Money supply- this is the totality of cash in circulation and balances of non-cash funds in accounts held by individuals, legal entities and the state.
Indicators money supply structure are monetary aggregates. Monetary aggregates are types of money and Money, differing from each other in degree (the ability to quickly convert into cash). Monetary aggregates are a hierarchical system - each subsequent aggregate includes the previous one.
IN different countries monetary aggregates are allocated different composition. (IMF) calculates a common M1 indicator for all countries and a broader “quasi-money” indicator (terms and savings bank accounts and the most liquid financial instruments traded on).
Monetary aggregates M0, M1, M2, M3
The Central Bank of the Russian Federation calculates monetary aggregates M0, M1, M2, M3:
Money supply M0
The monetary aggregate M0 is in circulation (coins, banknotes), in fact it is a direct debt to the population. From our example above, you hold 100 thousand rubles in your hands and the Central Bank takes them into account in M0.
Money supply M1
Money supply M1 = M0 + checks, demand deposits(including banking debit cards), balances of funds in settlement accounts of organizations, current and other demand accounts of the population, non-financial and financial (except credit) organizations that are residents Russian Federation. That is, M1 - M0 = direct debt of credit institutions (banks) to the population of the Russian Federation and non-credit organizations of the Russian Federation, denominated in rubles. From our example above, you keep 100 thousand rubles on a debit card and the Central Bank of the Russian Federation takes them into account in M1.
Money supply M2
Monetary supply M2 = M1 + time deposits, balances in national currency on accounts of time deposits and other funds of the population attracted for a period of time, non-financial and financial (except credit) organizations that are residents of the Russian Federation. That is, M2 - M1 = direct debt of credit institutions (banks) to the population of the Russian Federation and non-credit organizations of the Russian Federation, denominated in rubles, withdrawn from the circulation of one of the economic participants for a certain period. In other words, if you invested your 100 thousand rubles in a bank with a debit card for a deposit for 2 years, then your 100 thousand rubles will reduce the money supply M1 and increase M2 by 100 thousand rubles. The monetary aggregate M2 is the money supply in the national definition of Russia.
Money supply M3
Monetary supply M3 = M2 + savings deposits, certificates and government bonds. In other words, M3 is the debts of the Central Bank of the Russian Federation + debts of credit institutions + government debts in the form of loans with securities. M3 - M2 = “future” M2, that is, those that need to be earned in the future. If the government borrowed for its current operations under obligations to the population, then this is a direct emission of money and it leads to inflation (depreciation of money); this can also be called a “tax on the poor.” If the government borrowed for its current operations to invest in the creation of profitable economic facilities, for example, new power plants, roads, ports, etc., then the increase in the money supply will increase the book value of the economy and the increase in tangible assets, which will allow debt to be removed from circulation excess debt, in other words, they will pay off the debt with real assets.
Money supply M4
In a number of countries, they additionally allocate money supply M4. For example, in the UK, M4 includes the amount of currency in circulation, the total amount of loans issued by banks, and the amount of government borrowing.
Money supply and economic monetization
An important indicator of the state of the money supply is monetization coefficient(also known as financial depth), equal to ratio M2 k gross domestic product. This indicator allows you to answer the question of the sufficiency of money in circulation. The optimal level of economic monetization for is considered to be at least 55-60%, low level monetization of the economy may hinder foreign economic development.
Money supply is the state's supply of money.
The money supply serves the movement called money circulation.
The totality of all the money in a given country held by the government, firms, banks, citizens, in accounts, on the move, in wallets, in “stockings”, etc. forms national money supply. Money circulation as a totality is divided into cash and non-cash. Non-cash circulation is much higher than cash (Fig. 1):
Rice. 1. The ratio of cash and non-cash money supply inIn countries with an unreliable banking system, the ratio of cash and non-cash money supply looks different (Fig. 2):
The concept of liquidity is used not only in relation to, but also to, the international monetary system, etc. Liquidity in relation to money is its ability to be used by its owner for the immediate acquisition of necessary goods. Depending on the specific form in which money exists (cash and non-cash), the liquidity of money increases or, conversely, decreases. Thus, cash is much more liquid than non-cash money, and in the non-cash money supply, money in current accounts, which can be used through checks, transfers, credit cards, is much more liquid than money in time deposits, since the latter have a time limit during which the account owner does not can use the entire amount of the deposit, but only the interest on it.
Liquidity various forms money according to the degree of increasing liquidity:- Money in time and savings bank deposits;
- Money on demand deposits (current) checks, bills, payment orders, credit cards, electronic money, traveler's checks;
- Cash, banknotes, banknotes, treasury notes, loose change, securities;
System of money supply aggregates
Since 1992, the Russian Federation has switched to calculating monetary aggregates.
The money supply is divided by monetary aggregates(from to ), which includes different kinds money.
