government, direction of state regulation of

              Most of all laws were created in vague times of republic... 

    The state regulation of economy has a long history. The  practice  here
outstrips the  theory.  During  early  capitalism  in  Europe  there  was  a
centralised control above the prices, quality of  the  goods  and  services,
interest rates and foreign trade.

    17 century  is a century of the pioneers  of  the  normative  economic
theory - wrote that only detailed management on the part  of  government  is
capable to supply the  order  in  economic  sphere.  They  saw  in  a  state
management a means of ensuring social validity.

    With transition to capitalism and appearing of free  competition,  many
aspects of pioneers theory were destroyed.  The  approach  of  people  who
based a classical economy (18 centuries),  limiting  state  intervention  in
economic life, has the  historical  explanation.  You  see  in  that  period
economy was ruled by the market and freedom of a choice. In  economic  sense
freedom assumes two main  components:  the  right,  to  a  private  property
protected by the law and independence of acceptance of the decisions. In  18
- 19 centuries the economic role of the state  was  reduced,  basically,  to
protection of these primary rights.  The XX century  was  market  by  almost
universal strengthening of economic presence of the state.

    From the second half of 19 century national  manufacture  has  achieved
unprecedented scales. The end of the century is  connected  with  explosion,
jump in scientific - technical development and appearance of  new  branches.
All  these  circumstance   needed   requirement   for   co-ordination,   for
maintenance of proportions on macro-level, for anticyclic regulation.

    The amplification of state regulation was dictated by the  purposes  of
preparation to wars, their conducting, maintenance  of  war-protection.  The
whole system of measures including compulsory  movements  system  (GERMANY),
protectionism (Japan) was developed. The army-industrial  complexes  closely
connected to government were formed.

    The state regulation of economy was necessary for realisation of social
politics, for general strategy socialisation in a  broad  sense.  Collective
consumption or satisfaction of public requirements (public health  services,
education, support deprived and others) are impossible without use of  state
levers and organisations.

    And, at last, it would be desirable to emphasise, meaning day  today's,
need  for  state  support  and  sometimes   organisations   of   fundamental
scientific researches, and also protection of environment.

    The state regulation, thus, is caused by  occurrence  of  new  economic
needs, with which the market on the nature can not consult.

    And, though the similar regulation in modern market economy is  carried
out in much  smaller  scales,  than  in  administrative  -  command  system,
nevertheless here economic role  of  the  state  is  great,  is  special  in
comparison with the system of a free competition.

    The state regulation of economy  in  conditions  of  a  market  economy
represents  system  of  typical  measures  of  legislative,  executive   and
supervising character which is carried out by competent official bodies  and
public organisations with the purposes of stabilisation and  the  adaptation
existing socially - of economic system, and conditions.

    In the process of development of a  market  economy  the  economic  and
social problems became aggravated, they could not  be  solved  automatically
on the basis of  a  private  property.  The  necessity  of  the  significant
investments, has appeared necessary  for  continuation  of  reproduction  in
national  scales;  branch  and  social  crises,   mass   unemployment,   the
infringements in the money manipulation  become  aggravated  competition  in
the global markets required state economic politics.

    Theoretically concept  state  economic  wider  than  concept  of  state
regulation of economy, as  first  can  be  based  on  a  principle  of  non-
interference of the state in economic  life  (known  principle  of  economic
liberalism laisser faire - laisser passer). In modern  conditions  the  non-
interference of the state in socially - economic  processes  is  impossible.
Disputes about necessity of state  regulation  of  economy,  and  about  its
scales, forms and intensity are conducted for a long time.  Therefore  terms
 state regulation of  economy    and    state  economic  politics    are
presently identical.

    The  objective  opportunity  of  state  regulation  occurs   with   the
achievement of the certain level of economic development,  concentration  of
manufacture and capital. The  necessity  of  transforming  this  opportunity
into the validity consists in increase of problems, difficulties.

    In modern conditions the state regulation of economy is a component  of
reproduction. It solves various tasks: for example, stimulation of  economic
growth, regulation of employment, encouragement  of  progressive  shifts  in
branch and regional structure, support of export. The  concrete  directions,
forms, scales of state regulation of economy are defined  by  character  and
acuteness of economic and social problems in this or  that  country  in  the
concrete period.

    For understanding of the mechanism of state regulation of economy it is
expedient to characterise its subjects, objects, purposes, means,  and  also
stages of its development.

    The subjects of economic politics are the  carriers  and  executors  of
economic interests.

    The carriers of economic interests are social groups distinguished from
each other on a number of attributes: property, the  incomes,  on  kinds  of
activity at the similar incomes, on trades, branch and  regional  interests.
They are hired workers and owners  of  the  enterprises,  farmers  and  land
proprietors, businessmen managers and the shareholders, civil servants  etc.
Each of these groups has interests caused by  their  social  economic  rule,
and also accessory to that or other region, kind of activity.

    The representatives of these groups individually express the  interests
in mass media, on meetings  and  addressing  with  the  requests,  protests,
wishes to official bodies responsible for economic and social politics.

    It is the first communication line of economic interests with the state
device regulating an economy.

    The carriers of economic interests are  incorporated  in  the  advanced
countries of a market economy in numerous unions, association: it  is  trade
unions, unions of  the  businessmen,  farmers,  various  dealers,  students,
brokers and . Item. Some of these  unions  total  millions  members  (trade
unions, for example), others play a huge role in a national economy  because
of the capitals, represented by  them,  (unions  of  the  businessmen,  bank
establishments, trade chambers). There  are  also  absolutely  insignificant
associations, for example, association of the  physical  and  legal  persons
interested in a privatisation of the  concrete  ground  area,  belonging  to
municipality. Such associations are expressers of economic interests.

    Most powerful expressers  of  economic  interests  are  unions  of  the
businessmen and trade unions. They carry out  the  own  concepts  of  social
economic politics,  aspiring  to  render  the  maximal  influence  on  state
economic politics. At expressers of economic  interests  there  are  printed
editions, significant financial resources, centres of training of  personnel
and public relations. The unions of the businessmen  and  trade  unions  are
constructed to a branch and territorial  attribute,  all  local  and  branch
unions hierarchically are subordinated to the national  centres,  which,  in
turn, enter into the international, regional and global associations.

    The  recommendations,  advises,  memorandums,   various   channels   of
influence  these  expressers  of  economic  interests  on  bodies  of  state
economic regulation is the second communication line of  economic  interests
with state economic politics.

    Expressers  of  social  economic,   political,   religious,   cultural,
ecological, specific regional interests are  the  political  parties,  which
frequently work under a banner of national interests.

    To carry out in life the program of state economic politics there  will
be  a  subject  of  state  economic  regulation  -  executors  of   economic
interests. It  is  the  main,  third  line  of  transformation  of  private-
individual economic interests in state economic politics.

    The executors of economic interests - subjects of state  regulation  of
economy - are the bodies of three branches of authorities constructed  by  a
hierarchical principal, and also central  national  bank.  The  tendency  of
amplification of a role  of  the  central  bodies  of  authority  among  the
subjects  of  state  economic  regulation  is  appreciable  more  and   more
independent becomes the executive bodies.

    Interesting from the point of view of study of the mechanism  of  state
regulation of economy the  merge  of  the  subjects  of  state  and  private
economic politics and occurrence is as a result  of  it  of  new  regulating
bodies which are not entered  theoretically  in  the  classical  circuit  of
parliamentary or presidential republic.  For  example,  the  body  from  the
representatives of unions of the businessmen,  trade  unions  and  executive
authority for regulation of the tariff agreements  between  the  businessmen
and  workers  are  created.  The  committees,  advice  on   maintenance   or
development of separate branches from the representatives  of  the  ministry
of economy and branch unions  of  the  businessmen  are  organised.  Similar
advice is created for realisation of the state regional programs. The  basic
part of such bodies formally carries out  advisory  activity,  but  actually
decisive image influence state economic  politics.  Various  advice  of  the
experts concerns to  such  bodies  at  government,  ministries  of  economy,
finance,  social  maintenance,  their  separate  management,  central  bank,
governments of state iron roads, mail and telegraph etc.

