The connection between money and production has been noticed for a long time. Money is an important element of any economic system contributing to the functioning of the economy. Depending primarily on the assessment of the role of money and monetary system in the development of the economy there are various theories of money. These theories emerge, are confirmed, and dominate for a time. However, some of them, on the contrary, do not receive distribution, since practice does not confirm, or even simply refutes them.

There are three main theories of money - metallic (commodity), nominalistic and quantitative. These three theories are also called bourgeois theories of money, since they express the views of bourgeois economists on the essence of money, its functions and the laws of money circulation, and embody the main demands of the capitalists for monetary and monetary policy. These theories of money have been modified with the development of capitalism.

41. Commodity (metal) theory of money

This theory arose in England during the period of primitive capital accumulation in the 17th-17th centuries. One of the founders of the metalistic theory was W. Stafford (1554-1612). The metalistic theory of money was characterized by the identification of the wealth of society with precious metals, which were attributed to the monopoly performance of all the functions of money. Supporters of this theory did not see the need and regularity of replacing full-fledged paper money, and later they opposed paper money that was not exchangeable for metal.

The metalistic theory of money was developed in the era of the primitive accumulation of capital, playing a certain progressive role in the fight against damage to the coin (decrease in the weight of the metal). It was developed in its most complete form by the mercantilists (T. Man, D. Hops and others in England; J. F. Melon, A. Montchretien in France), who put forward the doctrine of full-fledged metallic money as the wealth of the nation. A stable metal currency, in their opinion, was one of the necessary conditions for the economic development of bourgeois society. The mistake of the supporters of the metalistic theory was to identify money with goods, misunderstanding the difference between money circulation and commodity exchange, misunderstanding that money is a special commodity that serves as a universal equivalent. Representatives of the metalistic theory denied the possibility of replacing full-fledged metal money with their signs in internal circulation.

With the development of capitalist production, new problems arose before bourgeois economists: the need arose for development for the internal circulation of credit money. The theory of money as wealth is disappearing from the scene. Critics of mercantilism denied the commodity nature of money and developed a nominalist theory of money.

42. Classical quantity theory of money.

The theory that prices (and hence the value of money) change, other things being equal, with the amount of money in circulation. Expressed mathematically, a purely quantitative approach is as follows

where P is the general price level, M is the amount of money, T is the total volume of commodity transactions.

Quantity theory is primarily a theory of the demand for money. It is not a theory of production, or money income, or the price level. Any provision concerning these variables requires the combination of quantity theory with special conditions imposed on the money supply and other variables.

For economic units, the primary owners of wealth, money is one of the forms of wealth possession. For manufacturing enterprises (firms), money is a capital good, a source of production services, which, combined with other goods, create products sold by firms. Thus, the theory of demand for money is one of the branches of the theory of capital and, as such, acquires, perhaps, features that are not inherent in itself when it is combined: with the price of each individual form of capital; with the offer of capital; with the demand for capital.

The founder of the quantity theory of money was the French economist J. Bodin. This theory was further developed in the writings of the Englishmen D. Hume and J. Mill, as well as the Frenchman C. Montesquieu. D. Hume, trying to establish a causal and proportional relationship between the influx of precious metals from America and the rise in prices in the 16th-17th centuries, put forward the thesis: "The value of money is determined by their quantity." Proponents of this theory saw money only as a medium of exchange. The quantity theory of money establishes a direct relationship between the growth of the money supply in circulation and the growth of commodity prices.

The foundations of the modern quantity theory of money were laid by the American economist and mathematician Irving Fisher (1867-1947). I. Fischer denied labor value and proceeded from the "purchasing power of money". He singled out six factors on which this "purchasing power of money" depends: the amount of cash in circulation, the velocity of circulation of money, the weighted average price level, the quantity of goods, the amount of bank deposits, the speed of deposit and check circulation.

