Coursework: Economic growth, its factors and consequences. Theories of economic growth. Note that theories of economic growth Causes of average cyclical fluctuations

In economic science, there are two main directions of theories of economic growth: neo-Keynesian and neoclassical and, accordingly, two types of models that characterize it.

The neo-Keynesian movement arose on the basis of the ideas of J.M. Keynes about the relative instability of the capitalist economy and.

The neoclassical direction has its roots in the views of Adam Smith on self-regulation of a market economy, the factor theory of J.-B. Say and John Bates Clark's theory of marginal productivity of economic factors.

Keynesianism

The Central Problem of Macroeconomics for Keynesian theory - factors that determine the level and dynamics, as well as its distribution into consumption and savings (it is then transformed into capital accumulation, i.e. investment). It was with the shift in consumption and accumulation that Keynes linked the volume and dynamics of national income, the problem of its implementation and the achievement of full employment.

The more investments, the smaller the consumption today and the more significant the conditions and prerequisites for its increase in the future. Search for the reasonable relationship between saving and consumption- one of the permanent contradictions and at the same time a condition for improving production and multiplying the national product.

If savings exceed investment, then the country's potential economic growth is not fully realized. If investment demand outstrips savings, this leads to “overheating” of the economy and spurs inflationary increases in prices and borrowing abroad.

All Keynesian models are characterized by a general relationship between saving and investment. The rate of growth of national income depends on the rate of accumulation and the efficiency of investment.

Neo-Keynesianism

Among the neo-Keynesian models in economics, the most famous are the models of economic growth created by the English economist Roy Harrod (1900-1978) and the American economist of Russian origin Yevsey Domar (1914-1997). The versions of the models they proposed are very similar; they analyze a long period of sustainable economic growth, one of the main conditions of which is the equality of savings and investments (). However, in the long run there is a difference between saving today and investing tomorrow. For a number of reasons, not all savings turn into investments. The level and dynamics of savings and investments depend on the action of various factors. If savings are determined mainly by income growth, then investments depend on many variables: the state of the market, the level of interest rates, tax rates, and the expected return on investment.

In R. Harrod's complete model of economic growth, the relationships between three quantities are analyzed: actual (), natural () and guaranteed () growth rates.

The starting equation is the actual growth rate:

The sustainable rate of production growth, which is ensured by all population growth (this is one factor of economic growth) and all the possibilities for increasing labor productivity (this is the second growth factor), Harrod calls the natural growth rate, i.e. the kind that would have taken place if there had not been chronic unemployment, underutilization of capacity and economic crises. Harrod considers the third growth factor to be the size of accumulated capital and the capital intensity ratio.

The greater the amount of savings, the greater the amount of investment and the higher the rate of economic growth. The relationship between the capital intensity ratio and the rate of economic growth is inverse. The natural growth rate represents (according to Harrod) the maximum possible rate of economic growth given population growth and technological capabilities.

At a steady rate of economic growth, investment needs will be expressed by the value , where is the natural growth rate, by the growth of fixed and working capital. In the short and medium term, the need for investment may fluctuate during the cycle due mainly to the amount of working capital. From the point of view of a long-term perspective, with a constant rate of interest, it is a constant value; with a long-term decrease in the rate of interest, it grows, and with a long-term increase, it decreases.

The Harrod equation, expressing the conditions of equilibrium or its disturbance at a natural growth rate, has the form:

where S Y is savings.

Essentially, this is a modification of the Keynes equation: . The difference is that, according to Keynes, the size of investment is determined by the marginal efficiency of capital (rate of profit) and the interest rate, while Harrod connects these sizes with population growth, technical progress and the capital intensity ratio, i.e. with the growth of fixed and working capital. The amount of savings in both cases is determined by the marginal propensity to save.

Emphasizing the difference between the actual growth rate and the natural rate, and arguing that the gap between them can be closed, Harrod introduces a new category - the "guaranteed" growth rate - . “This is a predicted value, that general pace of progress that suits entrepreneurs: it is determined empirically, based on assessments of the past and expectations for the future.”

In the guaranteed growth rate equation, the magnitude refers to the past period and the magnitude refers to the future. those. the increase in investment depends on the share of savings in income.

