Referat Bajardi: Safarova Parizod mm53 I tekshirdi: Allayarov. Sh theme: Unemployment and its types

Types of inflation

Inflation is one of the main determinants of a market economy, the higher its rate, the greater the dangerous impact on the economy. The impact of inflation on the economy is particularly dangerous in countries that are moving from one economic system to another. This is because this period is associated with the liberalization of prices and, accordingly, a sharp increase in their overall level. However, in times of inflation, the prices of all goods will not increase: some will remain stable, and some may fall.

If the mass of goods and services in the economy grows more slowly than aggregate demand, or remains unchanged as aggregate demand increases, this imbalance is offset by an increase in the price level. As a result, the purchasing power of the currency decrease and the national economy needs additional money supply. Inflation is not only a disruption of money circulation, but also a disease of the whole reproduction mechanism, the result of macroeconomic disturbances. In addition to rising prices and declining purchasing power of the currency, there are three signs of inflation. These are: exchange rate fluctuations; changes in lending conditions due to higher prices and shorter terms; increase in the price of a consumer basket of daily necessities.

Modern inflation is characterized not only by a decrease in the purchasing power of money as a result of a steady rise in prices for goods and services, but also by disproportions in the production process, negative factors in money circulation, finance and credit. The main causes of inflation are the balance between the sectors of the economy, savings and consumption, supply and demand, government revenues and expenditures, the money supply and demand of households, and the credit expansion of the central bank. These factors, to a lesser extent, can have a different effect on inflation and its level.

Typically, inflation is divided into two types, demand inflation and supply inflation. Demand inflation is caused by a sharp increase in demand in the economy and its inability to meet the real volume of production. That is, in conditions close to full employment, the productive capacity of the economy cannot meet the growing aggregate demand. Excess demand puts economic pressure on the rise in real commodity prices and leads to demand inflation. Or, in simple words, “too much money hunts too many goods”. The main reasons for demand inflation are full employment and rising wages. So, inflation depends on many factors such as demand, supply, employment, price production pictures.

In international practice, there are three main forms of inflation in terms of rising prices, in the growth of money supply:

1. 
   Slow inflation. This inflation exists in economically developed countries, in which case the prices for goods, works and services may increase by an average of 3% to 10% per year. In these countries, the money supply is maintained and the purchasing is maintained.
   
2. 
   Severe inflation. This inflation exists in economically developing countries, in which case the prices for goods, works and services can increase from an average of 10% to 100% per year and in some cases up to 200%. As a result, the money supply increase and the purchasing power of the national currency decreases. The process of accumulation of gold, real estate, rather than the accumulation of the national currency among the population of the country is intensifying.
   
3. 
   Uncontrolled inflation. In this inflationary situation, prices for goods, works and service will increase by more than 100% per year or more than 100% per month. In this case, there will be a crisis in the national economy. As a result, the difference between price and wages increase as production and the market operate without control. The population of the country buys goods with
   

the remaining paper money. This situation leads to the overflow of excess paper money in circulation, which is not provided with goods and services.

One of the alternative to anti-inflationary monetary methods is the policy of regulating prices and incomes. This method involves the coordination of revenue growth and price growth.

The implementation of income and price regulation policy is carried out by the government by freezing prices and income levels, linking the growth of wages in monetary terms to the growth of average labor productivity. Measure to combat inflation include changing the structure of taxes, reducing the share of direct taxes in total tax revenues, increasing the share of direct taxes, lowering tax rates, strengthening their incentive functions, reducing state budget expenditures.

In truth, the high inflation rate is the number one concern. As an economist, I can give a lot of causes to it, but I would say one thing: the cause for high inflation were the imminent steps that we should have taken, namely increase in prices for wheat and cotton, fuels and lubricants, great many loans due to the “hunger for investment”, contribution of large funds from the budget due to numerous social problem.

Earlier, the Central Bank projected the base inflation rate to be 12-13.5% for 2020. A gradual transition to inflation targeting has begun in 2020, the benchmark for reducing inflation by 2021 will be 10%, by 2023-5%, it follows from the Nov 19 presidential decree.

Theme: International monetary system.