The modern quantity theory of money, studying macroeconomic models and the general relationship between the mass of goods and the price level, argues that the change in the price level is based mainly on the dynamics of the nominal money supply. She puts forward appropriate practical recommendations for stabilizing the economy through control over the money supply.

K. Marx gave a devastating critique of the quantity theory of money. He showed that adherents of this theory do not understand that precious metals, like other commodities, have an intrinsic value. K. Marx emphasized that the representatives of the quantity theory did not understand the functions of money as a measure of value and a means of accumulation.

A variation of the quantity theory of money is monetarism. 43. Monetary policy of Ukraine in the light of monetary theories

The main features of the technique of monetary regulation, which is carried out in accordance with the neo-Keynesian recommendations, are the change in the official discount rate of the National Bank; tightening or loosening direct restrictions on the volume of bank loans, depending on the size of aggregate demand and employment, the level of the exchange rate, and the scale of inflation; the use of operations with government bonds mainly to stabilize their rates and lower the price of government credit. The fundamental difference between the monetary control technique based on the monetarist approach is the introduction of quantitative regulatory targets, the change of which changes the direction of monetary policy. This or that indicator as a benchmark of monetary policy largely determines both the main objects and the very technique of monetary control. Such indicators can be both the total money supply and its individual aggregates. Monetary policy allows the accumulation of free funds of the state, enterprises, population and use the most rational and efficient. This is primarily predetermined by the fact that the products of enterprises cannot compete with similar imported goods. There are two main reasons: 1) outdated production technology, as well as high additional costs associated with storage, transportation, and the sales process, make domestic products much more expensive than imported ones; 2) low level life of citizens of Ukraine, a persistent downward trend in per capita income leads to a drop in purchasing power. Basically, the population buys low-quality, but cheap imported goods, while domestic products have no market. Therefore, the main task of the state's monetary policy is to create conditions for a domestic producer to break through to the national and international commodity markets. Such conditions in the situation that has developed in the economy can be:

Determination of priorities in the structural restructuring of the economy;

Preferential lending to priority areas and enterprises. Establishment of state control over the obligatory provision of loans by commercial banks to enterprises determined by the state on preferential terms;

Creation of a more flexible taxation system, which would allow to stimulate the use of part of the profit for the development of production;

Creation of an appropriate legislative framework, which makes it possible to simultaneously realize the interests of the entrepreneur and the state as a whole.

When money performs its functions and maintains price stability, it is important that the volume of effective demand corresponds to the supply of goods. Compliance with this rule is due to the desire to prevent a delay in the sale of goods and services due to insufficient means of circulation. Therefore, an important task is to supply the economy with the necessary money supply and determine how much money should be in circulation.

The modern theory of demand for money is represented by various concepts. Consider the quantity theory of money. This theory appeared as early as the 16th century, when the flow of gold from America to Europe more than doubled and silver more than tripled. As a result, prices in Spain increased 4.5 times, in England - 4 times, in France - 2.5 times, in Italy and Germany - 2 times. Since that time, the dependence of prices on the amount of money in circulation has been the subject of close attention of economic science. The quantitative theory became widespread at the beginning of the 20th century, when the problems of circulation and the purchasing power of paper money became more acute.

The quantity theory of money links the money and commodity markets, establishing a direct link between the growth of the money supply in circulation and the growth of commodity prices. All fluctuations in the level of economic activity are accompanied by changes in the money supply. The most famous are two variants of the quantitative theory of money: the transactional approach, or the theory of I. Fisher, and the Cambridge version, or the theory of cash balances.

The theory of money by the American economist Irving Fisher (1867-1947) proceeds from the fact that since money performs the function of a medium of exchange, the amount of money required for circulation in the economy is determined by the mass and price of goods sold. The theory is based on the macroeconomic equation of exchange:

where M is the amount of money in circulation; V - the speed of circulation of the monetary unit; P is the weighted average price level; Q is the quantity of all goods and services.

