Economic system. Changes in economic situation of Russia

Московський Державний УніверситетПриладобудування та Інформатики

реферат з англійської мови натему:

В«Економічна система.Зміна економічної

ситуації в Росії В»

Economic system. Changes in economic situation of Russia

Виконав студент 1-гокурсу:

спец.080801

гр. МФ ЕФ2-06-01 ДО

Князєв В.В.

Перевірила:

МанішоваВ.Д.

Можайськ, 2007.

В«Economic system.Changes in economic situation of Russia В»

Contents

1. Economic system ................................................ ................................... 3

1.1.The division of economic systems ........................................ ......... 3

2. List by hands-on and hands-off ......................................... .................... 4

3. Types of economic systems .............................................. ..................... 4

3.1 Market economy ............................................ ................................ 4

3.2 Mixed economy ............................................ ................................. 4

3.3 Planned economy ............................................ ............................... 5

3.4 Traditional economy ............................................ .......................... 6

3.5 Participatory economics ............................................ .................... 6

4. Changes of an economicsituation in Russia .......................................... 7

4.1. Recent economicdevelopments ................................................. ... 7

1. Economicsystem

An economic system is a mechanism (social institution)which deals with the production, distribution and consumption of goods and servicesin a particular society. The economic system is composed of people, institutionsand their relationships to resources, such as the convention of property. Itaddresses the problems of economics, like the allocation and scarcity ofresources.

1.1 The division ofeconomic systems

There are several basic and unfinished questions thatmust be answered in order to resolve the problems of economics satisfactorily.The scarcity problem, for example, requires answers to basic questions, suchas: what to produce, how to produce it, and who gets what is produced. Aneconomic system is a way of answering these basic questions. Different economicsystems answer them differently.

There is often a strong correlation between certain ideologies,political systems and certain economic systems (for example, consider themeanings of the term "communism"). Many economic systems overlap eachother in various areas (for example, the term "mixed economy" can beargued to include elements from various systems). There are also variousmutually exclusive hierarchical categorizations.

The basicand general economic systems are:

В·Market economy (the basisfor several "hands off" systems, such as capitalism).

В·Mixed economy (acompromise economic system that incorporates some aspects of the marketapproach as well as some aspects of the planned approach).

В·Planned economy (the basisfor several "hands on" systems, such as socialism).

В·Traditional economy (ageneric term for the oldest and traditional economic systems)

В·Participatory economics (arecent proposal for a new economic system)

An economic system can be considered a part of the socialsystem and go home hierarchically equal to the law system, political system, culturalsystem, etc.

2. List by hands-onand hands-off

Typically, "hands-on" economic systemsinvolve a greater role for society and/or the government to determine what getsproduced, how it gets produced, and who gets the produced goods and services,with the stated aim of ensuring social justice and a more equitabledistribution of wealth (see welfare state). Meanwhile, "hands-off"economic systems give more power to certain private individuals (or corporations)to make those decisions, rather than leaving them up to society as a whole, andoften limit government involvement in the economy.

The primary concern of "hands-on" economicsystems is usually egalitarianism, while the primary concern of"Hands-off" economic systems is usually private property. Libertarianstarget individual economic freedom as a primary goal of their"Hands-off" policies.

The following list divides the main economic systemsinto "hands-on" and "hands-off," it attempts to structurethe systems in a given section by alphabetical order and in a verticalhierarchy where possible.

3. Types of economic systems

3.1. Market economy

A market economy (also called a free market economy ora free enterprise economy) is an economic system in which the production anddistribution of goods and services take place through the mechanism of freemarkets guided by a free price system. In a market economy, businesses andconsumers decide of their own volition what they will purchase and produce.Technically this means that the producer gets to decide what to produce, howmuch to produce, what to charge to customers for those goods, what to payemployees, etc., and not the government. These decisions in a free-marketeconomy are influenced by the pressures of competition, supply, and demand.This is often contrasted with a planned economy, in which a central governmentdecides what will be produced and in what quantities.

No pure market economy exists. Thus, almost alleconomies in the world today are mixed economies which combine varying degreesof market and command economy traits. For example, in the United States thereare more market economy traits than in Western European countries.

3.2. Mixed economy

A mixed economy is an economy that has a mix ofeconomic systems. It is usually defined as an economy that contains both private-ownedand state-owned enterprises [1] or that combines elements of capitalism and socialism, or a mix of marketeconomy and command economy.

There is not one single definition for a mixedeconomy, but relevant aspects include: a degree of private economic freedom(Including privately owned industry) intermingled with centralized economicplanning (which may include intervention for environmentalism and socialwelfare, or state ownership of some of means of production).

For some states, there is not a consensus on whetherthey are capitalist, socialist, or mixed economies. Economies in states rangingfrom the United States to Cuba have been termed mixed economies. By mostdefinitions, Canada could be referred to as a mixed economy, as Canadian healthcare is nationalized in order to provide health care free of charge.

3.3. Planned economy

A planned economy (also known as command economy andcentrally planned economy) is an economic system in which the state or governmentcontrols the factors of production and makes all decisions about their use andabout the distribution of income. In such an economy, the planners decide whatshould be produced and direct enterprises to produce those goods. Plannedeconomies are in contrast to unplanned economies, ie a market economy, whereproduction, distribution, and pricing decisions are made by the private ownersof the factors of production based upon their own interests rather than uponfurthering some overarching macroeconomic plan.

A planned economy may either consist of state ownedenterprises, private enterprises who are directed by the state, or acombination of both. Though "planned economy" and "commandeconomy "are often used as synonyms, some make the distinction that undera command economy, the means of production are publicly owned. That is, aplanned economy is "an economic system in w...hich the government controlsand regulates production, distribution, prices, etc. "but a commandeconomy, while also having this type of regulation, necessarily has substantialpublic ownership of industry. Therefore, command economies are plannedeconomies, but not necessarily the reverse (example: Nazi Germany's privateownership yet use of the Four Year Plan could construe them as a plannedeconomy, but not necessarily a command economy, while the Soviet Union withpublic ownership would be a command economy).

Important planned economies that existed in the pastinclude the economy of the Soviet Union, which was for a time the world'ssecond-largest economy. Beginning in the 1980s and 1990s, many governments presidingover planned economies began deregulating and moving toward market basedeconomies by allowing the private sector to make the pricing, production, anddistribution decisions. Although most economies today are market economies or mixedeconomies, planned economies exist in some countries such as Cuba and NorthKorea.

3.4.Traditional economy en.wikipedia.org/wiki/Planned_economy- _note-2 # _note-2

A traditional economy is aneconomic system in which resources are allocated by inheritance, and which hasa strong social network and is based on primitive methods and tools. It isstrongly connected to subsistence farming. In the majority of countries traditionaleconomy has been replaced by command economy, market economy or mixed economy.However, it is found today mainly in underdeveloped, agricultural parts of SouthAmerica, Asia, and Africa. There are some advantages anddisadvantages in a traditional economy. Advantages: a traditionaleconomy fosters the sense of community, as it causes little friction amongmembers and provides a sense of security and psychological comfort.Subsequently, there is a relatively low unemployment rate and low crime rate. Atraditional economy allows for a greater degree of autonomy as no money orlittle is given to the government and there is no competition. Disadvantages: atraditional economy does not allow for much economic growth and development aschanges are very slow and there is a lack of social mobility. A traditionaleconomy does not take advantage of technology and there is relatively littlepromotion of intellectual and scientific development. With no incentives for entrepreneurs,the consumer choice is diminished, which leads to a lower standard of living.

3.5. Participatory economics

Participatory economics, often abbreviated parecon, isa proposed economic system that uses participatory decision making as an economicmechanism to guide the allocation of resources and consumption in a given society.Proposed as an alternative to contemporary capitalist market economies and alsoan alternative to centrally planned socialism or coordinatorism, it isdescribed as "an anarchistic economic vision". It emerged from thework of activist and political theorist Michael Albert and that of radical economistRobin Hahnel, beginning in the 1980s and 1990s.

The underlying values ​​that parecon seeks to implementare equity, solidarity, diversity, and self-management. It proposes to attainthese ends mainly through the following principles and institutions:

В·workers 'and consumers'councils utilizing self-managerial methods for decision making,

В·balanced job complexes,

В·remuneration according toeffort and sacrifice, and

В·participatory planning.

4. Changes of an economic situation inRussia

4.1. Recent economic developments

A booming domestic market continues todrive strong economic growth in Russia. Substantial net capital inflows havenow joined receipts from resource exports in fueling domestic demand. In thiscontext, the pace of economic growth has accelerated since the second quarterof the year. Annual GDP growth could reach 7.0 percent. Fixed capitalinvestment and FDI have also exhibited impressive growth. The economicexpansion continues to be concentrated primarily in non-tradable sectors of theeconomy that have profited from a stronger ruble. Stagnating production, highinvestment needs, and rapidly-growing domestic demand are raising increasingconcerns about the state of the Russian energy sector.

Following the stabilization of oil prices,Russia's large current account surplus has finally begun to contract. Yet astronger capital account has somewhat compensated for this trend, supportingthe continued accumulation of foreign reserves, albeit at a slower pace. Rapidgrowth in money supply and higher federal expenditures in 2006 have beenlargely absorbed by higher-than-expected economic growth. Inflation has slowedconsiderably in the second half of the year. The planned 2007 budget foreseesan expansion of federal expenditures of 0.9 percent of GDP, with priorities inadditional expenditures going to the state apparatus, investment and socialprograms.

Real incomes of the population, wages, andretail trade have been growing in double digits, significantly outpacing GDPgrowth. Consistent with this picture, import growth soared to 29 percent forthe first three quarters of the year.

Recent policy initiatives of the government include aplanned package of measures aimed at promoting diversified growth and theinnovation economy and new legislative initiatives on migration. A long awaitedbilateral agreement with the United States could pave the way for Russia'saccession to the WTO in the near future.

MainMacroeconomic Indicators

2001 2002 2003 2004 2005 2006

GDP growth,%5.1 4.7 7.3 7.2 6.4 6.5

Industrialproduction growth, yoy,% 4.9 3.7 7.0 8.34.0 4.3

Fixed capitalinvestment growth,%, yoy 8.7 2.6 12.5 10.9 10.512.6

Federalgovernment balance,% GDP 3.0 2.3 1.7 4.27.5 8.6

Inflation (CPI),% Change, yoy 18.6 15.1 12.0 11.7 10.97.5

Current Account,billion $ 35.1 32.8 35.9 60.186.6 79.9

Reserves(Including gold) billion $, end-op 36.6 47.8 76.9 124.5182.2 272.5

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