If the actual growth rate coincided with the predicted guaranteed one, then sustainable continuous development would be observed. However, in a market economy such equilibrium occurs extremely rarely. The actual rate is lower or higher than the guaranteed one, which, given the relative constancy of the share of savings in income, as R. Harrod suggests, affects the dynamics of investment, lowering or increasing them, respectively. In this way, R. Harrod explains short-term cyclical fluctuations.

Harrod analyzes longer-term fluctuations in economic conditions on the basis of a comparison of guaranteed and natural growth rates and believes that the ratio is crucial in determining whether recovery or depression will prevail over a period of years.

According to the so-called fundamental equation of R. Harrod

those. for sustainable guaranteed growth, the actual need for savings is equal to its need as at the natural rate of growth. One of the essential conditions for sustainable economic growth is equality of savings and investment. If savings exceed investment demand, then excess inventories are formed, equipment is not fully used, and the number of unemployed increases. If investment demand outstrips savings, this contributes to inflationary price increases and “overheating” of the economy.

Neoclassical direction

At the center of the neoclassical movement is the idea of ​​equilibrium based on an optimal market system, considered as a perfect self-regulating mechanism that allows the best use of all production factors not only by an individual economic entity, but also by the economy as a whole.

In the real economic life of society, this balance is disrupted. However, equilibrium modeling allows one to find the deviation of real processes from the ideal.

A significant contribution to the development of the theory of economic growth was made by Nobel Prize winner American Robert Solow (b. 1924), who modified the Cobb-Douglas production function by introducing another factor - the level of technology development. At the same time, he proceeded from the fact that a change in technology leads to the same increase in:

where is product output; - main capital; — invested labor (in the form of wages); — level of technology development; is the Cobb-Douglas production function.

If the share of capital in product output is measured by such indicators as capital-labor ratio (or capital investment) per worker, and capital productivity (the number of products per monetary unit of production assets); the share of labor is based on labor productivity, then the contribution of technical progress is presented as the remainder after subtracting from the increase in output the share obtained due to the increase in labor and capital. This is the so-called Solow residual, which expresses the share of economic growth due to technological progress, or “advancement in knowledge.”

The prerequisites for analysis in R. Solow's model are: interchangeability of labor and capital (as in the Cobb-Douglas model), diminishing marginal productivity of capital; constant returns to scale, constant rate of disposal of fixed assets; absence of investment lags.

With a constant number of employees, the dynamics of the output volume depends on the volume of capital (in this case, per one employee, i.e. capital-labor ratio (capital-labor ratio). In turn, the volume of capital changes under the influence of investments and disposal of fixed assets. The size of investments depends on the norm savings, with the growth of which they increase, exceeding the retirement of capital, and the capital-labor ratio increases. With an increase in the capital-labor ratio, the growth rate of investments (savings) naturally decreases. Investments increase the stock of capital; retirement reduces the level of the capital stock at which investments are equal to its retirement, is the equilibrium level. capital-labor ratio. When this is achieved, the economy will be in a state of long-term equilibrium.

When growth becomes balanced, its further rate depends only on population growth and technological progress.

Population growth with the same amount of capital reduces the capital-labor ratio. The investments attracted in this case should not only cover the retirement of capital, but also provide capital for new workers in the same amount.

In order for the capital-labor ratio to remain constant even as the population grows, capital must grow at the same rate as the population:

Technological progress in the Solow model is the only condition for a continuous increase in living standards, since only with its presence is there a steady increase in the capital-labor ratio and output per employee, i.e. capital productivity.

However, as the capital-labor ratio (C/D) increases, the quantity of output per employee (Q/L) increases to a lesser extent than the capital-labor ratio, since the marginal productivity of capital falls.

Let us denote the production per employee (Q/L)q, the amount of capital per employee (K/L) by k (capital or capital-labor ratio), then the production function will take the following form:

As can be seen from Fig. 23.1, as the capital-labor ratio increases, there is an increase (the number of products per employee), but it increases to a lesser extent, since the marginal productivity of capital (capital productivity) falls, according to the law of diminishing returns.

In the Solow model, output is determined by investment and consumption. It is assumed that the economy is closed from the world market and domestic investments are equal to national savings, or the volume of gross savings, i.e. .

Rice. 23.1. Production function per capita

Currently, the concept of “economic development without growth” or “zero economic growth” has become widespread in Western countries. This is due, on the one hand, to the fact that, based on scientific and technological progress, a high level of per capita production has already been achieved, and on the other hand, the rate of population growth has significantly decreased. In addition, supporters of this concept believe that economic growth leads to disruption of the biosphere of human life and is limited due to the insufficiency of the planet’s raw materials and fuel resources.