The right side of the equation (commodity) shows the volume of goods sold on the market. The left side of the equation (monetary) shows the amount of money paid when buying goods.

It is assumed that V and Q are constant, since they are determined by long-term factors. If the amount of money in circulation increases as a result of emission, then the unavoidable consequence will be an imbalance. In such a situation, equilibrium can only be restored by rising prices. It follows from the equation of exchange that the level of yen is directly proportional to the amount of money in circulation and the speed of their turnover, and inversely proportional to the number of commodity transactions:

The Cambridge version of the quantity theory of money was developed by a number of economists. For example, the equation of A. Pigou (1877-1959) is as follows:

where M is the amount of money; K - the share of annual income that business entities wish to have in cash (cash balances); P - price level; T is the physical volume of production.

In this equation, as in the previous one, K and T are assumed to be constant in the short run.

The ideas of the Cambridge economists were developed by J.M. Keynes, putting them at the basis of his theory of liquidity preference, in which there are three motives for holding money in the form of cash on hand (demand for money):

1) transactional motive - the need for e ngah for current transactions;

2) precautionary motive - the need for e ngah in case of unforeseen circumstances;

3) speculative motive - the desire to store wealth in the most liquid form.

Based on this, Keynes argued that the total demand for money for current transactions and for contingencies (L') is determined by the level of income (Y), the demand for money for speculative purposes (L'') is inversely proportional to the rate of interest (r). Thus, the money demand function (M) according to Keynes's theory has the following form:

M=L'(Y) + L''(r)

Subsequently, Keynes not only criticized the quantity theory of money and completely denied its main postulates, but also developed a fundamentally new approach, expressed in the creation monetary theory of production.

His focus is no longer the problem of allocating scarce resources and the related problem of prices, but the question of the factors that determine the volume of production and employment. The starting point of the analysis was "aggregate demand", which should be stimulated through government intervention through budgetary (fiscal) and monetary policy. At the same time, priority is given to fiscal policy as the most effective means that directly affects the magnitude of aggregate demand. A stimulating fiscal policy involves an increase in government spending and a reduction in taxes, and allows the use of monetary emission to cover the resulting budget deficit. A small rate of inflation was seen as a stimulating factor. Monetary policy was assigned a secondary role, and as one of its main instruments, a change (reduction) in the interest rate was put forward in order to stimulate the growth of investment. In contrast to the classical quantity theory of money, Keynesian theory of the demand for money played the main role in the rate of interest.

Modern monetarism

Since the mid-50s of the 20th century, there has been a revival of interest in the quantity theory of money thanks to the work of M. Friedman and his followers, representing Chicago School of Economics, which was named monetarism. Modern monetarism is an alternative to the Keynesian approach and is a complicated version of the classical monetary theory. Proponents of monetarism argue that the demand for money is not only a function of the rate of interest and income, it is also affected by the rate of return on all kinds of real and financial assets. Unlike the Keynesian theory, money is considered as a substitute not only for financial, but also for all other types of assets.

Monetarists see in money and monetary policy the most important factor in economic development and give preference to monetary policy in comparison with the budget. Their main rule (money supply rule) is that the money supply must grow at a constant rate, approximately equal to the rate of increase in output. They believe that in order to stimulate production, it is necessary under normal conditions to strive for a constant low rate of increase in money in circulation at the level of 3-5%. In their opinion, it is more important to control the amount of money in circulation than the rate of interest and the amount of credit.

In conclusion, we note once again that the quantity theory of money over its more than 400-year history has gone from a doctrine that establishes the relationship between the quantities characterizing the state of money circulation (money supply, commodity price level, velocity of money) to the macroeconomic theory of monetary analysis. aimed at developing a mechanism for monetary regulation of the economy.

The evolution of the quantitative theory was briefly described by M. Blaug: “At the time of its heyday, the quantitative theory of money ceased to be what it once was, a theory that considered the main causes of changes in the value, or purchasing power, of money; rather, it has become a theory about how the amount of money affects the aggregate demand for goods and services, and through them on the yen and the level of production.

For many centuries, the basic assumptions about how the economy is influenced belonged to a belief system known as quantity theory of money. This system is quite complex and means different things for different authors.

It should be noted that the quantity theory of money is now dominant. According to this theory, the level of commodity prices also varies depending on: the more there are, the higher the prices of goods, and the lower the value of money, and vice versa.

It should be noted that the quantity theory of money includes two basic provisions:

• the principle of causality, that is, the change in goods is explained by changes in the amount of money in circulation;
• the principle of proportionality, that is, the prices of goods change in proportion to the change in the amount of money in circulation.

The quantity theory of money has come a long way in its development. Distinguish between early and modern quantity theory of money. The general assessment of the early theory boils down to the following: it remained mechanistic, that is, simplified, represented the relationship between the amount of money in circulation and the level of commodity prices, and only at the macroeconomic level, did not study the processes that occur within economic entities. The second stage in the development of the quantity theory of money began at the beginning of the 20th century, when gold coins began to be forced out of circulation, money that could not be exchanged for gold began to appear more often, and it became obvious to an increasing number of economists that money plays an active role in that the factor of their quantity affects the change in commodity prices. prices.

Neoclassical version of the development of theory. "Transactional variant" by I. Fisher. The "Cambridge Version" of Quantity Theory

It should be noted that the first who made an attempt to clearly formulate the relationship between various key factors of the monetary and non-monetary spheres according to the quantitative theory of money was the American economist I. Fisher. He put forward transactional version quantitative theory based on the so-called "equation of exchange":

where
M - the amount of money in circulation during a certain period;
V - the speed of circulation of the monetary unit;
R - the price of an individual product sold for a specified period;
Q - the total mass of goods (physical) sold in a given period.

I. Fisher concluded that R directly depends on M . Prices can rise with the same amount of money, that is, the price is affected by the amount of goods manufactured and put on the market:

I.Fischer studied all the factors of price changes, but preferred M ;
V - derived factor, it is formed depending on M and on the state of the sphere of circulation. The merit of I.Fischer lies in the fact that he drew attention to M . Of great importance Q , insofar as V and the production of goods can change by themselves, regardless of the change M under the influence of technological progress, social division of labor, human psychology and other factors not directly related to.

Subsequently, on the basis of the transactional version of the quantitative theory of money by I.Fischer and in connection with the criticism of this version, a group of professors at Cambridge University (A.Marshall, A.Pigou, D.Robertson) formulated their own version, called "Cambridge Version", or the theory of cash balances. In contrast to I.Fischer's version, in the "Cambridge version" the approach to the problem is not macroeconomic, but microeconomic. Cambridge economists focused on the motives for the accumulation of money by individual economic entities, concluding that they have a constant desire to accumulate money, that is, on the one hand, to have a reserve supply of means of payment in order to pay off all their obligations, and on the other — create an insurance reserve of resources in case of unforeseen circumstances. Cambridge economists gave a new formula for the relationship between money and prices:

M - cash balance (mass) of money from economic entities;
R - production in physical terms for a certain period;
R - the average price of a unit of production;
k - part RR , which economic entities want to store in the form of money (cash balance).

It should be noted that the Cambridge economists concluded that between M and R there is a connection and this connection is affected by k .

D. Keynes' contribution to the development of the quantity theory of money

J. M. Keynes also made his contribution to the development of the quantity theory of money. In his early work, he supported the Cambridge version, and later formulated his own version. He connected the quantitative factor of the money supply with real reproduced processes and through them traced the connection between the quantity of money and the prices of commodities. Keynes, unlike the Cambridge economists, found this connection through the rate of bank interest. In the theory of J. Keynes, it is substantiated that the mass of money ( M ) is not so directly related to prices as before, but it is connected through the mass of income and the rate of interest:

where
M - a lot of money;
q - total income
j - income, which was formed in connection with the rate of interest;
L1 and L2 - demand for money L2 called speculative income, which is received from bank interest.