Monetary aggregates are a grouping of bank accounts according to the rate at which funds in these accounts are converted into cash. How faster means on accounts can be transferred to monetary form, the more liquid the aggregate is considered.
The system of money supply aggregates is "matryoshka", in which each previous unit is “inserted” into each subsequent one.
Money supply M0
To the unit M 0 includes all types of money that have high degree liquidity.
Different types of money and different types make it possible to introduce a certain classification of money depending on the degree of its liquidity and scope of application. This was expressed in the creation of a system of money supply aggregates used in the analysis national systems monetary circulation of various countries. The original unit includes cash and checks:
M 0 = C + checks,
Where WITH— initial money supply (cach).
Cash, in turn, consists of paper money, banknotes and small change.
1st sign. Cash is issued into circulation in the Russian Federation, then the Central Bank of the Russian Federation takes measures to preserve it purchasing power. Thus, cash is a debt obligation of the Central Bank of the Russian Federation, that is, the Central Bank of the Russian Federation guarantees its purchasing power.
2nd sign. Non-cash money listed on current accounts and other demand accounts and urgent accounts. These are debt obligations to their clients. At the same time, the Central Bank of the Russian Federation controls and regulates the activities of commercial banks, ensuring the liquidity of commercial banks, that is, the ability to pay debts.
3rd sign. Banknotes, coins, and non-cash money in circulation in the form of entries in accounts are legal means of payment. Therefore, they are accepted as payment for dogs according to their functions.
4th sign. Modern money (in the narrow sense of the word) is convenient and acceptable for people to use.
5th sign. M 1 has absolute liquidity, That's why M 1 banknotes that perform the functions of money.
Money supply M2
In addition to money, that is, the aggregate, the money supply includes purchasing and means of payment that do not have absolute liquidity. These include bills, bonds, and certificates of deposit. IN non-cash form: time deposits for bank accounts.
Unit M 2 complements to M 1 time deposits:
M 2 = M 1 + time deposits.
With a fixed-term deposit, the account owner transfers his funds to the bank for some time. If necessary, money can be withdrawn from the time deposit before the maturity date, but in this case the client may experience losses (interest on the deposit is not paid). This shows that the fixed deposit is almost money. In the conditions of the Russian Federation, the level of liquidity of the unit is close to absolute, so usually a fixed-term deposit is issued to the client upon request.
Funds on time deposits further reduce the liquidity of the unit M 2 compared with M 1 And M 0 and involve servicing savings, savings, and investments.
Money supply M3
Unit M 3 assumes an increase in the unit M 2 due to:
M 3 = M 2 + government securities.
These papers (mainly government bonds) are no longer fully-fledged money, but they can still be transformed into other types of money (sold on the open market) and for this reason they are included in the money supply (Fig. 3).
Money supply structure
The structure of the money supply is constantly changing.
In the modern monetary system, the growth rate of the money supply has noticeably decreased and money began to work better. In the Russian Federation, among the shortcomings of the monetary system, one can note a large share of cash (42-65%), when in developed countries oh, this figure barely reaches 7-10%.
Rice. 3 The structure of the money supply, represented by a system of aggregates (from to)
The ratio between aggregates changes depending on economic growth.
Changes in the volume of money supply are the result of the influence of two factors:
- change in the amount of money in circulation;
- change in the speed of their turnover.
Change in turnover rate
The velocity of money circulation is determined using indirect methods:
Speed of circulation of money in the circulation of income= GDP / Money supply (M1 and M2). This indicator reveals the relationship between economic growth and money circulation.
Cash turnover rate= Income according to the forecast of the balance of cash turnover / the average annual value of money supply in circulation.
Turnover of money in payment circulation(shows the speed of non-cash payments) = Amount of funds in settlement, current and forecast accounts (bank accounts) / average annual money supply in circulation.
The change in the speed of money turnover depends on:- general economic factors showing how production is progressing, how cyclicality is changing economic development, price increases, growth rates the most important industries economics;
- monetary factors: what is the structure of payment turnover (how much cash and non-cash money is involved), the development of credit operations, the development of mutual settlements, the level interest rate on loan;
- frequency of payments of money and income, level of savings and savings, uniformity of spending money.
The effect of inflation on the growth of the velocity of money is explained by the fact that buyers increase purchases in order to protect themselves from economic losses due to a decrease in the purchasing power of money.
Rules for regulating the structure of the money supply
Dividing the money supply by , , , is necessary if you need to ensure government regulation volume of money supply and prevent unexpected events (price rises).
When circulating money, it is not only the amount of absolutely liquid money that is important M1, but also that amount of money M2, which can quickly turn into M1. Also M3 may, under certain conditions, become a means of payment M1.
By distributing the money supply into aggregates, the Central Bank of the Russian Federation influences the money supply M1, increasing it or decreasing it (or restraining its growth).