The monetary system is the currency of the problem, the currency, the rules and forms of money issue, the monetary relations introduced by national legislation in the country. Historically, the monetary system has had the appearance of metal money and the circulation of banknotes. In turn, the system of metal money circulation is divided into bimetallism and monometallism. The current monetary system of the Republic of Uzbekistan was established in accordance with the Law “On the Central Bank of the Republic of Uzbekistan” adopted on December 21, 1995. The official currency is the soum. The exchange rate of the soum against foreign currencies is set by the Central Bank of the Republic of Uzbekistan and published in the press. Cash (banknotes and coins) and non-cash (in the form of funds in accounts with credit institutions) are available in Uzbekistan. The Central Bank of the Republic of Uzbekistan has the exclusive right to issue cash, organize their circulation in the territory of the Republic of Uzbekistan and withdraw from circulation.

International monetary system refers to a system that forms rules and standards for facilitating international trade among the nations. It helps in reallocating the capital and investment from one nation to another. It is the global network of the government and financial institutions that determine the exchange rate of different currencies for international trade. It is a governing body that sets rules and regulations by which different nations exchange currencies with each other.

With the growing complexity in the international trade and financial market, the international monetary system is necessary to assign a standard value of the international currencies. The rules and regulations set by the international monetary system to regulate and control the exchange value of the currencies are agreed upon by the respective governments of the nations. Thus, the government`s stand may affect the decision making of the international monetary system. For example, change in the trade policy the international trade of goods and services. International monetary system motivates and encourages the nations to participate in the international trade to improve their BOP and minimize the trade deficit. It has grown over the years as a single architectural body with a vision to integrate the global economy. Some of the important achievements of the international monetary system over the years have been the establishment of World Bank and International Monetary Fund in the year 1944. The establishment of IMF and World Bank is the result of the agreement among nations to set a body, which promotes and a supports the international trade. Now, let`s discuss the evolution of international monetary system. Earlier in 1870 to 1914, trade was carried with the help of gold and silver without any institutional support. At that time, monetary system was decentralized and market based and money played a minor role as compared to gold in international trade. The use of gold decline after World War I as war increased expenditure and inflation. In such a scenario, countries planned to revive the standard of gold but failed due to great depression. Thus, in 1944, 730 representatives of 44 nations met at Bretton Woods, New Hampshire, United States to create a new international monetary system. This was called as the Bretton Woods system, which became a turning point in the history of international trade. The aim of new international monetary system is to create a stabilized international currency system and ensure a monetary stability for all the nations. It was decided that since the United States held most of the world`s gold, thus all the nations would determine the values of their currencies in terms of dollar. The central banks of nations were given the task of maintaining fixed exchange rates with respect to dollar for each currency. The Bretton Woods system ended in 1971 as the trade deficit and growing inflation undermined the value of dollar in the whole world. In 1973, the floating exchange rate system. Also known as flexible exchange rate system was developed that was market based. During the years of independence, the Republic of Uzbekistan has succeeded in building the modern monetary system. The national currency was introduced, monetary and currency markets have been developed along with the provision of independence of the Central Bank. However, the stability of national monetary system has not been ensured yet. In particular, the monetization level of the economy remains low, while the GDP deflator is rather high. In addition, high level of national currency devaluation is observed in recent years. Eventually all these years. Eventually all these urgent problems will negatively influence the stability of macroeconomic growth. The relatively high level of the GDP deflator has led to the significant growth of the money supply, which resulted in a strong devaluation of the national currency of Uzbekistan. For example, in 2012 the devaluation level of the national currency against the U.S dollar was 10.5%. In addition, because of the low monetization coefficient, a crisis of defaulted payments among business entities has arisen. The author proposes to increase the volume of foreign currency swap and Gold Swap operation of the Central Bank of Uzbekistan in order to decrease the devaluation of the national currency. The author also suggests increasing the flexibility of monetary policy instruments such as an open market policy and reserve requirements to ensure the stable growth of the money supply.

Theme: Different Theories of International trade.

International trade is the process of exchanging goods and services between different states and national economies. Although I existed in international trade, it was not until the 19^th century, when almost all developed countries began to participate in international trade, that they entered the world market. International trade is characterized by indicators such as foreign trade turnover, exports and imports, trade balance.

International trade has a number of unique features:

1. 
   The mobility of economic resources between countries is much lower than within the country. For example, workers can move freely from region to region within the country. Not to mention the language and cultural barriers between countries, immigration laws place severe restrictions on the migration of labor between countries. Differences in tax legislation, other government regulatory measures, and a number of other institutional berries limit the movement of real capital across national borders.
   