In particular, a group of researchers led by Denis and Donella Meadows warn of the danger of a “global catastrophe” that threatens humanity as a result of technological progress destroying the environment.

Polemicizing with them, other specialists and scientists (the famous theorist and historian of economic thought, Russian scientist Yu. Olsevich; German economist and politician E. Pestel, etc.) believe that it is necessary to change growth trends, introduce restrictions on the use of natural resources, environmental pollution . With the help of modern technologies, it is quite possible to mitigate the contradictions between growing needs and limited resources.

There are many theories of economic growth, which can be roughly classified as follows:

• · Neo-Keynesian theories of economic growth
• · Neoclassical theories of economic growth (R. Solow model)
• · Empirical theories of economic growth
• New theory of endogenous growth
• · Neo-Keynesian theories of growth by E. Domar and R. Harrod

These theories arose as a result of the development and critical revision of the Keynesian theory of macroeconomic equilibrium. Based on such economic values ​​as national income, consumption, savings and investment, J. Keynes developed a theory designed to explain changes in the level of economic activity. He proved that during an economic downturn and rising unemployment, consumption and savings, as well as investment, decrease as a result of a decrease in income. Therefore, according to J. Keynes, in the absence of a market lever to increase aggregate demand, in order to revive business activity, the government must intervene in the economy, implementing macroeconomic fiscal policy by reducing taxes or increasing government spending.

Neo-Keynesian theories of economic growth were formulated by the American economist of Polish origin Yevsey Domar and the English economist Roy Harrod. The results they obtained turned out to be so close to each other that they later began to be called in science as the Harrod-Domar theory.

The main postulate of the neo-Keynesian theory of John Keynes is aggregate demand. An increase in effective demand is the most important factor in economic growth, through which the standard of living rises and the standards of people's quality of life improve.

Limitations of the theory Harrod-Domar is determined by the fact that:

• · economic growth depends only on the increase in investment, and this dependence is a linear function;
• · economic growth does not depend on the increase in the use of labor;
• · The theory does not take into account technological progress.
• · Neoclassical growth theories (R. Solow model)

The fundamentals of R. Solow's growth model are outlined in his article “Contribution to the Theory of Economic Growth.” R. Solow came to the conclusion that the main reason for the instability of the economy in the Harrod-Domar model is the fixed value of capital intensity, reflecting the rigid relationship between production factors - labor and capital (K/L). In accordance with the principles of neoclassical theory, the proportions between capital and labor should be variable (this is precisely the neoclassical nature of R. Solow’s theory of growth) . They are determined by producers minimizing costs depending on the prices of these factors of production. Therefore, instead of fixed K/L R. Solow included a linearly homogeneous production function in his model:

Y= F(K, L).

Dividing all terms into L and indicating the income per employee ( Y/L) through y, a capital intensity K/L through k, we get:

y=LF(k,l)=Lf(k).

As in the Harrod-Domar model, it is assumed that the population grows at a constant rate, and investment constitutes a constant share of income, determined by the saving rate u.

Rate of increase k then we can write it as

dk, = sf(k) - nk.

This so-called “fundamental equation” by R. Solow is expressed in words as follows: the increase in the capital-to-work ratio of one worker is what remains of specific investments (savings) after it has been possible to provide capital goods to all additional workers.

If sf(k) == nk, then the capital-labor ratio remains the same (dk = 0), i.e. the economy grows without any structural changes in the relationship between factors. This is balanced growth.

In the R. Solow model, in contrast to the Harrod-Domar model, the trajectory of balanced growth is stable. R. Solow shows this with the following graph (Fig. 1)

Straight nk This graph shows how much each worker should save and invest from his income to provide capital goods for future workers (including his own children).

Curve sf(k) demonstrates what his actual savings are depending on the level of capital ratio achieved. With the increase in capital ratio A; The growth rate of investments/savings naturally falls. The vertical distance between the curve and the straight line denotes, in accordance with the fundamental Solow equation, the differential change in the capital-labor ratio dk. At the point k* it is zero and there is balanced growth. At all points to the left k*(For example, k^) capital-labor ratio will grow, and at all points to the right k*(For example, k.) fall, so that the economy constantly shifts to the side k* and the balanced growth trajectory is sustainable.