Example. In case of high inflation, the Central Bank pursues a policy to reduce the money supply M1. For this purpose, the Central Bank sells state-owned valuable papers and large denominations of other firms and banks, i.e. M1 - M3 (the money supply M1 decreases).
For the population, the Central Bank of the Russian Federation sells securities of lower denominations and M1 - M2, the money supply M1 decreases.
Rule: if money goes into the banking system for a time deposit or into the budget, the money supply M1 decreases, money leaves the sphere of circulation M1.
If the Central Bank of the Russian Federation increased the interest rate at which banks are credited, commercial banks, in turn, raise the interest rate on time deposits.
It has become profitable for people (depositors) to make time deposits - M2 increases, and M1 decreases - inflation is contained.
For the duration of the deposit, the money went to the disposal of the banking system (- M2).
Monetization rate
An important indicator of the state of the money supply is monetization coefficient, equal
The monetization coefficient allows us to answer the question: is there enough money in circulation? It shows how much the gross product is backed by money (or how much money is per ruble of GDP).
The monetization coefficient reaches 0.6, and sometimes is close to one. In Russia this figure barely reaches 0.1.
Denial mass– is defined as the amount of cash in the hands of the population and in the cash registers of business entities, as well as deposits in bank accounts.
Quantitative determination of the monetary mass and its individual components is possible by constructing various indicators, applications. such displays as monetary aggregates.
The National Bank of the Republic of Belarus uses the following monetary aggregates to determine the monetary mass:
1. M0 – mass of cash in national currency.
2. M1=M0+ demand deposits in national. shaft.
3. M2=M1+ time deposits in national. currency.
4. M3=M2+ other deposits in national. currency.
5. M4=M3+ deposits in foreign currency.
Monetary aggregates M0, M1, M2 are the most highly liquid part of the money supply.
These are assets that are used in calculations without prior sale. Currently, M0, M1, M2 occupy the largest share in the structure of the money supply. The remaining monetary units are still in the development stage.
Monetary base– cash in circulation and bank deposits with the Central Bank.
There is a direct connection between the monetary base and the volume of the money supply. In a developed market economy, it is the mass of money that is regulated, and not its individual elements.
The mass of money in circulation is determined by the law of monetary circulation, open Marx.
According to this law, quantity of money required for circulation, definition the following formula :
D=R/S,
where D is the amount of money, P is the sum of prices, C is the turnover rate of monetary units.
With the development of credit relations and implementation money f-i s-va payment, the amount of money needed for circulation is determined by the following formula(as the sum of prices com-v subject sales P, - amount product prices food on credit K + payments for which payment is due P - the amount of mutually extinguishing payments to VP and all this is divided by the number of turnovers of the same monetary units C): D=(R-K+P-VP)/S
Exchange level ( Fisher equation), close to Marx’s equation, looks like this: MV=QP
The product of the value of the currency in circulation M by the average circulation velocity of the monetary unit V = the product of the price level P by the real volume of the national product Q.
This Fisher equation allows us to explain such a phenomenon as inflation in terms of violations in the field of paper and money circulation.
Fisher's formula shows the dependence of the price level on the money supply.
10. Concept and structure of monetary turnover. In the process of production and household activities of business entities, settlements and payments arise when delivering products, providing services, and communications. with the relationship between financial and credit. systems. Business entities and the population make payments to the budget, extra-budgetary funds, repayment of loans and interest on them. A scoop of all these money. receipts and payments form money. turnover
Den. turnover- the movement of money, which is mediated by money. relations between enterprises, institutions, enterprises and the state, between the population and the state, between individual citizens.
Den. turnover is possible classify depending on the characteristics:
1. depending on nature of payments: commodity and non-commodity;
2. depending on payment method: non-cash and cash.
Part of the money turnover can be considered as payment. turnover, in which money functions in the quality of money. payment.
Payment turnover incl. includes part of cash. and cash flow.
Scoop den. funds at the disposal of individuals and legal entities. persons called den. weight in circulation. Regulating money mass - basic task of the National Bank of the Republic of Belarus.
Methods for regulating money. turnover:
1. determination of the norms of required reserves;
2. determining the terms of the loans provided;
3. setting the interest rate on loans;
4. regulation of investment transactions from prices. securities and in the foreign exchange market.
Non-cash.den. turnover
non-cash.den. turnover– a bunch of payments, actual. without using cash money. It is closely related to cashless transactions. calculations.
Non-cash. calculations– den. settlements made by recording the payment and receipt accounts.
Non-cash. den. turnover prevails in all countries of the world and is served next. tools: plat. order, payment demand-order, checks, letters of credit, plastic. cards.
Non-cash. calculations are carried out in m/d:
state and economic entities,
state and population,
state and commercial banks,
banks and business entities,
center. and commercial banks.
M/d cash-den. and non-cash. there is a close relationship, i.e. money moves from cash to non-cash.