    Other group of government-private regulation of economy  is  advice  on
spheres  of  activity,  for  example,  scientific   and   technical,   army-
industrial, on regional politics, on internal waterways of the messages,  on
vocational training. As against branch advice in  them  the  representatives
of the most different branches, banks, various funds,  associations  of  the
engineers,  trade  unions,  public  movements  enter  alongside   with   the
employees of governmental bodies and experts. Their recommendations  concern
the basic orientation of state  economic  politics,  its  directions  of  an
expenditure of means from the budget and various funds.

    It is the  fourth  communication  line  between  carriers  of  economic
interests  and  state  regulation  of  economy:  carriers  (in   this   case
interested firms)  expressers (unions  of  the  businessmen)    advice  at
state regulating bodies. On this line there is an updating of  interests  of
a private enterprise to interest others social,  professional,  public  (for
example, ecological) groups.

    There  are  numerous  opportunities  of  influence  of   carriers   and
expressers of economic interests on state economic politics: through  bodies
of the  mass  information,  demonstration  and  manifestation,  tax  of  the
signatures, manipulation  in  courts  -  from  local  up  to  international,
campaign of civil disobedience.

    Feedback between state regulation of economy and carriers  of  economic
interests rather rigid.

    First, the success of state regulation of economy is shown in rates  of
growth, improvement of structure of economy, growth of  employment,  healthy
payment balance, decrease of rates of inflation, increase of a vital level.

    Secondly, the successes of state regulation of economy are reflected in
parameters which are not always given in to exact quantitative  measurement:
in  a  level  of   social   intensity   (strike,   demonstrations,   various
performances), estimation of state regulation  of  economy  by  mass  media,
condition of an environment, quality of life in cities.

    Thirdly, carriers of economic interests  are  direct  and  through  the
associations supported or do not support government. The loss  of  trust  of
the voters and associations of economic  interests  to  a  ruling  party  or
parties is a main line of a feedback between  state  economic  politics  and
carriers of economic interests.

    The bodies of state regulation of economy can not afford  to  find  out
reaction of carriers of economic interests  to  a  general  orientation  and
concrete measures of state economic politics during choices, to  wait,  when
the discontent by an economic situation starts. The extreme  forms  (strike,
flight  of  the  capital).  The  operative  information,  whenever  possible
authentic forecasts the behaviour of the economic subjects is  necessary  to
governmental bodies in case of realisation of this or that measure of  state
regulation of economy. For this purpose there is a  fulfilled  mechanism  as
biographical interrogations. Through a biographical  method  the  efficiency
of  toolkit  budget,  a  special  way  of  regulation,  influence  of  state
purchases and orders, investments in public sector  are  investigated.  This
method has turned out to be the working tool of state regulation of  economy
ensuring a feedback between  regulating  bodies  and  carriers  of  economic

    So, it was the ideal picture  of  dependence  of  state  regulation  of
economy from economic interests, mechanism of this dependence and  feedback.
In real life weight of rejections from  model  -  is  observed  there  is  a
struggle between separate groups of interests for  influence  on  bodies  of
regulation, a wide circulation has  received  these  method,  the  facts  of
corruption in bodies of state economic politics  in  the  various  countries
are known. But the mechanism of state regulation of  economy  functions  all
the same not on rejections, but by rules.

    The objects of state  regulation  of  economy  are  spheres,  branches,
regions, and also situations, phenomenon and condition  of  social  economic
life of the country,  where  have  arisen  or  there  can  be  difficulties,
problems not permitted automatically or permitted  in  a  long-term  future,
while the removal  of  these  problems  urgently  is  necessary  for  normal
functioning of economy and maintenance of social stability.

    The basic objects of state regulation of economy is:

 1. Business cycle;
 2. Sectors, branch and regional structure of a economy;
 3. Conditions of accumulation of the capital;
 4. Employment;
 5. The money reference(manipulation);
 6. Payment balance;
 7. The prices
 8. Research  also  is  skilled  -  design  works  having  by  the  purpose
    development and realisation of scientific ideas;
 9. Conditions of a competition;
10. The  social  attitudes(relations),  including  the  attitudes(relation)
    between  the  employers  and  working  on  hiring,  and   also   social
11. Preparation and retraining of the staff;
12. Environment;
13. Foreign economic relations.
    Obviously,  the  transferred  objects  can  carry  completely   various
character,  they   cover   macroeconomic   processes   -   economic   cycle,
accumulation of the capital in scales of  the  country,  separate  branches,
territorial complexes and even the  relation  between  the  subjects    the
condition  of  a  competition,  the  relations  between  trade  unions   and
associations of the businessmen, between state regulating bodies.

       Let's consider major of them.

    The essence of state anticyclic politics, or regulation of an  economic
conjuncture, is, that during crises and depressions should stimulate  demand
for the goods and services, capital investments  and  employment.  For  this
purpose the  additional  financial  privileges  are  given  to  the  private
capital, the state charges and investments are increased. In  conditions  of
long and rough rise in a national economy there can be  dangerous  phenomena
 using of commodity stocks, growth of import and deterioration  of  payment
balance, excess of demand  on  a  labour  above  the  offer  and  from  here
unreasonable growth of wages and prices. In  such  situation,  the  task  of
state  regulation  of  economy  -  to  brake  growth  of   demand,   capital
investments and manufacture whenever possible to  reduce  overproduction  of
the goods and less products of the capitals and, thus, to reduce  depth  and
duration of possible recession of manufacture,  investments  and  employment
in the future.

    The state regulation of economy in the field of branch and  territorial
structure also is carried out through financial stimulus and  state  capital
investments, which provide privileged conditions to  separate  branches  and
regions. In one cases the support appears to branches and territorial  units
which are taking place in a condition  of  long  crisis;  in  others  -  the
development of  new  branches  and  kinds  of  manufactures  -  carriers  of
scientific  and  technical  progress  called  to   result   to   progressive
structural changes inside branches, between branches and in all  a  national
economy as a whole. The increase of its efficiency  and  competitiveness  is
encouraged. At the same time can be the stopping of excessive  concentration
of manufacture arranged on.

    Major object of state economy regulation is  the  accumulation  of  the
capital. Manufacture, assignment and capitalisation  of  the  profit  always
serve  an  overall  objective  of  economic  activity  in  market   economy,
therefore state economic politics of encouragement of accumulation first  of
all corresponds to  economic  interests  to  the  subjects  of  an  economy.
Simultaneously state regulation of accumulation is also used to  serve  also
to other objects of state economy regulation. Creating  additional  stimulus
and opportunities in different time  to  all  investors  or  their  separate
groups on  branches  and  territories  the  regulating  bodies  influence  a
business cycle and structure.

    The regulation of employment is maintenance normal from  the  point  of
view of market economy of parity between a supply and demand  of  a  labour.
Parity  should  satisfy  requirement  of  economy  for  the  qualified   and
disciplined workers, which wages serve for them a sufficient  motivation  to
work. However parity between a supply  and  demand  should  not  conduct  to
excessive growth of wages, which  can  be  reflected  negative  in  national
competitiveness. The sharp decrease of employment is  undesirable  also,  it
conducts to increase the  army  of  the  unemployed,  decrease  of  consumer
demanded, tax receipts, growth of  the  charges  on  the  grants  and,  most
important, it is dangerous by social consequences.

    Constant object of  attention  of  state  regulating  bodies  is  money
manipulation. The basic orientation of regulation of  money  manipulation  -
struggle  with  inflation  representing  serious  danger  to  economy.   The
regulation of money manipulation influences and other  objects  -  condition
of accumulation, price, social relations.

    The condition of payment balance is an objective parameter of  economic
health of the country. In all countries with  a  market  economy  the  state
constantly  carries  out  operative  and  strategic  regulation  of  payment
balance by  influence  on  export  and  import,  movement  of  the  capital,
increase and downturn of rates  of  national  currencies,  marketcontractual
politics and participation in the international economic integration.