2. 
   Each country uses a different currency. This creates certain difficulties in international trade between the countries.
   
3. 
   International trade is doomed to political interference and control, which differs significantly in nature and degree from the measures applied to domestic trade.
   

According to the theory of comparative costs, through free trade, the world economy can achieve efficient allocation of resources and a high level of material well-being. Protectionism, that is, barriers to free trade, reduces or eliminates the benefits of international specialization. There are many obstacles to free trade. The many ones are: customs duties are excise taxes on imported goods, which can be introduced for profit or protection. Import quotas set the maximum volume of goods that can be imported over a period of time.

Undefined barriers include licensing systems, product quality standards, or simple administrative restrictions; Voluntary export restrictions are a relatively new form of trade barrier. In this case, foreign companies “voluntarily” limit their export to a particular country. With the help of international trade, countries can develop their interstate specialization, increase the productivity of their resources and thereby increase the total volume of production. Individual states can specialize in goods that can specialize in goods that can be produced with the highest relative efficiency and can be won by exchanging them for goods that are not in a state of efficient production.

Why do countries trade here? The question arises. First, economic resources are very unevenly distributed among the countries of the world: countries differ sharply in their supply of economic resources. Second, the efficient production of different goods requires a combination of different technologies or resources. The impact of these two situations on international trade can be easily explained. For example, Japan has a large and well-trained workforce, which is cheap due to the surplus of skilled labor. For this reason, Japan specializes in the efficient production of a wide range of labor-intensive goods, which require a large amount of skilled labor. Australia, on the other hand, has a very large area, insufficient human resources and capital, in short, the benefits that protected sectors gain from the introduction of trade barriers are a huge loss for the economy as a whole. Its structure and deficit. Balance of payments-an ordered record of the result of all economic transactions between residents of the country (households, enterprises and the state) and foreigners for a certain period of time (usually one year). Transactions – any exchange of value, in agreements on the transfer of ownership of goods, services or assets from residents of one state to residents of another state. Any transaction has two sides, and therefore the balance of payments follows a two-sided entry procedure. One transaction is reflected in the debit and credit parts of the balance of payments.

A loan is an outflow of value from a country, at the expense of which the residents of this country receive the equivalent of payments in foreign currency. Debit is the inflow of value into a country, at the expense of which residents spend foreign currency. The total amount of credits must be equal to the total amount of debits. As all balance of payments transactions include current and capital transactions, it consists of three components:

• 
  Current account:
  
• 
  Capital account:
  
• 
  Change of official:
  

Balance of payments structure.

I Current account

1. 
   Export of goods
   
2. 
   Import of goods
   

Balance of foreign trade balance

Export of services (income from foreign tourism, etc.-credit services)

Import of services (payments for tourism abroad, etc.-credit services)

Net income from investments (net income from credit services)

Net transfers

Balance on current operations

II Capital account operations

Capital inflows

Capital outflow

Balance of capital movements

Balance with current operations and capital movements

III. Changes in official needs.

The county`s foreign trade balance (balance of payments) reflects the state of international economic relations with foreign partners of the country and serves as an indicator for the implementation of its monetary, foreign trade policy and regulation of public debt.

The current account includes exports of goods and services imports net income from investments and net transfers. The difference between exports and imports of goods is the trade balance. Export of goods appear as loans and reserves in the National Bank. Imports reduce the country`s foreign exchange reserves. Net income from investments is net income from credit services, which is accounted for by national money invested abroad. If it is formed at the expense of the national currency capital invested abroad. If the national capital invested abroad yields more interest and dividends than the foreign capital invested in the country, then the net return on investment will be positive, otherwise it will be negative.

Net transfers represent the amount transferred to other counties (pensions, gifts, remittances or humanitarian aid abroad). Such payments reduce the country`s foreign exchange reserves.

Theme: The role of government in regulating the economy.

The state uses a number of methods to regulate the national economy. These methods can be summarized and groups as follows:

• 
  Direct methods;
  
• 
  Methods of indirect action;
  
• 
  Foreign economic methods.
  