12.Equivalent content of cash turnover
In countries with developed markets. economy under in cash we mean the amount of money available to payers. No distinction is made as to what form this money is in. In the Republic of Belarus, due to the special social-ec. development preserved demarcation m/d cash. and non-cash. money.
The term “cash” is deciphered as cash balances. signs that have legal force in the hands of the population, at the cash desks of banks and at the cash desks of business entities.
Cash– banknotes, coins issued by the center. emission center, find. at bank cash desks and by contacting outside the bank. spheres.
Cash turnover– part of the total. den. turnover, which is carried out with the help of cash. It is smaller in volume than non-cash turnover. However, its proper organization is very important in social economics. plan, because this turnover is served by relations, communications. with the sphere of personal consumption.
The circulation of cash is an area of the economy that is in contact with all its other aspects. Sphere of money treatment is sensitive to what is happening. change in den. income of the population, on the possibility of turning money into real material goods, on the distribution of money. income m/d social groups of the population.
Cash turnover is based on principles :
1. Enterprises of all forms of ownership are required to keep their money in bank accounts.
2. The enterprise receives cash for salary payments and other payments from the bank’s cash desks.
3. banks set a monetary limit annually. cash in the cash registers of the enterprise and all receipts. The economic body must transfer the proceeds to the bank account. The economic body must also hand over the amount in excess of the established amount to the bank.
Payment s-ma, her email. Types of payment.sm.
Payment. s-ma- this is a set of mechanisms, rules, norms and tools used to carry out the exchange of finances. values between the parties in the process of fulfilling all their obligations.
Within the framework of the definition The state operates separately. payment.s-ma, cat.name national with its inherent features: legislative base, business practice, communications, infrastructure.
Board development level. s-we resp. level of development of the state.
An effectively working board contributes to the development of the state, because it reduces settlement terms to a minimum, reduces costs and possible risks.
E-mail us:
participants (commercial banks, National Bank, non-financial institutions)
communication medium communication within s-we ( s-ma BISS, clearing s-ma)
monetary and other instruments (pl/orders, pl/demand, plastic cards, letters of credit)
legislator base
negotiable relations
To board s-mom presented trace. requirements:
1. payment speed
2. payment terms
3. reliability and security of payments
4. convenience and versatility. use
5. reasonable cost.
Non-cash calculations, methods of their organization.
Non-cash payments– these are monetary settlements made. by recording the accounts of payers and recipients of funds (beneficiaries).
The state has constantly expanded the scope of non-cash payments. By way of non-cash calculation, payments are made by companies and organizations, by companies and their higher authorities, by companies and financial credits.
Nowadays, the cash base has been reduced.
Advantages of non-cash payments :
· reduce consumption in cash
· reducing distribution costs
· acceleration of turnover
Principles of organizing non-cash payments:
· it is obligatory to store the money of business entities in bank accounts, with the exception of the cash of the day, the expenses of which are allowed in accordance with the bank's regulations.
· payments from accounts must be made by banks at the order of their owners in accordance with the established order of priority of payments and within the limits of the balance on the account.
· freedom of choice by business entities of forms of non-cash payment.
· urgency of payment, i.e. carrying out settlements in accordance with the terms established by the contract.
Forms of non-cash calculations, their classifications.
The form of non-cash settlements is determined by the type of settlement. documents, joint venture payment and document management.
In accordance with the current law, business entities in a non-cash order can pay by themselves with the payment order, payment order, request, checks, payment order, payment card , letters of credit.
In non-cash monetary turnover, various forms of calculation are used:
Credit transfer– this is a bank transfer at the initiative of the payer on the basis of pl/order or pl/required/order;
Debit transfer– this is a bank transfer at the initiative of the beneficiary on the basis of a request or a check. Bank plastic card– this is a payment system for settlements using modern technical systems.
Letter of Credit– this is an agreement between the payer and the payer’s bank, acc. The bank will pay for the supplier's documents, confirming the shipment of the product, according to the terms of the letter of credit.
Money supply is the amount of money in circulation at a certain point in time. Money refers to all funds that can be used as a means of payment, as well as certain highly liquid financial assets that can be converted into a means of payment or cash. The money supply is one of the most important macroeconomic indicators. Today there are several methods for calculating the money supply. However, there is an opinion about the need to improve the indicator that determines the amount of money in the country’s economy. However, there are international standards and practices for calculating the above indicator.
The money supply in Russian statistical practice is calculated according to the standard of the International Monetary Fund (IMF) and the methodology of the Central Bank of the Russian Federation. (Appendix No. 1). The content of the diagram of this application suggests that both methods of calculating the money supply are based on the principle of grouping financial assets according to the degree of liquidity into monetary aggregates. The entire money supply represents a total monetary aggregate, which includes its constituent parts in the form of separate aggregates. When constructing these units, each subsequent value increases by the previous one. However, when moving from the MO aggregate to subsequent aggregates, the liquidity of the financial assets included in them decreases. The monetary aggregate is a measure of the volume of liquid monetary assets that are used in the form of money.