    One more of the  main  objects  of  regulation  -  price.  Changes  and
structure of the prices reflect a condition of economy.  At  the  same  time
prices  strongly  influence  structure  of  economy,  condition  of  capital
investments, stability of national currency, social atmosphere.

    The state regulating instances aspire to influence and other objects of
state regulation of economy, for example, to interest  private  concerns  in
development of scientific researches and introduction of their  results,  in
export of goods, capitals, both saved knowledge and experience  are  studied
and the laws on observance of rules of  a  competition,  social  protection,
protection of an environment are improved.

    The objects of state economy regulation of differ depending on a  level
of tasks, solved by them. It is the following hierarchical levels:  a  level
of firm;  region;  branches;  sectors  of  economy  (industry,  agriculture,
service); economy as a whole (economic cycle; the  money  manipulation;  the
prices); global (social relations,  ecology);  economic-political  relations
with foreign countries, integration processes).

    The general purpose of state regulation of economy is the economic  and
social stability and strengthening existing building inside the country  and
abroad, adaptation to its varied conditions.

    From this general purpose the tree so-called of the  concrete  purposes
is distributed, without which realisation the general  purpose  can  not  be
achieved. These concrete purposes indissoluble are  connected  with  objects
of state regulation of economy. The purpose - alignment of a business  cycle
- is directed on the object, that is on a business cycle; improvement of  an
environment - on an environment etc.
    It is obvious, that the purposes, first,  uncommon  on  importance  and
scales and, secondly are in close interrelation. More often one purpose  can
not be put and is achieved without dependence from others. For  example,  it
is impossible to present stimulation  without  creation  of  favourable
conditions  of  accumulation  of  the  capital,  without  alignment   of   a
conjuncture,  perfection  of  branch  structure  of  economy,  stable  money

    The  listed  purposes  partially  block  each  other,  one  can  appear
temporarily more important and to subordinate to  herself  others  depending
on a real economic and social situation,  level  of  comprehension  of  this
situation  by  the  subjects  of  state  regulation  of  economy  and   from
established by governmental bodies on the given interval of time  of  system
of priorities of the purposes. Any of the above named  purposes  can  serve,
to promote or to interfere with achievement of other purpose.  The  concrete
purposes inside a tree of the purposes can be primary,  secondary,  tertiary
etc. For example, in conditions of crisis the  primary  purpose  becomes  an
exit from crisis in narrow concrete sense - revival of  a  conjuncture.  All
other purposes submit to it.

    The means of state regulation  are  subdivided  on  administrative  and

    The administrative means are not connected with creation of  additional
material stimulus or danger of financial damage. They are based on force  of
state authority and  include  measures  of  an  interdiction,  sanction  and

    For example, the French authorities have forbidden  to  build  the  new
industrial enterprises within the limits  of  Parisian  agglomerations,  and
for achievement of this purpose they did not increase the taxes by  the  new
enterprises, have not entered rude the penalties, which  could  be  economic
measures,  and  simply   have   stopped   licensing   for   new   industrial

    Or, the government of the Netherlands has solved to  use  former  naval
base as passenger and trade port, by  creating,  thus,  new  sphere  of  the
appendix of the capital. In result in area of  port  the  economic  activity
has increased.

    The administrative means of regulation in the advanced  countries  with
market economy are used in insignificant  scales.  Their  sphere  of  action
basically is limited to protection of an environment  and  creation  of  the
minimal household conditions rather poorly of socially protected  layers  of
the population. However in critical situations their  role  strongly  grows,
for  example,  during  war,  emergency  in  economy.  The  most  large-scale
administrative actions on regulation of  economy  in  after  War  period  of
Japan were currency reformed and made smaller of conducting concerns.

    The economic means of state regulation are  subdivided  into  means  of
money credit and budget politics.

    The independent complex  tool  of  state  regulation  of  economy  (and
simultaneously by its object) is the public sector in economy.  The  maximum
form of  state  regulation  of  economy  is  a  state  economic  programming
covering the numerous purposes  and  all  tooling  of  state  regulation  of
economy. About public sector and economic programming  the  speech  will  go

       The basic economic means are:

         1)        Regulation of the registration  rate  (discount  politics
    which is carried out by the central bank);
         2)        Establishment and change of  the  sizes  of  the  minimal
    reserves, which financial institutions of the country  are  obliged  to
    keep in the central bank;
         3)        Operation of official bodies in the  market  of  valuable
    papers, such as issue of the  state  obligations,  trade  by  them  and
    Through these tools the state aspires to change a parity  of  a  supply
and demand in the financial market  (market  of  the  loan  capitals)  in  a
desirable direction. In process of  relative  decrease  of  a  role  of  the
markets  of  the  free  capitals  in  financing  capital   investments   and
especially in connection with reduction of a role of a share stock  exchange
and growth of self-maintenance of the large companies  by  financial  assets
the effectiveness  of  these  tools  in  the  most  advanced  countries  has
weakened a little.

    The direct state economic regulation is carried out by means of  budget
politics. The state budget is an  annual  plan  of  the  state  charges  and
sources of the incomes of their  financial  covering.  The  project  of  the
budget annually is discussed  and  is  accepted  by  a  legislative  body  -
parliament of the country, state or government by assembly.  After  the  end
of financial the year the proxy representatives of the  executive  authority
report about the activity on mobilisation of the incomes and realisation  of
the charges in conformity with accepted in the previous year by the  law  on
the budget.

    The state budget always represents the compromise reflecting  a  parity
of forces of the  basic  groups  of  carriers  of  various  social  economic
interests.  The  charges  of  the  state  budget  carry  out  functions   of
political, social and economic regulation.

    The first place in the budget charges is occupied with social  clauses:
the special grants,  education,  public  health  services  etc.  In  it  the
overall objective  of  budget  politics,  as  well  as  all  state  economic
politics in general - stabilisation, strengthening and  adaptation  existing
social economic building to varying conditions is shown. These  charges  are
called  to  soften  differentiation  of  social  groups,  it  is  inevitable
peculiar to market character.

    In expenses for economic needs the budget  grants  to  agriculture  are
usually allocated. Any state can not be interested in  ruin  the  peasantry,
farmers.  And  though  in  the  external  economic  politics  of  government
sometimes temporarily endow interests of the domestic manufacturers  of  the
agrarian goods, supposing foreign agricultural production on a  home  market
in reply to concession of the trade partners, as a rule governments  support
average and large farmers land.

    The charges on arms and material maintenance of external politics,  and
also  administrative  charge  influence  demand  for  consumer   goods   and

    To the tactical  purposes  of  budget  regulation  the  charges  on  an
internal state duty (for example, prescheduled repayment of a  part  of  the
debt), sizes of the charges on the credits both grants to  the  private  and
state enterprises, agriculture, on creation and perfection of objects of  an
infrastructure, on purchase of arms and military construction serve.

    The sizes of these charges essentially influence scales of  demand  and
size of the investments. During crises and depressions the  charges  of  the
state budget on the economic purposes, as a rule, grow, and in time when  of
slowing conjuncture - are reduced.

    The charges on crediting of export, insurance of the export credits and
taken out capital financed from the budget,  stimulate  export  and  in  the
long-term plan improve payment balance, open for a national economy the  new
foreign markets, promote strengthening of national currency, maintenance  of
deliveries on a home market of the necessary goods because  of  a  boundary.
It is the external economic aspect of politics of the budget charges.

    The effectiveness of state regulation of economy with the help  of  the
budget charges depends, first, on the relative  sizes  of  the  spent  sums;
secondly, from structure of these charges; thirdly, from efficiency  of  use
of each unit of spent means.

    The main tools of mobilisation of financial assets for  a  covering  of
the state charges are the taxes. They also are widely used for influence  on
activity of the subjects of economy. It is a special role of the taxes.  But
main role of the taxes - regulating. The state regulation through the  taxes
depends in a decisive degree on a choice of tax system, and also from  kinds
and sizes of tax privileges.

    The taxes in state regulation of economy play a double role: on the one
hand, it is the main source of financing of the state charges, the  material
basis of budget politics, on the other hand, is the tool  of  regulation.  A
task of state budget bodies - not simply to impose with the taxes  those  or
other sources of receipt of means and to create the  adjusted  mechanism  of
influence on economic behaviour of the legal and physical persons  is  thin.
For this purpose temporarily or selectively given tax  discounts,  delay  of
payment of the taxes are used.

    The special place among means of state regulation of economy  which  is
carried out through the taxes, plays accelerated  amortisation  of  a  fixed
capital and connected with it(him) formation(education) and  realisation  of
the latent reserves carried out within the framework  of  the  sanctions  of
the ministries of the finance.

    Accelerated amortisation of a fixed capital in modern conditions is  by
the main  means  of  stimulation  of  accumulation,  structural  changes  in
economy and  important  tool  of  influence  on  an  economic  cycle  -  the
employment. Essence it in a separation of physical process  amortisation  of
machines, equipment, buildings and structures from the production  costs  of
carry of cost of material carriers of a fixed capital on the made goods  and
services. Changing the rates and order amortisation,  the  state  regulating
bodies determine that part of the clean profit, which can be  released  from
the  taxes  by  inclusion  in  production  costs  and  then  is  listed   in
amortisation fund for financing in the further new capital investments.

    At check of correctness of payment of the tax from the profit  the  tax
inspectors agree with accounting of production costs  or  services  only  if
the amortisation deductions were made in conformity  with  norms  solved  by
the ministry of the finance. The size of the balance profit, rate  and  size
of the tax, and also paid dividends depends on it.

    The variation of norms accelerated amortisation of a fixed  capital  is
widely used in all advanced countries as  a  means  of  state  tactical  and
structural politics, and also for stimulation of scientific  researches  and
introduction of their results, for financing nature protection of  measures.
The effect of a variation of norms of amortisation deductions  is  swept  up
within a favourable conjuncture, i.e. in the periods of slowing  and  crises
the effectiveness of amortisation politics weakens. The  worse  conjuncture,
the more difficult & is to realise profit, it  is  less  than  opportunities
for self-financing, and the amortisation  privileges  given  by  the  state,
becomes  less  attractive  stimulus  for  the   private   investments.   The
privileges on  accelerated  amortisation  are  equivalent  to  reduction  of
receipts from the taxes from profits in the  state  budget.  Result  can  be
increase of other taxes or growth state duty.

    The state capital investments are carried out substantially  in  public
sector of economy playing a major role in state regulation  of  economy.  It
is simultaneously object and tool of influence on a private enterprise.

    The public sector represents a complex of economic objects,  wholly  or
partially belonging to the  central  and  local  state  bodies.  The  public
sector existed in many countries  long  before  development  of  capitalism,
including mail, partially transport service,  manufacturing  of  the  weapon
etc. On a measure forming systems of state regulation of economy  the  state
built, redeemed at the  private  proprietors  economic  objects,  mainly  in
sphere of an infrastructure, heavy industry, which  functioning  was  always
favourably and it is necessary for a national economy, but not always it  is
favourable from the point of view of the private capital.

    In one country the public sector has arisen basically as  a  result  of
nationalisation of a number of branches and enterprises (in  France,  Italy,
Great Britain, Austria), in others the state built or  got  ruined  economic
objects (in USA, Sweden, Japan). In the first group  of  the  countries  the
share of public sector in national riches is higher, than in second.

    Significant parts of public sector are objects of an infrastructure, in
the majority unprofitable. Other part - the state  enterprises  in  raw  and
power branches, where are required the large investments,  and  turnover  of
the capital slow. Profitability of state-owned  firms,  as  a  rule,  below,
than private. A part of public sector is packages  of  the  actions  of  the
mixed private-state companies.

    The existence in conditions of a market economy of  sectors,  which  in
the activity is  guided  by  principles  a  little  bit  distinguished  from
principles of private concerns, allows using public sector for the  decision
of nation-wide economic tasks, increasing money of a private enterprise.

    The exclusive profit, and frequently and profit in general, is not  the
paramount purpose of activity of public sector in an infrastructure,  power,
raw branches, , in preparation and retraining  of  the  staff,  in  the
field of protection of an environment, as high profits  nobody  requires  of
these spheres, and the losses become  covered  from  the  budget.  Therefore
public sector has become the supplier  of  cheap  services  (in  particular,
transport, mail-telegraphic), electric power  and  raw  material,  reducing,
thus, costs in private sector.

    The public sector as a means of state regulation of economy is actively
used. So, in conditions of deterioration of a conjuncture,  the  depressions
or crisis, when the private capital investments are reduced,  investment  in
public sector, as a rule, grow. Thus,  the  governmental  bodies  aspire  to
counteract recession of manufacture and growth of unemployment.  The  public
sector plays an appreciable role in state  structural  politics.  The  state
creates new objects or expands and reconstructs  old  in  those  spheres  of
activity, branches or regions, where the private capital  connected  is  not
enough. So, the public sector plays a huge role in economy, preparation  and
retraining of the staff. The state-owned firms are engaged also  in  foreign
trade, export of the capital abroad, frequently acting by  the  pioneers  in
introduction  of  the  national  capital  in  any  country   (for   example,
participation of the German concern  Volkswagen , federal taking place  in
property federal and ground governments, in motor industry of Czech).

    In the whole public sector serves  addition  of  a  private  enterprise
there and such measure, where and as far as the motivation for  the  private
capital  appears  insufficient.  In  result  the  public  sector  serves  to
increase of efficiency of a national economy as a whole and is one of  tools
of redistribution  of  a  total  internal  product  (the  complete  internal
product  is  a  cumulative  cost  of  production  of  sphere   of   material
manufacture and spheres of services, irrespective of  a  national  accessory
of the enterprises located in territory of the given country).

    The sizes of public sector, its share in national economy,  change  not
only  as  a  result  of  new  construction  and  purchase,  but  also  as  a
consequence of a privatisation - sale profitable, reconstructed  objects  of
public sector to  the  private  capital.  In  80-th  and  90-th  years  this
tendency appreciably has amplified.

    Alongside with the listed tools of state regulation of  economy  having
internal economy the orientation,  an  arsenal  of  means  of  the  external
economic regulation exists.

    Practically all levers of influence on process of  reproduction  inside
the country  render  essential  influence  on  foreign  economic  relations:
change of the registration rate, taxation new privileges and grants  on  the
investment in a fixed capital etc.

However there are also special tools of direct influence on economic
communications with abroad. It is, first of all, a measure of stimulation
of export of goods, services, capitals, scientific and technical and
administrative experience: crediting of export, warranting of the export
credits and investments abroad, introduction or cancellation of
quantitative restrictions, change of the duty in foreign trade; measures on
attraction or restriction of access of the foreign capital in a national
economy, change of conditions of its functioning, qualitative selection
(from the point of view of a branch orientation and technological level)
acting from abroad capital, attraction in the country of a foreign labour,
participation in the international economic organisations, integration
state associations.

    The separate tools of state  economic  politics  can  be  used  in  the
various purposes, in various  combinations  and  with  different  intensity.
Depending on character of the purposes the place of that or  other  tool  in
an arsenal of means of state regulation of economy in  the  concrete  period
will vary.

    The maximum form of state regulation of economy is the  state  economic
programming. Its task - complex use in the global purposes of  all  elements
of state regulation of economy.

    In process of  complication  of  tasks  on  regulation  of  economy  of
government of steel to formulate short-term,  intermediate  term  and  long-
term tasks to determine the order of their decision and  bodies  responsible
for performance of these decisions,  to  allocate  necessary  means  and  to
determine the order of financing.

    Objects  of  such  target  programs  usually  are  the   branches   (in
particular,  agriculture);  regions;  social  sphere  (for  example,  social
economic adaptation settlers, maintenance by  their  work  and  habitation);
various directions of scientific researches.

    The programs  are  usual  and  extreme.  The  usual  intermediate  term
programs are made, as a rule,  for  five  years  with  annual  updating  and
prolongation for one year (sliding programming). The  extreme  programs  are
developed in critical situations, for  example,  in  conditions  of  crisis,
mass unemployment dangerous inflation;  they,  as  a  rule,  short-term.  In
toolkits of their realisation the appreciable place is occupied  with  means
of administrative regulation.