In R. Solow's model, the savings rate s matters only until the economy enters the trajectory of sustainable development: the larger the value s, the higher the graph skn accordingly the level k*. But once growth has become balanced, its further pace depends only on population growth and technological progress.

"Golden Rule". From R. Solow’s model it followed that the higher the savings rate, the higher the capital-to-worker ratio of a worker in a state of balanced growth and, consequently, the higher the rate of balanced growth.

· Empirical theories of growth

Empirical research has made a huge contribution to the formation of modern theories of economic growth. The purpose of empirical research is to evaluate the impact of various factors on economic growth. It must be emphasized that it was the factor analysis of the sources of growth that led researchers to a completely new vision of the role and importance of man in the economy.

One of the most prominent researchers in measuring the contribution of various factors to economic growth is the American economist Edward Denison. He divided the factors that explain economic growth into two categories. In the first, he included physical factors of production (labor and capital), in the second, factors of growth of labor productivity.

To measure the influence of the human factor, Denison took into account not only the size of the workforce, but also the dependence of the return to labor on age and gender, level of education and professional training. To measure the capital factor, he also made some qualitative adjustments: housing, equipment, industrial buildings, inventories, foreign investment. Taking this into account, he then determined the contribution of each of these elements to economic growth.

The main feature of more modern empirical studies of economic growth (R. Barro, Sala and Martin, V. Popov, V. Palterovich) is the identification of such growth factors as improving the quality of human capital; efficiency of government institutions; favorable investment climate; flexible strategy of macroeconomic regulation; depth of economic reforms (share of non-state ownership in GDP, indicators of openness and liberalization of the economy); reduction of market distortions in resource allocation.

· Theory of endogenous economic growth

A new round in the development of the theory of economic growth occurred in the 80-90s, which made it possible to talk about the “new theory of growth”. It reflects the influence of imperfect competition and the role of possible changes in the rate of profit. And most importantly, scientific and technological progress (STP) began to be considered as an endogenous, i.e., a factor of economic growth generated by internal reasons. For the first time, in the formalized economic and mathematical models of American economists P. Romer and R. Lucas (USA), a hypothesis was put forward about the endogenous nature of the most important production and technical innovations based on investments in technological progress and human capital.

Theories of endogenous economic growth reject the neoclassical assumption of diminishing marginal productivity of capital, accept the possibility of economy-wide economies of scale, and often emphasize the impact of externalities on the return on investment. Positive externalities are the most important prerequisite. The significance of these effects is as follows:

• § external effects arise as a result of the training of workers in the process of production activities and contribute to the fact that technological progress acts as an internal factor in endogenous growth models;
• § externalities neutralize the decrease in the marginal product of capital, promoting long-term growth in per capita income;
• § external effects are manifested in the fact that the increasing returns from scientific and technological innovations accrue not only to those who carry them out, but also to the entire society.

In endogenous growth theories, technological progress is not the only possible cause of economic growth in the long run. The value of intensive and qualitative determinants in the theory of endogenous economic growth is determined using the following factors:

• · the quality of human capital depends on investments in human development (education, healthcare);
• · creating the necessary conditions and prerequisites for the protection of intellectual property rights in conditions of imperfect competition;
• · state support for the development of science and technology;
• · the role of the government in creating a favorable investment climate and borrowing new technologies.

So, the theories of endogenous growth made it possible to formalize the connection between the mechanisms of economic growth and the processes of obtaining and accumulating new knowledge, which is then materialized in technological innovations (Fig. 2). These theories explore the reasons for differences in the rates of economic growth of individual countries, the effectiveness of certain measures of state scientific, technical and industrial policy, and the influence of the processes of international integration and trade on the rate of economic growth.

Fig.2.

The essence of the theory of endogenous growth is precisely that man is the driving force of economic growth and the means of achieving material prosperity. The main conclusion of the new theories of endogenous growth is formulated as follows: the best strategy for increasing national income is the accumulation of not physical, but human capital, i.e. human development. Moreover, this statement is fundamental to the concept of human development. However, this thesis also clarifies the difference between the theory of endogenous growth and the concept of human development, the main postulate of which is that people are not just an effective means, but the goal of development.