The data in Appendix No. 1 indicate that the grouping of financial assets in aggregates of the same name according to the Russian and IMF methods differs. In addition, the sources of information for their calculations are also different.
There needs to be balance between monetary aggregates. In its absence, a violation of monetary circulation occurs. Practice shows that equilibrium occurs when M2>M1 and strengthens when M2+M3>M1. In this case, money capital moves from cash circulation to non-cash circulation. If this relationship between aggregates in monetary circulation is violated, a shortage of banknotes begins, prices rise, etc.
In the banking system of developed countries, a different number of money supply indicators are distinguished:
Germany, Switzerland – three;
USA, Italy – four;
England - five;
France – ten
In Russia, four units are used to determine the money supply: M0, M1, M2, M3. However The M2 aggregate was adopted as a universal indicator of the money supply. It includes all components indicated in table 3.1 in column 2 in national currency and does not include deposits in foreign currency.
The money supply in the Russian Federation is calculated by the Central Bank of the Russian Federation on the first day of each month based on data from the consolidated balance sheet of the banking system.
The amount of cash in a particular region (Mreg) can be determined as follows:
Mreg = M (receipt) – M (expense) + M (immigration) + M (emigration),
where M (receipt) is the issue of cash in circulation by the territorial institutions of the Central Bank of the Russian Federation;
M (expense) – withdrawal of cash from circulation by territorial institutions of the Central Bank of the Russian Federation;
M (immigration) – import of cash into the region;
M (emigration) – removal of cash from the region.
The development of market relations in Russia provides greater opportunities for entry into the world economy and allows for an increase in financial transactions abroad. All of the above requires the calculation of macroeconomic indicators, including monetary circulation, according to the methodology adopted by international organizations and in particular the IMF.
Since 1996, in accordance with the methodology used by international financial statistics and meeting the requirements of the IMF, the following aggregates have been calculated to characterize the money supply: money, quasi-money and broad money.
Unit "money" corresponds to the M1 aggregate according to the IMF calculation methodology and includes cash and demand deposits, i.e. all those funds that can be used as a means of payment. This unit is also called “narrow money”.
Unit "quasi-money" less liquid than the “money” aggregate, since it consists of time and savings deposits and deposits in foreign currency, which are not directly legal tender, but can be used to pay off obligations.
"Broad money" unit includes the units “money” and “quasi-money”.
This calculation methodology makes it possible to determine the actual ability of a country to meet its obligations.
The money supply (M2) is constantly increasing. (Appendix No. 2). At the beginning of 2006, compared to the beginning of 2001, the money supply (M2) increased to 6045.6 billion rubles, or 5.2 times.
In addition to the money supply indicator (M2 aggregate), it is also calculated an indicator of the expanded money supply. It includes the M2 aggregate and foreign currency deposits.
The movement of money is carried out in cash and non-cash forms.
There is a close relationship and close interdependence between cash and non-cash circulation: money constantly moves from one sphere of circulation to another, cash changes form and turns into non-cash money to the accounts of enterprises and organizations in a credit institution and back. Receipts of non-cash funds into bank accounts are an indispensable condition for the issuance of cash; therefore, non-cash circulation is inseparable from the circulation of cash and together with it forms a single money circulation of the country, in which a single money of the same name circulates.
Cash are used for the circulation of goods and services, for settlements not related to the movement of goods and services. These are calculations for the payment of benefits and pensions; insurance compensation, payment for securities and income on them, payment various services population, etc.
Cash turnover includes the movement of the entire cash supply over a certain period of time between the population and legal entities, between individuals, between legal entities, between the population and government agencies, between legal entities and government agencies.
Cash circulation is carried out using various types of money: banknotes, metal coins, other credit instruments, paper money (treasury notes). The issue (issue) of cash is carried out by central bank Russia. He issues cash into circulation and withdraws it if it has become unusable, and also replaces the money with new types of bills and coins.
Banknotes and coins are unconditional obligations of the Bank of Russia and are backed by all its assets.
Banknotes (bank notes) and coins of the Bank of Russia are the only legal means of payment on the territory of the Russian Federation.
For cash services of credit institutions and other legal entities, cash settlement centers (CSCs) have been created at the main territorial departments of the Central Bank of the Russian Federation. They form a working cash register for receiving and issuing cash, and control the formation of cash reserve funds.
The reserve fund of banknotes is not taken into account when calculating monetary aggregates. For normal customer service, each bank sets a limit on the balance of cash in the cash desk at the end of the working day. The client withdraws money from the cash register mainly by attracting resources in cash. If there is insufficient cash in commercial bank RCC supplements the operating cash desks with cash from the reserve fund. Great importance for stable monetary circulation have development of cash turnover forecasts and analysis of statistical reports. The discrepancy between forecast and actual cash turnover in individual regions requires measures to be taken by both the Central Bank of the Russian Federation, commercial banks, and regional administrations.