    The level of development of state programming in the separate countries
is various. Practically in  all  countries  of  market  economy  the  target
programs are carried out. One of oldest - regional-power target  program  on
development of pool of the river Tennessee in USA,  program  of  development
of nuclear power in France, economic development of the south of Italy.

    The national extreme programs on restoration  of  economy  of  Southern
Korea after war, on  structural  reorganisation  and  privatisation  of  new
grounds (East Germany) after connection of GDR to Germany are known.

    In a citadel of a market economy - USA - the  national  programming  is
not present, but widely target and extreme programs are applied.  Obviously,
the distinctions in a degree of development of programming in  the  separate
countries depend on character  and  scales  of  tasks,  which  economic  and
social situation puts before the state.

    The subjects of economic programming - official bodies responsible  for
drawing up of the programs,  their  direct  realisation  and  control  above
them. The programs are developed by  a  special  state  body  (for  example,
Commissaries  on planning in France), and if  it  is  not  present,  by  the
ministries of economy and finance  or  special  ministry  system.  Thus  the
ministry of economy, as  a  rule,  prepares  the  project  of  the  program,
formulates hierarchy of the purposes, terms and sequence of  realisation  of
separate measures, names instances  which  are  bearing  responsibility  for

    The ministry of the finance develops  the  plan  of  financing  of  the
program.  The  representatives  of  the  central   bank,   unions   of   the
businessmen, commercial and industrial chambers,  trade  unions  are  widely
involved in development of the programs, the various commissions and  advice
of the experts are created.

    The program and financial plan  are  annually  (in  connection  with  a
sliding principle of prolongation) affirmed by parliament, also of time  per
one year the reports on their performance are heard.

    The state economic programming has appeared  rather  effective  at  the
decision of a number of economic and social tasks, however  this  efficiency
has objective borders. In conditions of market economy the  programming  can
be  only  indicative,  that  is  to  carry   target-stimulating   character.
Nevertheless, it has appeared a rather effective means of  the  decision  of
tasks of a different level; if the state programs frequently also  were  not
realised completely, all of them - provided social economic  development  in
a desirable direction. That circumstance is not less  important  also,  that
the programming allows systematically using all means  of  state  regulation
of economy, to avoid discrepancy and inconsistency  of  regulating  measures
of separate official bodies.

    State financial  stimulation,  orders  and  the  purchases  within  the
framework of  the  economic  programs  render  appreciable  and  non-uniform
influence  on  competitiveness  of  the  separate  companies,  situation  of
branches, regions, of social groups  and  cause  resistance  what  interests
have appeared restrained. On state programming systems therefore  constantly
there  is  a  versatile  influence  reflecting  inconsistent  interests   of
separate groups, public forces, political groups.

      Let's consider the mechanism of state regulation on an example of
                           politics of the prices.

    Contrary to widespread at many to opinion, that  in  the  countries  of
market economy money appearing occurs  spontaneously,  actually  prices  are
object of constant attention and regulation on the part of  the  state.  The
prices are one of critical points economic  and  social  -  political  life,
where the group interests of the manufacturers and consumers, wholesale  and
retail dealers, trade unions and unions of the  businessmen,  exporters  and
importers collide. The prices mention  interests  everyone  and,  naturally,
around  of  them  there  is  a  struggle  in  parties  and  parliaments,  in
government and on negotiation of the social partners, at  the  international

    The influence on the prices serves to  the  global  purposes  of  state
regulation  of  economy,  purposes  of  tactical  and  structural  politics,
struggle with inflation, amplification of national  competitiveness  in  the
world markets and mitigation of social intensity.  The  influence  of  state
economic politics on other objects of regulation, in turn, is  reflected  in
processes of formation of the prices.

    The concrete actions in the field of the prices can have short-term  or
even the emergency purposes, which can in  the  given  concrete  moment  not
coincide with other purposes, but at  the  end  they  always  serve  of  the
general  purpose  of  state  regulation  -  optimisation   of   rates   both
proportions of economic development and stabilisation of social system

    The classical political economy examined the prices, freely  developing
in the market, as the main  element  of  the  mechanism  of  maintenance  of
balance between a supply and demand. However actually  there  was  never  of
ideal general and complete  freedom  money  appearing.  All  question  in  a
degree and forms of restriction of free game  of  the  prices.  Even  if  to
abstract  from  opportunities  of  arrangement  of  the  manufacturers   and
sellers, during all history of capitalism  it  is  possible  to  look  after
influence of the state on the prices.

    The tariffs for services of state iron roads, mail, telegraph, sale  of
the foodstuffs from state stocks per poor harvest  years,  customs  politics
and indirect taxation essential image influencing on the internal  price,  -
here the not complete list of measures of state price control for  last  100
- 150 years.

    The first world war which has begun after  it  depression  and  crisis,
have served as the moment of changes in a history of  state  price  control.
K. Muller wrote in this occasion, that the political and economic shocks  in
the state and society have caused comprehension that  in  interests  of  the
best functioning of a economy, more uniform distribution  and  avoidance  of
danger of revolutionary revolution it would be  expedient,  that  the  state
has undertaken care of regulation of economic  process  and  maintenance  of
the fair prices.

    Attempts to adjust the prices in conditions of inflation and crisis  by
the foreign trade politics have appeared insolvent. To the middle of the 30-
th years in many advanced countries with market economy the laws  giving  to
the state powers on influence on the prices, down  to  their  freezing  were
accepted, and the state  measures  on  influence  on  the  prices  become  a
component of state regulation of economy.

    The  state  measures  on   price   control   can   carry   legislative,
administrative and judicial character. The laws,  accepted  by  parliaments,
create a legal basis of the relations between  the  economic  subjects,  and
also between them and state in sphere money appearing. The complex of  these
laws represents the price right entering by a component into civil  law.  On
the  basis  of  this  right  the   authorised   state   bodies   carry   out
administrative activity on price control. In case  of  infringement  of  the
laws guilty can be involved in the judicial responsibility.

    Party fractions independent deputies bring in the administration  bills
of the prices, as well as on other economic  questions,  to  parliaments  or
government, is direct measures on price control carry out the ministries  of
economy, finance and central bank. In a number of the  countries  there  are
ministries of trade,  agriculture.  They  also  render  influence  on  money
appearing. In many countries at the end of 60 - in the 70-th years  ministry
advice under the prices was created, they have is observant  -  consultative

    In each country at government or its separate bodies there  are  expert
committees, where the known experts, and advice, in which they  meeting  the
representatives  of  trade  unions,  unions  of   the   peasants,   dealers,
businessmen and representatives of state bodies enter;  the  committees  are
called to advise state bodies on the  prices  and  to  express  the  opinion
concerning the price administration bills.

    Let's consider state price control in a historical and logic sequence.

    The supervision over the prices is the primary form of  state  activity
in this area. The business not only that from it began state price  control;
now supervision over the prices forms the basis, on which all state  actions
in this  area  are  based.  In  supervision  over  the  prices  the  central
statistical managements are engaged. The independent researches of  movement
of the prices frequently will  carry  out  the  research  centres  of  trade
unions  special  commissions  under  orders  of  a  management  of  parties,
international organisations.

    Overall objective of supervision behind the prices on the part of state
bodies and  social  partners  -  change  of  growth  of  cost  of  life  for
definition of an index of annual nominal increase  of  wages  and  pensions,
and also for finding - out of influence of a rise in  prices  on  production
costs and  national  competitiveness.  The  state  can  affect  the  prices,
entering or cancelling quantitative  and  customs  restrictions  in  foreign
trade, entering in  integration  unions,  changing  the  registration  rate,
varying  the  taxes,  carrying  out  a  currency  issue  etc.  The  indirect
influence on  the  prices  is  rendered,  in  essence,  by(with)  all  state
regulating actions(shares), with what the purposes they did not serve.