It should be noted that in the 50s of the XX century it was obvious that countries with are involved in the global economy, it was mentioned in the programs of many Western countries. Scientists are trying to find its causes in Keynesian statements, that is, in the judgment that any income can remove the pressure of the mass of money on prices. The neoclassical quantity theory of money has been revived in the form monetarist theory, whose main representative is the American economist M. Friedman.

Modern monetarism as an alternative direction of quantity theory

Accusing J. Keynes of justifying the policy of inflation, modern monetarists again returned to the analysis of the direct relationship between money and prices at the macro level, arguing that the growth of the money supply leads to an increase in prices. In an environment where global market mechanism, fade away, and all economic indicators change moderately, the physical mass of goods ( Q ) to be implemented becomes manageable, prudent, predictable; monetarists can predict growth Q by 1, 2, 3, 4, 5 ... percent. The main factor here M which is in the hands of the government. Monetarists argue that it is not necessary to deal with the processes that the Cambridge economists were engaged in. " M » at the price level ( R ), which have developed and V "production that is or will be - this is the theory of the place of money, monetary policy in economic theory.

M. Friedman developed appropriate recommendations for the government on monetary policy. He calculated that if in the USA " M » increased by 4% annually, then prices would be stable, that is, 3% for an increase in production, 1% for a slowdown in the velocity of circulation of the money supply.

It is interesting that Margaret Thatcher, having borrowed these ideas, brought the UK out of a difficult economic situation. Modern monetarism is characteristic of a highly developed market economy.

Keynesian-neoclassical synthesis of monetary policy

The essence of the synthesis lies in the fact that, depending on the state of the economy, it is proposed to use either the Keynesian recommendations of state regulation or the recommendations of economists that defend the idea of ​​limiting state intervention in the economy. best methods they considered monetary methods. It was believed that the market mechanism itself is able to establish a balance between the main economic parameters - supply and demand, and.

The imitators of the ideas of neoclassical synthesis (J. Hicks, P. Samuelson and others) did not exaggerate the regulatory possibilities of the market. They believed that as economic interrelations and relations become more complex, it is necessary to improve and actively use various methods of state regulation.

School neoclassical synthesis distinguishes the expansion of research topics:

• a number of works on the problems of economic growth have been created;
• methods of economic and mathematical analysis have been developed;
• the theory of general economic equilibrium was further developed;
• proposed a methodology for the analysis of unemployment and methods of its regulation;
• thoroughly studied the theory and practice of taxation.

Monetary policy in the transition period in the light of modern monetarist theories

Politics- the activities of social classes, parties, groups, determined by their interests and goals, as well as the activities of bodies state power and public administration, reflecting the socio-economic nature of a given society; it is the art of government.

Monetary (monetary) policy- this is a coordinated activity of public authorities in managing money, which, using certain, specific mechanisms of work, is aimed at achieving predetermined macroeconomic goals.

Economic content economic policy is as follows:

1. - this is one of the sectors of the economic policy of the highest bodies of state power;
2. The highest bodies of state power regulate money as a system of relations between subjects of the economy;
3. The regulation of money is one of the mechanisms of state influence on:
   • nature (quality) and volume of exchange of goods, works and services between economic entities;
   • dynamics of distribution created to final consumers, spending in general and gross fixed capital formation, change in inventories, acquisition (excluding disposals) of valuables, net exports, proportions of distribution of total final consumer spending on total final consumer spending of households, commercial organizations, sector government controlled.
4. Monetary policy is supported by its inherent monetary mechanisms.

The highest ultimate goal is to ensure and growth of real output.

2.2 Keynesian money theory and monetarism

The Keynesian theory of money and monetary regulation is a theory about the essence of money and its impact on capitalist production, proposed by Keynes in the late 20s and early 30s of the 20th century. Keynes, denying the commodity nature of money, following the German economist G. Knapp, declared money to be "chart", having "assigned value". Speaking against a number of provisions of neoclassical theory, Keynes formulated his own understanding of the role of money in the economy. He modified the Cambridge version of the quantitative theory in his doctrine of "liquidity preference". The main components of the concept are set out in the two most famous works: "Treatise on money" (1930) and "General theory of employment, interest and money" (1937).

In the Keynesian scheme of causation, monetary factors played an important role. Keynes considered the process of accumulating money from the subjects of the economy as a factor in uncoordinating the mechanism of reproduction. He associated the role of money with the presence of uncertainty in the processes of making economic decisions. The main form of links between the money circulation process and the real sector of the economy, according to Keynes, is the rate of interest, which depends on the laws of the money market and at the same time affects the propensity of economic entities to invest.

Keynes formulated and substantiated three main motives for hoarding (money accumulation):

§ transactional;

§ precautions;

§ speculative.

The first two reflect the traditional role of money as a means of circulation and means of payment (transactional demand) and depend on barter transactions (), which corresponds to the provisions of the Cambridge version of the quantity theory of money. The demand for speculative balances is made dependent on the factor of the rate of interest. In this regard, the aggregate demand for money () was defined as a sum of two elements of transaction (), which is a function of income, and speculative (), which is a function of the rate of interest. Keynes's model was presented in the following form:

§ -- total income ();

§ - the rate of interest.

Keynes defined the transactional motive as the desire to fill the time gap between the receipt of income and its expenditure. The degree of influence of this motive depends on the amount of income and the normal duration of the time interval between its receipt and use.

where is a constant value. This conclusion is made along with the assumption that the time interval between the receipt of income and its expenditure is constant. A change in this interval leads to the need to manage cash balances on the part of the economic entity, which are then considered as desirable transaction balances, since this concept implies the possibility of choice. The desired size of the balances means that the subject of the economy can choose the optimal cost model, and therefore, determine the value. In this case, it is necessary to pay attention to the differences in the interpretation in the pre-Keynesian quantitative theory and in the Keynesian model. In the classical quantity theory, as shown above, is the reciprocal of the velocity of circulation of the entire money supply. In Keynes's model, it refers only to the velocity of circulation of transactional residues; the velocity of circulation of all cash balances is also affected by the demand for speculative cash balances, and, as a consequence, the velocity of circulation of money is a function of the interest rate.

The Keynesian theory of speculative demand differs significantly from monetary theories (their essential features that determine the role of money in the economy will be discussed below). The demand for money in Keynesian theory becomes an unstable and unpredictable quantity. It is the preference for liquidity and the amount of money supply (money supply), according to Keynes, that determine the rate of interest, which affects the amount of investment. The change in investment, in turn, affects the volume of aggregate demand, which forms the main parameters of the economic system (employment, output and national income). The rate of interest is considered as a factor mediating the influence of money on the economy.

Thus, Keynes rebuilt the theory of money by introducing the rate of interest into it. He presented money as one of the most important factors in the formation of investment demand and displaced the traditional relationship between money and prices.

Monetarism -- economic theory, according to which the amount of money in circulation is a determining factor in the formation of the economic situation and there is a direct relationship between changes in the money supply in circulation and the value of the gross national product. Originated in the United States in the mid-1950s. Supporters of monetarism argue that government measures to stimulate demand, recommended by the Keynesians, not only do not improve the state of the economy, but give rise to new imbalances and crisis recessions.

The monetarist version of the quantity theory of money is different from its traditional variants. The pure theory of demand for money put forward by M. Friedman, the leading theoretician of the new quantity theory, is presented in his essay "The Quantity Theory of Money: A New Formulation" (1956). The purpose of revising the classical quantity theory was to find its connection with the laws of microeconomics. The main attention is focused on the study of the problem of demand for cash balances, i.e. regularities in the formation of the need for money on the part of the subjects of the economy. It should be emphasized that in the monetarist concept, the demand for money was considered as a relatively stable value that ensures the sustainability of the development of the economy. This premise in the study did not fundamentally change the essence of the quantity theory, since "... a stable money demand function is just another way of expressing the constancy of the velocity of money, which ... has always been the premise of the quantitative theory. However, in the monetarist version, the rigidly determined velocity formulas are replaced by a probabilistic relationship that allows significant fluctuations in the numerical values ​​of this indicator.

Obviously, the monetarist concept is a further development of the Cambridge version of the quantity theory of money. Carefully developed the question of the nature of income

on assets that serve as an alternative to money, and resource (budget) restrictions. Friedman's money demand model is based on the behavior of two types of economic agents: households and firms. For the former, money is a source of wealth storage, and for the latter, it is a capital asset. Money is considered as a component of accumulated and fungible assets. Main function money as an element of the portfolio of assets of economic entities is to ensure payments and create a liquidity reserve. Taking into account this main function of money, a list of factors is determined, under the influence of which the demand of economic entities for monetary assets is formed in order to build a demand function for money. These factors included the following:

§ expected income from money as a liquid asset ();

§ expected price changes;

§ income from bonds and shares in the form of interest payments and dividends (,);

§ national income at constant prices ();

§ "physical" component of national wealth ();

§ other factors affecting the demand for money ().

As a result, the equation for the demand for money, according to Friedman, takes the following form:

where is the real cash balances of economic entities (planned demand for cash balances).

This equation takes into account the price influence factor, which determines the inverse relationship between the purchasing power of money and the price level. For these purposes, not nominal, but real (deflated by the price level) cash balances of economic entities are introduced into the equation.

The fact that cash balances are treated as an asset comparable to other asset classes suggests that Friedman's theory is expressed in terms of stocks rather than flows. This approach allows us to analyze the proposed equation in terms of real income (). This variable can be interpreted as a budget constraint. Comparing the returns on alternative assets gives an economic agent the opportunity to decide how much of the total wealth should be held in the form of money. But this procedure does not allow to determine the level of required cash balances. This is made possible by introducing into the equation, along with relative returns, the total amount of wealth. Real income() thus represents the wealth constraint. Given propensities (expressed by a variable), economic agents maximize income given the budget constraint, defining them by their total wealth and the relative returns they receive from their assets.

The emergence of the monetarist concept of the demand for money for a number of decades led economic thought to the search for "statistically reliable" equations for the demand for money. In particular, a number of works by J. Judd and J. Skadding, A. Meltzer, S. Goldfeld are devoted to this issue. "Equations of this type have become very popular and have received the status of 'standard' money demand equations."

However, further studies showed the inaccuracy of the demand for money forecast obtained using such equations, which indicated the instability of demand for cash balances. The main problem was that the money supply factor was not taken into account in the monetarists' models. As the American economist N. Kaldor emphasized, "Friedman's persistent attempts to substantiate the quantity theory with the help of a stable demand function for money or a stable velocity ... are critically dependent on whether the amount of money is an exogenous value, set at the discretion of the monetary authorities, regardless of demand put on money."

The question of the possibility and reality of exogenous money emission is inextricably linked with the credit nature of modern money. Credit money is a collective concept. "The universal exchange equivalent, embodied in credit money, corresponds to the equivalent of the world of commodities. It can be regarded as an evolutionary form of the classical universal equivalent.

The demonetization of gold led to the loss of an important component of the universal equivalent: the abstract value of the golden substance of money was lost, as well as the use value of the money commodity. The universal equivalent is left with only the exchange value and the formal use value of money.” In the credit form of money, the external embodiment of value is a debt obligation as a carrier of commodity capital.

The credit nature of modern money is manifested in the methods of their issue, which are associated with lending by the banking system to economic entities and the state. The supply of credit money is thus closely related to the deposit base of the banking system. It should also be emphasized that if initially the main forms of credit money were bills, banknotes and checks (as the main form of deposit money), then the main trend of the last century has been the development of such a form of credit money as electronic deposit money.