In countries with a centralized system of government, the methods of direct influence on the state`s intervention in economic processes are predominant, while the market economy is primarily associated with the indirect regulation of economic processes. At the same time, all countries have a public sector of the economy. Public sector management is based on the state form of ownership, which is formed in three main ways:

1. 
   Nationalization of property by compensating the owners of the means of production in cash or securities;
   
2. 
   Creation of new enterprises, in some cases, integrated networks at the expense of the state budget;
   
3. 
   Purchase by the state of shares of private corporations and establishment of mixed public-private enterprises.
   

The state uses administrative means to directly regulate the economy. Administrative means rely on the power of state power and include prohibitions, permit, and coercive measures. Especially in times of industrial decline, measures to indirectly affect the economy are less effective and the use of administrative means is preferred. These methods include:

1. 
   Direct management of certain sectors of the economy –transport, communications, nuclear and electricity, utilities and other sectors. In this the state, as the owner of property and entrepreneur, actively participates in the economic life of its enterprises and organizations;
   
2. 
   A policy of “freezing” prices and wages. These are anti-inflationary measures of intervention in the economy, aimed at mitigating inflation;
   
3. 
   Organization of employment services (labor exchanges). The government will take measures to reduce unemployment by organizing these activities. Retrains them in necessary professions, provides benefits to the unemployed, provides assistance to the needy;
   
4. 
   Development and adoption of laws regulating the economic sphere (antitrust law, business, banking, securities market).
   

In this way, the development of market relations is guaranteed by law, the inviolability of various forms of property is ensured, monopolies are not allowed and conditions for free competition are created. In the indirect regulation of the economy, preference is given to economic incentives and tools. It is reflected in the monetary and budgetary policies of the state.

The main instruments of monetary policy are:

• 
  Discount rate regulation;
  
• 
  Setting and changing the minimum amount of reserves of financial institutions in the Central Bank;
  
• 
  Operations government agencies in the securities market (issuance, sale and payment of government bonds).
  

With the help of this support, the government will try change the supply and demand in the financial market in the expected direction.

For example, it uses an interest rate instrument to change the amount of money lent. The government changes the supply and demand for credit through the Central Bank in the following ways:

• 
  Changes the share of bank loans and reserves through the needs of the Central Bank;
  
• 
  The Central Bank provides low-interest loans to other banks, ensuring that they actively participate in lending and contribute to economic growth;
  
• 
  The government distributes treasury bonds, sells its bonds or buys securities through the Central Bank. As a result, the amount of money offered will change, which will affect the interest rate. The government`s policy of changing the supply and demand for money is called monetary policy.
  

The state budget policy is aimed at changing the part of its revenues and expenditures. Taxes are the main source of funding for government spending. They are also widely used to influence the activities of economic entities and social stability. Tax regulation by the state depends on the chosen tax system, the level of the tax rate, and the types of taxes and rate, and the types of taxes and tax benefits. The state also uses budget expenditures as a means of regulating the economy. Accelerated depreciation of fixed assets plays a special plays a special role in government regulation of the economy. In the current context, it is the main means of stimulating savings and structural changes in the economy, as well as an important stimulus that affects the economic cycle and employment.

Public capital investment plays an important role in regulating the economy. In particular, in conditions of deteriorating market conditions, stagnation or crisis, private capital investment will decrease, and public investment will decrease, and public investment will usually increase. In this way, the state ties to counteract the decline in production and rising unemployment. There are also a number of forms of government regulation of the economy:

Development of state economic programs;

Scientific research and development, government incentives for inventions and positive structural shifts in the economy;

Government regulation of the investment process and economic growth;

Government regulation of agriculture, etc.

The highest form of state regulation of the economy is state economic programs. Its task is to make comprehensive use of all methods and means of regulation. Economic programs can be medium-term, emergency or targeted. Medium-term general economic programs are usually designed for five years. Emergency programs are short-term in the face of stressful situations, such as crises, mass unemployment, and high inflation. The objects of such targeted programs can be different sectors, regions, social spheres and different directions of scientific research. State regulation of the economy is also carried out using foreign economic methods. This will have a direct impact on the country`s economic relations with the outside world through special tools and support. Measure to stimulate the export of goods, services, capital and scientific and technical achievements, export crediting, guarantee of foreign investment and export credits, introduction or abolition of restrictions on foreign economic relations, change of customs duties in foreign trade, Measures to attract or limit capital, attract foreign labor to the country, participation in international economic organizations and interstate associations are the main means of regulating foreign economic relations of countries.

Thus, all the considered internal and external economic methods (tools and support) of state regulation of the economy together have an impact on the process of reproduction in the national economy and the country`s foreign economic relations.

Theme: