The Market Economy

Keynesians argue that the market economy is deprived of a mechanism that ensures its stability. Conducting fiscal and monetary policies necessary to alleviate passage of economies of sharp ups and downs that accompany its development during the passage of the phases of the business cycle, monetary policy is seen as secondary with respect to the fiscal. Monetarist approach based on the fact that the system of market competition provides a high degree of macroeconomic stability. Macroeconomic stability is achieved when government intervention in functioning of the economy is the minimum necessary. Undue influence of the state through fiscal and monetary policy leads to instability of the economic system deepens the contradiction in terms cyclical fluctuations. Proponents of this trend was charged orthodox Keynesians in ignoring the important role of monetary factors in the reproduction process and the apparent proinflyatsionnoy policy. Particular attention they paid to the study of various effects, and national economic consequences of monetary developments, highlighting as the main link the dynamics of money supply.

As a result of the above discussions in the World economic theory and regulatory practice gained wide acceptance monetary factor of economic development and active use of monetary measures in economic policy. At present, many economists adhere to the extreme or extreme Keynesian monetaristskih views, most theoretical models have a synthesized form. In the framework of monetary policy in many countries was laid so called principle of compensatory regulation, which is based on the union of two opposite set of activities that are applied at different phases of economic cycle.

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