Monetarists reject the credit nature of modern money, since such an interpretation indicates the presence of a passive reaction of the money supply to changes in trade, which contradicts the exogenous principle of issuing means of payment in monetarist schemes.

To confirm the controllability of the money supply by the central bank, monetarists use the concept of a money multiplier based on the regulation of the monetary base. The composition of the monetary base includes: the amount of cash issued into circulation, the balances on the reserve accounts of commercial banks with the central bank. The "base-multiplier" model plays an important role in substantiating the monetarist thesis about the autonomy of the money supply.

This concept was criticized by the followers of the Keynesian school - J. Tobin, N. Kaldor. They emphasized that in an economy based on the circulation of credit money, the money supply changes in direct proportion to the demand of economic entities for cash and bank deposits.

At the same time, V.M. Usoskin rightly draws attention to the superficial nature of the contradictions between the two theoretical directions of monetary analysis of the economy. "Representatives of each faction, in the heat of a dispute, deliberately simplify the picture, snatching and absolutizing individual features of the monetary mechanism. The modern process of forming the money supply is very complex and is influenced by diverse economic forces acting in different, sometimes opposite directions ... Credit channels for issuing money do not guarantee full compliance of this output with the demand of the economy and do not eliminate the independence and autonomy of processes in the monetary sphere, their reverse effect on the market situation ... the imbalance of money circulation is a real fact.

Modern monetary systems combine a credit and paper-money nature, since the ability of the state as an element of the economic system to form a demand for money is high. This provision is confirmed in the system of lending by the banking system of the state, which reduces the relationship and interdependence between the supply of money and the demand for them. The state uses monetary and financial system as a source of financial resources and as a lever of influence on the state of economic activity. Violation of the credit basis of modern money leads to a violation of the optimal boundaries of monetary circulation.

One of the defining features of monetarist theory is to give money a fundamental, primary role in influencing the state of the economic system (monetary cycle theory). Modern supporters of this theory (M. Friedman, A. Schwartz, K. Brunner) associate fluctuations in the economic environment with changes in the money supply. The starting point of the monetarist concept of the cycle is, as noted above, a stable demand function for cash balances. The following causal relationship is then established:

§ the need for money is stable and not subject to sharp fluctuations under the influence of economic conditions;

§ the main source of imbalance in the economic system is shifts in the money supply;

§ the money supply can be effectively controlled by the central (issuing) bank.

In the monetarist concept of cycles, primary attention is paid to the statistical correlation of changes in the amount of money (money supply) and other characteristics of the economic system (GDP, consumer spending, commodity prices). The presence of such a correlation was considered by monetarists as evidence of the regularity of the influence of money on the level of economic activity. In the most complete form, the above provisions are presented in the book Fridmsna M. and Schwartz A. "Monetary history of the United States. 1867-1960." (1963). The main purpose of the work is to substantiate the idea of ​​the determining role of money in the cyclical fluctuations of the economic situation. The practical confirmation of the theory is the statistical analysis of the series economic indicators: money supply, income, prices and velocity of money. Indicators of the state of the production sector are aggregated into one indicator of nominal money income.

An important place in monetarism is occupied by the question of the causes and factors of changes in the money supply. In particular, it is determined that the change in the money supply accumulated by economic entities depends on the change in the following indicators:

§ - a stock of money of increased strength (their value is equal to the amount of cash that is stored in the private sector, and cash that is in the banking system as reserves). This stock in modern society may determine the government (though not necessarily);

§ -- the ratio of the stock of cash in the private sector to the total amount of money, which is determined by the behavior of the private sector;

§ -- the ratio of cash reserves of the banking system to total amount bank deposits (or the total assets of banks in a simplified model).

The problem was to find out to what extent each of these variables influenced the dynamics of the money supply in the historical aspect.

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