    The state intervention in process money appearing is carried out by the
overestimate,  authorised  by  governmental  bodies,  of  production   costs
through  inclusion  in  the  cost  price  overestimated   amortisation   and
deductions in other funds. As a result of it in the whole branches there  is
a situation, when  the costs prop up the price , i.e. settlement  (instead
of valid) the production costs appear at all  enterprises  of  branch  as  a
result of the privileges, announced by government, are  so  high,  that  the
increase of the prices becomes itself by the understood phenomenon,  and  as
the  privileges  are  distributed  to  all  branch,  internal  branches  the
competition  in  conditions  of  a  favourable  conjuncture  can  not  be  a
sufficient obstacle for a rise in prices.

    Direct state intervention in  process  money  appearing  is  the  state
politics of an establishment of the prices on the so-called excise goods.

    The direct influence on formation of the prices is  rendered  with  the
state grants. One of kinds of such grants - price  -  provides  decrease  of
the prices by special surcharges to the manufacturer or consumer.

    The direct influence on the prices and leadership in the prices  has  a
place in branches, where the share of the state in consumption of the  goods
and services is significant, for  example,  in  military  industries,  in  a
number down-branches of construction. The governmental bodies, being by  the
constant buyers or customers of the certain kinds of the goods and  services
at private concerns, establish under the arrangement  with  the  partners  
the concrete prices , which become then base prices for branch.

    Effective means of price control is the tax  to  additional  cost.  The
manufacturers include this tax in the price of the  goods  or  service,  and
difference of change of the  rates  of  this  tax  directly  influences  the

    The special direction of state economic politics is the state influence
on the foreign trade prices. State encouragement of export, clearing of  the
exporters of the taxes (return of the taxes), and in some  countries  -  the
export grants, granting of the  soft  loans  and  transport  tariffs  by  an
essential image are reflected in conditions of a price  competition  in  the
world market.

    Establishment of the prices on mineral raw material extracted in  state
mines, on the electric power from state power stations  and  railway,  mail-
telegraphic tariffs - example of fixing of  the  prices  on  the  goods  and
services state sector.

    These is artificial undercharges and the tariffs  promote  decrease  of
production  costs  in  a  private  enterprise  and  increase   of   national
competitiveness for the account is artificial of the  lowered  profitability
or deficiency of these objects of a state ownership.

    Fixing of the prices or establishment of limits of  their  increase  in
public sector - typical means of administrative economic regulation.  It  is
seldom applied and, as  a  rule,  in  conditions  of  a  market  economy  is
inefficient in long-term and even intermediate term aspect. It is used  more
often in exclusive cases as a means of easing of social intensity.

    National bodies carry out the control above the prices for the  certain
kinds of the goods.

    Examples can serve an establishment of the prices  on  coal  and  black
metals by  the  European  association  of  steel,  annual  establishment  of
procurement  prices  on  agricultural  products  in  the   European   union,
participation  of  the   countries   in   the   international   conferences,
organisations on separate  kinds  of  the  goods,  tariffs  for  an  airline

    One of the difficulties of the questions of economic  politics  is  the
management of inflation. In the world there are  not  enough  of  countries,
where in second half 20 centuries there was  no  inflation.  Though  it  has
come on change of  former  illness  of  market  economy,  which  has  become
obviously to weaken, - cyclic crises.

    The inflation is a depreciation of  money,  decrease  of  their  buying
power. Usually inflation has in the basis not one, and  some  interconnected
reasons, and are shown it not only in increase of  the  prices  -  alongside
with open, by price inflation has a place latent, or  suppressed,  inflation
shown first of all in deficiency, deterioration of quality of the goods.  In
literal  translation  with  the  Latin  inflation  means  swelling,   i.e.
overflow of channels of the manipulation  by  the  superfluous  paper  money
which has been  not  supplied  with  the  appropriate  growth  of  commodity

    The reasons of inflation are diverse. Usually in a basis  of  inflation
the discrepancy of money demand and commodity weight - demand for the  goods
lays and services exceeds the sizes goods turnover, that creates  conditions
that the manufacturers and suppliers lifted the  prices  irrespective  of  a
level of costs. A disproportion between a supply and demand, excess  of  the
incomes above the consumer charges can  be  deviated  by  deficiency  budjet
(charges of the state exceed the incomes); by excessive  investment  (volume
of the  investments  exceeds  opportunities  of  economy);  by  outstripping
growth of wages in comparison with growth of  manufacture  and  increase  of
productivity of work; by an any establishment of  state-set  prices  causing
skews in size and structure of demand; by other factors.

    Let's refer as an example to a sharp aggravation  of  deficiency  state
budjet in Russia in the second half of 80-th years (1985-1989 years -  break
between profitable and account parts of the state budget has grown, with  18
up to 120 billion rub., or from 3,5 % up to 19 % to the national  income  of
the country). The increased deficiency  has  put  huge  harm  to  the  money
manipulation,  has  urged  on  inflation.  The  unjustified  money  payments
sharply have worsened a situation in the consumer market.

    The reasons of occurrence  of  inflation  can  be  both  internal,  and
external. To the external  reasons  concern,  in  particular,  reduction  of
receipts from foreign trade, negative  results  of  the  foreign  trade  and
payment balances. The inflationary process in Russia  strengthened  fall  of
the prices in the global market on fuel and colour metals  making  important
clause of our export, and also adverse conjuncture in the  grain  market  in
conditions of significant import grain. In Hungary,  which  economy  in  the
greater measure depends on a condition of foreign economic  relations,  just
the external factor (deterioration of  conditions  of  international  trade,
increase of the external debt) played  a  hardly  probable  not  determining
role  in  amplification  inflationary  processes.  Thus  the   politics   of
escalating of export  and  restraint  of  import  reduced  growth  internal,
wholesale and consumer costs.

    The inflationary rise in prices alongside with the  marked  factors  is
caused by the deeper reasons having basic character. Let's  consider  on  an
example of Russia.

    First, as  a  rule,  one  of  sources  of  inflationary  processes  the
deformation  of  economic  structure  expressing  in  essential  backlog  of
branches  of  consumer  sector  at  obvious  super-changed  development   of
branches of heavy industry serves and is  especial  of  military  mechanical

    Secondly, inability to overcome inflation is deviated by  lacks  of  an
economic mechanism. In conditions of  the  centralised  economy  practically
there was no feedback, there were no effective economic levers,  which  were
capable to adjust a  parity  between  money  and  commodity  weight;  as  to
administrative terminators, they  worked  insufficiently  effectively.  In
system of financial planning state plan played a determining  role,  instead
of Ministry of finance and not the State  Bank,  which  worked  under  it,
supporting the scheduled tasks financial and  money  resources  without  any

    Becoming traditional the politics of high rates of economic development
ignored  real  resource  opportunities.  To  support  rates,   the   capital
investments were constantly increased. In result the growth  of  consumption
restrained; the efficiency of capital investments fell that  negatively  had
an effect for economic growth and current manufacture.  The  means  for  new
technology did not suffice, and continuous growing of fund  of  accumulation
did not give desirable result. A problem  died  any  more  in  amount  of  a
capital investment, and in their efficiency, structure to reconstruct  which
economic mechanism prevented.

    The contradiction and deficiencies deleted there are  more  means,  and
the financial and budget terminators were  very  weak  or  practically  were
absent. Unbalanced took place not only in the consumer market. Its  basis  -
increasing disproportion in the  manufacture,  strengthening  financially  -
financial not of balance, defects in system of planning,  in  the  mechanism
of the money manipulation, in absence of antiinflationary regulation.

    Examining the reasons of  inflation,  the  economists  will  carry  out
distinction between two  its  kinds  -    by  inflation  of  the  buyers  
(inflation of demand) and  by inflation of  the  sellers    (inflation  of
costs). In effect, it is two, as a rule,  interconnected,  but  unequivalent
reasons of inflation: one lays on the  part  of  demand  (surplus  of  money
resources at the buyers), another - on the part  of  the  offer  (growth  of
industrial costs).
    Depending  on  character  of  inflation  and  rates  of   increase   of
inflationary processes distinguish the following types of inflation:
    1) Slow inflation, for which the rather low rates of a rise in  prices,
approximately  up  to  ten  or   several   percents   per   one   year   are
characteristic. Such inflation is inherent in the majority of the  countries
with the advanced market economy, and it is  not  represented  by  something
unusual. The average level of inflation on the  countries  of  the  European
community has made for last years about 3 - 3,5%.
    2) Galloping inflation is difficult in ruling.

The rate of its growth is expressed usually in two-place figures. Such  high
rates in the 80-th years were observed, for example, in  many  countries  of
Latin America, some countries  of  Southern  Asia.  The  galloping  rise  in
prices  shows  itself  unequally  and  has  not  the   strictly   designated
quantitative parameters. The inflationary processes depend  on  a  level  of
development of the country, social economic structure  unsimilar  regulation
of price processes. In the period after war - the period of  capitalism  has
gone through two large waves  of  inflation:  at  transition  from  military
economy of a market type (1945-1952) and  under  influence    of  petroleum
shocks , is sharp shocked all structure of the world  and  internal  prices
(1974-1981). But it was possible to western countries to  stop  inflationary
processes, using various methods of  antiinflationary  regulation.  For  the
small countries, for example of Sweden, it was important to  avoid  imported
inflation, for what the increase of the  prices  of  national  currency  was
used. Other countries resorted to  methods  of  restraint  of  inflation  by
means of money-credit politics.
    3) The greatest  danger  represents  super-inflation.  Its  conditional
boundary - monthly (within three-four months) rise in prices more than  50%,
and annual will be expressed four numbers in  figures.  The  feature  super-
inflation  that  it  appears  practically  unguided;  the  usual  functional
interrelations and habitual levers of management of the prices do not  work.
On complete power the printed machine tool works, the gamble  develops  mad.
Manufacture will be disorganised. To stop or to brake super-inflation it  is
necessary to resort  to  extreme  measures.  But  there  is  no  unequivocal
representation about that, how to struggle with super-inflation. The  rather
inconsistent recipes are assumed various, quite often.
    To outstrip inevitable, increase, expected by all, of the  prices,  the
owners of hot money aspire as soon  as  possible  gets  rid  of  them.  In
result is developed great demand; those goods are bought  up  first  of  all
which can serve a  means  of  partial  preservation  of  the  savings  (real
estate, subjects of art, precious metals). The people  work  under  pressure
inflationary crisis , and it grow a rise  in  prices,  and  the  inflation
begins to feed itself.
    Classical example super-inflation - conditions which has been usual  in
Germany and a number of other  countries  after  the  First  World  War.  In
Germany in 1923 the level of a rise in prices was estimated 10  numbers  and
12 numbers by numbers; the wages should be  spent  immediately,  for  within
day of the price on products raised repeatedly.
    The process of inflation is inconsistent. On the one  hand,  the  money
profits are increased, the capital investments extend, and  with  another  -
the rise in prices conducts to depreciation of the unused capital.  Win  not
everything, and, first of all strong  firms  having  the  modern  equipment,
perfect organisation of manufacture. In the best rule(situation)  there  are
social groups living on the not fixed  incomes,  if  their  nominal  incomes
will grow by rate overtaking a rise in prices.
    From inflation the people who take money on credit can win, if  not  is
stipulated, that  percent  for  the  credit  should  take  into  account  an
inflationary rise in prices.
    But whichever there were positive functions of inflation, leaving  from
under the control and even remaining rather weak,  adjusted,  the  inflation
renders on a course of economic development the whole complex especially  of
negative phenomena.
    To negative consequences of inflationary processes concern:
    - Decrease of the real incomes of the population;
    - Depreciation of the  savings  of  the  population  (the  increase  of
percents on the contributions, as a rule, does not compensate  fall  of  the
real sizes of the savings);
    - The loss  at  the  manufacturers  of  interest  in  creation  of  the
qualitative goods (is increased  release  of  the  goods  of  poor  quality,
manufacture of the rather cheap goods) is reduced;
    - Restriction of sale of agricultural products in  city  by  the  rural
manufacturers by virtue of fall of interest, in expectation of  increase  of
the prices on the foodstuffs;
    - Deterioration of conditions of life mainly at the representatives  of
social groups with the firm incomes  (pensioners  serving,  students,  which
incomes are formed for the account state budget);
    - Easing positions of imperious structures (is  reduced  trust  to  the
programs and measures planned and carried out government).
    The management of inflation represents a major problem money-credit and
in the whole economic politics. The ways of management  are  ambiguous,  are
inconsistent on the consequences. The range of  parameters  for  realisation
of such politics can be rather narrow: on the one hand, it  is  required  to
constrain growth of an inflationary spiral, and with another  -  to  support
stimulus of manufacture to create conditions for saturation  of  the  market
by the goods.
    The management  of  inflation  assumes  use  of  the  complex  measures
assisting in a certain measure to combine an insignificant  rise  in  prices
with stabilisation of the  incomes.  The  tools  of  management  of  process
differ depending on character and rate of inflation,  features  of  economic
conditions,  specificity  of  an  economic  mechanism   of   the   different
    For antiinflationary regulation two are used such as economic politics:
    1) Politics directed on reduction of budget deficiency, restriction  of
credit expansion, restraint of money issue. In conformity with material  the
recipes apply targets - regulation of rate of a gain of money weight in  the
certain limits - according to rate of growth of a total national product
    2) Politics of price control and incomes having by the purpose  to  co-
ordinate growth of earnings with a rise  in  prices.  One  of  means  serves
index of the incomes determined by a level of a minimum conditions  of  life
or a standard consumer basket and connected with dynamics  of  an  index  of
the prices. For  restraint  of  the  undesirable  phenomena  the  limits  of
increase  or  freezing  of  wages  can  be  established,   to   be   limited
distribution of the credits etc.
    The influence on inflationary process in conditions of a sharp rise  in
prices requires special measures. So, for elimination of consequences    of
a petroleum shock , struck on economy  of  USA  in  second  half  of  70-th
years, the registration rates were increased, the requirements to the  sizes
of reserve funds are amplified, the system of the  taxation  is  stipulated.
To lower rates of an inflationary rise in prices  it  was  possible  not  at
once: from 13-14 of % in 1979 they have decreased to 4 % after  about  three
years - in 1982.
    As the experience testifies, to stop inflation with  the  help  of  one
organisational measures rather difficulty if not to tell it  is  impossible.
The structural reform directed on overcoming of  disproportions,  that  has
arisen in economy is necessary for this purpose.
    The concrete methods of restraint of inflation, dose and sequence  of
application of means, attracted for treatment, depend on  statement  of  the
correct diagnosis. To put the diagnosis - means, to determine  character  of
inflation, to allocate the factors,  basic  and  connected  to  them,  which
makes the  growth  of  inflationary  processes.  In  this  case  it  is  not
necessary to expect for any ready circuits, and series of  extreme  measures
to  finish  with  inflation.  Each  inflation  is   specific   and   assumes
application of such recipes, which correspond  to  character  and  depth  of
    Constant consequence in  particular  of  inflationary  process  is  the
unemployment. By virtue of importance of this problem the state accepts  the
special measures for regulation of the market of work.
    The market of work  - important sphere economic and social -  political
life of a society. In the market  of  work  labour  receives  an  estimation
cost, the conditions of its employment, including  size  of  wages,  working
conditions, opportunity of  reception  of  education,  professional  growth,
guarantee of employment etc are defined. The market  of  work  reflects  the
basic  tendencies  in  changes  of  employment,  its(her)  basic  structures
(branch, vocational, demographic), i.e. in  a  public  division  of  labour,
mobility of a labour, scales and changes of unemployment.
    The unemployment is a social economic phenomenon, at which the part  of
a labour (economically of active population) is not engaged  in  manufacture
of the goods and services. The unemployed  alongside  with  engaged  form  a
labour of the country. In  real  economic  life  the  unemployment  acts  as
excess of a labour above demand for it(her). To  the  unemployed,  according
to statistics of many advanced countries, the  persons  who  have  been  not
engaged on the moment of realisation of interrogation about  the  status  of
their employment, undertaking attempts  concern  to  find  work  within  the
previous four weeks and registered on labour exchange.
    Heavy for the countries of West were 30 years of our  century.  In  USA
the rate of unemployment has reached 25%. The diagram showing  the  dynamics
of a rate of unemployment in USA for 100  years  is  rather  curious  (1890-
    If the share of the unemployed makes 1-3 % in general army of work, not
it is accepted to count employment insignificant.  Especially  dangerous  in
social sense not employment (absence of work within 40 weeks  and  more)  is
long chronic.
    It is important to emphasise, that to the unemployed usually carry  not
only dismissed on the various  reasons,  but  also  persons  voluntary  left
works and undertaking attempt to find new.  The  structure  of  unemployment
for its reasons includes four basic categories of a labour:
    1) Lost work as a result of dismissal;
    2) Voluntary left work;
    3) Come on the market of work after a break;
    4) For the first time come on the market of work.
    The parity of these categories depends, first of all, on a phase  of  a
business cycle.
    The monthly average rate of unemployment within the given year pays off
under the formula:

                        UE*100 of %
                  Lue = ------------------

    Where Lue - level (norm) of  unemployment,  %;  UE  -  monthly  average
number of the unemployed; LFc - number of a civil labour.

    There are some concepts  treating  a  phenomenon  of  unemployment.  In
Marks of the theory it usually connect to process of  accumulation  of  the
capital, at which the requirement  for  alive  work  (variable  capital)  is
increased  slower,  than  in  machines,  equipment  (constant  capital).  In
western economic science the point of view  dominates,  according  to  which
the unemployment in the basis reflects an economic  feasibility  of  use  of
resources, just as, say degree of loading of capacities reflects  expediency
and efficiency of use of a  fixed  capital.  A  so-called  natural  rate  of
unemployment reflecting structural  disproportion  in  the  market  of  work
(between structure of a supply and demand of a labour on  qualification,  by
demographic and other criteria). To  natural  unemployment  carry  also  so-
called friction unemployment connected mainly  to  voluntary  transition  of
the workers from one work on another and to seasonal fluctuations in  demand
for a labour.
    In USA in the 60-th  years  as  a  natural  rate  of  unemployment  the
parameter in 4,3 %, in 70-th - already 6,6  %,  in  80-th  -  about  7%  was
considered. The excess of unemployment above a natural level  is  determined
in the basic cyclic factor, i.e. condition of a conjuncture in the country.
     Changes of unemployment is influenced,  besides  demographic  factors,
with changes in structure of economy, condition of foreign trade and  export
of the  capital,  scales  of  the  military  charges,  economic  and  social
politics of the state.
    Owing to variety of internal regulators of the market of a labour,  and
also by virtue of social importance of its effective functioning the  market
of work requires the qualified regulation.
    It is possible to allocate four basic directions of state regulation of
the market of work. First, it is the programs on stimulation  of  growth  of
employment and increase of number of workplaces in public sector,  secondly,
programs directed on preparation and retraining of a labour,  and,  thirdly,
program of assistance to hiring of a labour. Besides the government  accepts
the programs on social insurance of unemployment, i.e. allocates  means  for
the grants with the unemployed.
    Within the framework of this program in USA, for example, in after  war
period - hundred thousand workplaces in public sector (in sphere  of  public
services - education, health  services,  municipal  services,  and  also  in
construction of public buildings and structures and in remaking works)  were
created. With the help of these programs the rate  of  unemployment  at  the
end of the 70-th years was artificial is underestimated  on  0,8  percentage
    The more and more important meaning gets state  assistance  to  hiring.
So, service of giving jobs  in  USA  having  more  of  2500  local  agencies
(labour exchanges), is engaged in registration of the unemployed,  tries  to
find by it vacancies, will carry out testing the  applicants  for  work  for
definition of their qualification.
    The listed directions do not settle all measures of  influence  of  the
state on the market of work. Alongside with  them  there  is  a  complex  of
measures  of  indirect  regulation  of  a  labour:  tax,  money-credit   and
amortisation politics of government. Besides the considerable  influence  on
the market of work renders also  legislation  -  about  social  maintenance,
about the labour relations, about the equal civil rights etc.
    The  measures  of  indirect  regulation  of  the  market  of  a  labour
simultaneously are also measures economic  of  regulation  and  influence  a
conjuncture in the country.
    The special place in system of regulation of  the  market  of  work  is
occupied with labour exchange (service of employment, service to  assistance
to hiring), being one of the  important  structures  of  a  market  economic
mechanism. It  represents  special  establishment,  which  is  carrying  out
intermediary functions in the market of a labour. In  the  majority  of  the
countries of labour exchange are state and carry out the activity under  the
direction of the ministry of work or body, similar to it(him). At  the  same
time in the market of work alongside with state services of  employment  the
large number of private intermediate  firms  functions,  the  efficiency  of
which activity is very high.
    The basic directions of activity of labour exchanges are:
    1) Registration of the unemployed;
    2) Registration of vacant places;
    3) Giving jobs to the unemployed and other persons  wishing  to  get  a
    4) Study of a conjuncture of the market of work  and  granting  of  the
information about it(her);
    5) Testing the persons wishing to offer work;
    6)  Professional  orientation  and  professional  retraining   of   the
    7) Payment of the grants.
    The  majority  of  the  economists  believe,  that   the   problem   of
unemployment and other disproportion in the market of work can  be  softened
only with the help of a  combination  of  various  means  -  stimulation  of
economic growth, reduction of working week, creation of an effective  system
of retraining of the staff.
    Thus, the modern state regulation of the market of  work  represents  a
complex of economic, administrative, organisational and other measures.
    The existing  nowadays  system  of  state  regulation  of  economy  has
developed not at once. During the development it has passed some stages:
    1) Creation of general favourable conditions for  reproduction  of  the
private capital; a concentration of efforts of the state on  development  of
the  labour,  tax,  trade,  social   legislation,   customs   politics,   on
maintenance of stability of money. Construction and purchase of  objects  in
raw and infrastuctural branches.
    2) The unmatched among them actions of  an  anticrisis  and  structural
orientation, attempt to influence employment and prices.
    3) Experiments with use of money-credit and budget means of  regulation
of economy. A wave of a privatisation of objects of a state ownership.
    4) Transition in a number of  the  countries  to  branch  and  regional
intermediate term programming; attempts to increase effectiveness  of  state
regulation of economy by study of compatibility  and  interchangeability  of
tools of regulation, definition of their efficiency.
    5) Realisation in the increasing number of the  advanced  countries  of
nation-wide intermediate term programming in a  combination  to  development
long-term perspective ways. More and more address, dosing  and  complex  use
of tools of regulation.
    6) Measure as agreed of nation-wide intermediate term  programs  at  an
interstate level in  framework  integration  of  associations;  steps  in  a
direction national of planning.
    On scales, the tools and efficiency  of  state  regulation  of  economy
decisive influence rendered tasks rising  before  economy  of  the  separate
countries, material opportunities of the states  reflected  in  a  share  to
them of a total internal product and in the absolute sizes of  means,  which
it is ready to use on state regulation of  economy  accrued  experience  and
successes in scientific development of problems of state  economic  politics
in conditions of a market economy.
    The mechanism of state regulation of economy  is  constantly  improved,
irrespective of, the governments on  principles  of  economic  politics  are
guided or are inclined to use more rigid  budget  tools  of  regulation.  In
modern conditions the practice of state regulation of economy  has  appeared
rather productive to not admit  general crises and  social  -  dangerous  of
scales of unemployment.

                               The literature.

    1) Economy. The textbook  for  economic  academies,  high  schools  and
faculties. Under edition of  the  candidate  of  economic  sciences,  senior
lecturer of AMPERE-SECOND. Bulatova. Publishing house. Moscow 1995.
    2) Macroeconomic. The manual.  M.K.  Bunkina,V.A.  Semenov.  Publishing
house   Moscow 1995.
    3) Social market economy. The German way. Chaints  Lampert.  Publishing
house Business. Moscow 1994.
    4) Market economy. The textbook. Volume 1,  part  1.  Publishing  house
Somintek. Moscow 1992.

" "