Non-cash form of circulation– this is the movement of value without the participation of cash: transfer of funds to the accounts of credit institutions, offset of mutual claims.
Non-cash transactions are carried out using checks, bills, credit cards and other credit instruments.
Non-cash money turnover covers settlements between:
enterprises, institutions, organizations of various forms of ownership that have accounts in credit institutions;
legal entities and credit institutions for obtaining and repaying loans;
legal entities and the population for the payment of wages, income from securities;
individuals and legal entities - with the state regarding the payment of taxes, fees and other obligatory payments, as well as the receipt of budget funds.
The volume of non-cash turnover largely depends on the volume of production, the price level, the level of payments, as well as the size of distribution and redistribution relations carried out through the financial system. Non-cash circulation plays an important economic role in accelerating the turnover of working capital, reducing the need for cash, and reducing distribution costs.
In the Russian Federation, the form of non-cash payments is determined by the rules of the Bank of Russia, operating in accordance with the law. It has been determined that payments by enterprises of all forms of ownership for their obligations with other enterprises, as well as between legal entities and individuals for inventory items, are made, as a rule, in non-cash form through bank institutions.
As follows from Appendix No. 3, the share of cash in circulation in the money supply (M2) from 2001 to 2006 decreased from 36.3% to 33.2%.
Currently, the share of cash in the money supply of economically developed countries is small and, for example, in the USA it is about 8% - 10%.
One of the indicators characterizing the state of money circulation is monetization level economy.(Km). It characterizes the supply of money per 1 ruble of gross domestic product (GDP). Its calculation is carried out using the following formula:
Km = ------------ = … %
Data from Appendix No. 4 indicate that the level of monetarization in 2001 was 12.9%, then it gradually increased and in 2005 it amounted to 20.2%.
For developed countries with market economies, this figure was at the level of 60% - 80%, i.e. In Russia the level of monetarization is low.
Correspondence of the number of banknotes to the volume of circulation and factors of money depreciation are determined using the following indicators:
1. Quantity monetary units required during this period for circulation;
2. An indicator characterizing how many times the product of the quantity of money and the velocity of circulation of the money supply is greater than the product of the price level and the commodity supply;
3. Inflation indicator;
4. Banknote structure of the money supply.
There is a stable connection between the needs of economic turnover for money and its quantity in circulation, the violation of which leads to the depreciation of the national currency, imbalances in the development of the economy and disruption of the entire system of existing relations.
The size of the money supply necessary to service economic turnover depends on a number of factors, the cause-and-effect relationship between which was established by K. Marx, who formulated the law of monetary circulation: the amount of money needed for circulation changes in direct proportion to the sum of prices of goods, including sold on credit, as well as due payments for deductions of mutually extinguishable obligations, and inversely proportional to the speed of circulation of money. This law of money circulation can be represented by the following formula:
M – the amount of money needed for circulation, or the nominal money supply;
C – the sum of prices of goods and services sold;
B – the sum of prices of goods sold on credit;
P – due payments;
VP – mutually extinguishable obligations;
N is the turnover rate of the monetary unit of the same name (money circulation speed).
In simplified form, this formula will take the form:
,
where q is the mass of goods sold; p – average price of goods.
From the above formula we obtain the exchange equation
Consequently, the product of the quantity of money in circulation and the velocity of circulation is equal to the product of the commodity mass and the price level. When equality is violated, money depreciates.
The depreciation of money, manifested in the form of rising prices for goods and services (inflation), occurs due to the overflow of monetary circulation channels with excess money supply in the absence of an adequate increase in the commodity supply.
There is a depreciation of both paper money and non-cash funds. This may be due to disruptions in the functioning of the monetary system, structural imbalances, violations of the price ratio for individual products and services, and other reasons.
Statistics measure the rate of inflation using a system of price indexes. The most important components of which are:
gross domestic product (GDP) deflator;
consumer price index (CPI).
Important indicators characterizing money circulation include the purchasing power of the ruble. It can be determined by the formula:
Inc =
,
where IP prices is the consumer price index.
Main purpose consumer price index is an assessment of the dynamics of prices for consumer goods and services purchased, used or paid for by the population for non-productive consumption. To calculate it a sampling method is used.
The CPI (consumer price index) for Russia includes:
consolidated CPI. It characterizes the change in the cost of a fixed set of consumer goods and services purchased on average per family.
CPI for selected socio-economic groups of the population with different incomes.
Group price indices can be calculated for each socio-economic group.
The basis for calculating the CPI are individual indices of various prices for goods and tariffs for services, which are calculated based on weekly and monthly price registration. The CPI is calculated: to the previous period; by December of the previous year or quarter; to the corresponding month (period) of the previous year.
In the conditions of economic development in Russia, the ruble purchasing power index shows how many times money has depreciated, i.e. characterizes inflation. It can be calculated in relation to the monetary unit of the current and base periods. If the price index for the analyzed period increases, then the purchasing power index of the ruble will decrease, and vice versa.
The inflation rate (r) is determined by the following formula:
r = Ip –1.0 (100%)
Deflator indices– these are price indices that are used to recalculate cost indicators in current (current) prices into constant (basic) prices, i.e. prices of the period taken as the base. Using these indices, the dynamics of the most important macroeconomic indicators is determined. Among them are the volumes of capital investment, lending, consumption fund, personal income, gross domestic product, assets of the banking system and others.
The GDP deflator index is used to convert components of GDP into constant (comparable or reference) prices. Its value compared to the previous year in 2004-2006 was at the level of 1.2.
There are several methods for such recalculation. These include:
Method of direct product assessment, i.e. individual species products of the reporting year are recalculated into constant (basic) prices
Method of deflation by price indexes. For this purpose, the value of GDP in current (current) prices and individual price indices are used.
Extrapolation method– recalculation of GDP components is carried out into constant prices using physical volume indices. Revaluation is carried out using the cost volumes of the base period and physical volume indices for those types of work, services, products, the volumes of which in comparable prices are determined by changes in the physical volume of sales or production
The term deflation also means the government's withdrawal of excess funds from circulation in order to reduce inflation.
In relation to monetary circulation for the year, the formula for the equation of exchange can be presented in the following form:
Money turnover (MN) = gross domestic product (GDP)
From this equality the indicator of the velocity of circulation of the money supply is derived: 
Analysis of the dynamics of macroeconomic indicators of money circulation is carried out using the index method. Guided by the rule according to which the relationship between the indices of volumetric and indices of quality indicators is similar to the relationship of these indicators, let us consider the exchange formula in dynamics:
- nominal money supply index
- money supply velocity index
- GDP physical volume index
- GDP deflator index
- GDP index in current prices
Factor analysis of the dynamics of the money supply can be carried out using the following formulas:
absolute change in the money supply due to changes in:
a) GDP: Δ M (GDP) = (GDP 1 -GDP 0): N 0
b) GDP deflator: ΔM (p) = GDP (I P -1):N 0
c) physical volume of GDP: ΔМ (q) = Δ М (GDP) - ΔМ (р)
d) velocity of circulation of the money supply: M (N) = (I N – 1.0) M 1
Example 1
The following country data is available:
Determine the absolute change in the money supply due to changes in prices, the physical volume of GDP and the velocity of circulation of the money supply.
Solution
Change in money supply due to:
a) GDP growth: Δ M (GDP) = (9100-7103): 7.5 = 266 billion rubles.
b) price growth (GDP deflator): ΔM (p) = (1.3-1.0) x 7103: 7.5 = 284 billion rubles.
c) change in the physical volume of GDP: ΔM (q) = 266-284 = -18 billion rubles.
d) decrease in the velocity of circulation of the money supply: M (N) = (0.986-1.0)x1230 = -17 billion rubles.
Growth of the money supply by 283 billion rubles. or 29.9% occurred due to an increase in prices by 284 billion rubles. and a decrease in the velocity of circulation of the money supply - by 17 billion rubles. The decrease in the physical volume of GDP reduced the money supply by 17 billion rubles.
ΔM = M 1 -M 0 = ΔM (p) + Δ M (q) - ΔM (N)
283=284-18-(-17)=283 billion rubles. or
ΔМ= ΔМ (GDP) - ΔМ (N) =266 - (-17) =283 billion rubles.
The growth of GDP in current prices by 28.2%, with a simultaneous decrease in the velocity of circulation of the money supply by 1.4%, increased the money supply in the reporting period by 266 and 17 billion rubles, respectively.
Studying is important banknote structure of the money supply – this is the structure of the money supply by denomination (face value) banknote(coins). It is necessary for the formation of reserve funds (replacement, issue) of cash, convenience of payments for the population for goods and services.
The banknote structure is determined on the basis of taking into account the banknote structure of cash received by the institutions of the Central Bank of the Russian Federation.
The structure of individual coins and individual bills is determined by both their number and their amount of coins or banknotes, respectively.
To determine the structure of coins or banknotes by their quantity, an indicator of the structure of the population is used:
Where
d f – specific gravity of the number of coins (bills)
f i – number of individual coins or bills of different denominations
To determine the structure of the amount of coins or bills, the following formula is used:
, Where
- denomination of coins or banknotes of different denominations
- the specific weight of the amount of coins (bills) of different denominations in the total amount of coins (banknotes).
The structure of the cash money supply in circulation is studied in the following areas:
The share of coins and banknotes in the cash supply
Specific gravity in total quantity:
a) coins of different denominations
b) bills of different denominations
Share in the total amount of coins (bills):
a) the sums of individual coins of different denominations
b) the amounts of individual bills of different denominations
After denomination, from January 1, 1998, coins in denominations of 1,5,10 and 50 kopecks, as well as 1,2,5 and 10 rubles, are in circulation. and banknotes in denominations of 5,10,50,100,500 and 1000 rubles
Example 2
There is data on cash in 1997 for the regional banking system at the end of the year.
|
Types of cash |
Base year |
Reporting year |
|
|
Banknotes – total | |||
|
Including banknotes in denominations: | |||
|
100 rubles | |||
|
500 rubles | |||
|
1000 rubles |
Define species structure in circulation and the denomination structure of the money supply in circulation. Calculate the integral coefficient of structural differences (A. Szalai).
Solution
We determine the share of coins in cash circulation:
We determine the share of the nominal value of banknotes in cash circulation:
With the same nominal value of cash in coins, their share in the reporting year decreased from 0.5% to 0.45%. The bulk of cash circulates in banknotes. In the reporting year, their share in cash was 99.55%, and their volume was 5,475 million rubles.
To determine the banknote structure, we will determine the specific gravity of banknotes of different denominations in cash that circulates in banknotes.
Table No. 1
Breakdown of the Ministry of Defense unit by region at the end of the year
|
Cash in banknotes |
Share of individual banknotes in the total amount, % |
|
||||
|
basis (d 0) |
Report (d 1) |
|||||
|
including banknotes in denominations: | ||||||
|
100 rubles | ||||||
|
500 rubles | ||||||
|
1000 rubles | ||||||
Let us determine the integral coefficient of structural differences K c using the formula:
When K c =1.0 – maximum differences occur in the compared structures; and at K c =0, a complete coincidence of the compared structures is observed. In our example, the coefficient indicates a significant change in the banknote structure of the money supply.
In monetary circulation statistics they calculate average banknote indicator
, on the basis of which the dynamics and trends in changes in the banknote structure of money are studied. It is calculated by the formula:
, Where
M – denomination of banknotes; f – number of bills.
Example 3.
Based on the data in Example 3, determine the average banknotes for the base and reporting years.
Solution
In the absence of data on the presence of banknotes, the weighted arithmetic average can be replaced by the weighted harmonic average:
, Where 
a) average denomination according to the basis:
rubles, where 58900 – thousand. banknotes of various denominations
rubles, where 34621 – thousand. banknotes of various denominations
The average denomination of cash in circulation increased from 85 to 158 rubles, or by 86%. This can be explained by an increase in household incomes and inflation.
Regulating the amount of money in circulation and the price level is one of the main methods of influencing the economy.
The connection between the quantity of money and the price level was formulated by representatives of the quantity theory of money.
In a free market () it is necessary to regulate economic processes to a certain extent (Keynesian model). Regulation of economic processes is carried out, as a rule, either by the state or by specialized bodies. As the practice of the 20th century has shown, many other important economic parameters, primarily the price level and interest rate (loan price), depend on the value used in the economy. The relationship between the price level and the amount of money in circulation was clearly formulated within the framework of the quantity theory of money.
Fisher equation
Prices and the amount of money are directly related.
Depending on various conditions, prices may change due to changes in the money supply, but the money supply can also change depending on changes in prices.
The exchange equation looks like this:
Fischer formula
Undoubtedly this formula is purely theoretical and unsuitable for practical calculations. Fisher's equation does not contain any the only solution; Within this model, multivariance is possible. However, within certain tolerances, one thing is certain: The price level depends on the amount of money in circulation. Usually two tolerances are made:
- the speed of money turnover is a constant value;
- All production capacities on the farm are fully utilized.
The point of these assumptions is to eliminate the influence of these quantities on the equality of the right and left sides of the Fisher equation. But even if these two assumptions are met, it cannot be unconditionally stated that the growth of the money supply is primary, and the rise in prices is secondary. The dependence here is mutual.
In conditions of stable economic development The money supply acts as a regulator of the price level. But with structural imbalances in the economy, a primary change in prices is possible, and only then a change in the money supply (Fig. 17).
Normal economic development:
Disproportion of economic development:
Fisher's formula (equation of exchange) determines the mass of money used only as a medium of exchange, and since money also performs other functions, determining the total need for money involves a significant improvement in the original equation.
Amount of money in circulation
The amount of money in circulation and total amount commodity prices are related as follows:The above formula was proposed by representatives quantity theory money. The main conclusion of this theory is that each country or group of countries (Europe, for example) should have a certain amount of money corresponding to the volume of its production, trade and income. Only in this case will it be ensured price stability. In case of inequality in the quantity of money and the volume of prices, changes in the price level occur:
Thus, price stability— the main condition for determining the optimal amount of money in circulation.