Federal Agency for Education of the Russian Federation

Moscow State University

technology and management

Branch in Arkhangelsk

Faculty of Business Economics and Law

COURSE WORK

in the discipline "Economic Theory"

on the topic Economic growth, its factors and consequences. Theories of economic growth.

Student(s) of Siberian Federal District Course 1

Specialty 080502 Code 0038-7-09

FULL NAME. Pozdnyakova A.A.

Checked __________________

In. No._________________ Registration date _______________________

Test results _____________________________________________

Arkhangelsk

Introduction 3

1. The essence and rate of economic growth 5 1.1 Types of economic growth 7

1.2 Economic growth rates 11

2. Factors and indicators of economic growth 12

3. Economic growth indicators 15

4. Theories of economic growth 17 4.1 Neo-Keynesian growth model 17

4.2 Neoclassical growth model 21

5. The concept of economic growth from the perspective of today 23

Conclusion 29

References 31

Introduction:

At the end of the twentieth century, the problem of economic growth throughout the world was promoted to a number of priority problems of economic development. The fate of any country currently depends on the mechanism of economic growth, which allows the most effective use of the achievements of scientific and technological progress. World economic science began studying economic growth trends quite a long time ago. This topic is of particular relevance for the current stage of economic reforms. Economic growth has become a constant phenomenon that, despite some declines in output volumes and even a deep decline in production, the long-term development trend in the economies of most countries of the world is steadily upward. The main distinguishing feature of modern growth is the decline in the relative share of the agricultural sector in total output and employment. Another characteristic feature of modern economic growth is urbanization, as a consequence of the prosperity of industry.

Economic growth, as a rule, is understood as a change in the results of the functioning of the productive forces of society and consumed resources. Economic growth determines the nature of the functioning of the national economy.

Economic growth is defined and measured in two interrelated ways: as an increase in real GNP over a period of time, or as an increase in real GNP per capita over a period of time. Based on any of these definitions, economic growth is measured by the annual growth rate in %.

An increase in the social product per capita means an increase in the standard of living. The growth of the real product entails an increase in material abundance. A growing economy has a greater ability to meet new needs and solve socio-economic problems within the country and internationally.

Issues of economic growth have become particularly acute for the world community as a result of the emergence of a contradiction between the production of material goods and the uncontrolled depletion of natural resources, accompanied by environmental pollution. Thus, a new approach to understanding the essence of economic growth is important not only from the point of view of destroying the contradiction between production and consumption, but also from the point of view of the survival of mankind.

In modern conditions, the manifestation of the contradiction between production and consumption is expressed, first of all, in the irrationality of the development of production forces, accompanied by environmental pollution. Nature puts a limit to the unbridled growth of production. Further growth in production is thus hampered by consumption itself.

Today, economic growth is an important feature of the modern world. The population, the scale of production and employment, the national product, the standard of living are growing, free time from work is increasing - economic growth occurs.

1. The essence and pace of economic growth

Economic growth is accompanied by a number of quantitative and qualitative changes in society, among which the dominant position is occupied by the structural transformation of the economy. For countries that have embarked on the path of economic development, it is characteristic, first of all: industrialization, accompanied by a decrease in the share of agriculture in GDP (from 50-55% to 10-13%) and employment in agriculture (from 70-75% to 15 -18%), urbanization (from 10-15 to 65-70% of the population lives in cities), the spread of literacy, increasing levels of education (the share of those who have completed secondary education increases from 20-25% to 85-90%), life expectancy, demographic transition (a decrease in mortality, causing an increase in population growth rates and a further decrease in the birth rate, causing a decrease in population growth rates). The share of food products in total consumption is also decreasing, and the share of savings and government spending in GDP is gradually increasing.

In addition, there is a clear relationship between economic and socio-political development. Rapid economic development determines the transition to the democratic foundations of building a society, which is explained by an increase in the level of education, primarily the increase in citizens' access to information as a result of the development of means of communication, due to the acceleration of scientific and technological progress.

Such changes are usually called modernization. Swedish economist G. Myrthal identified the following principles of modernization:

1. Rationalism, meaning the replacement of traditional ways of thinking, methods of production, distribution and consumption with new methods and models in all spheres of social activity and people's lives.

2. Economic planning, i.e. choosing an economic policy that would be aimed at accelerated economic development.

3. Equality: ensuring more equal social and legal status, income and standard of living for all.

4. Changes in social institutions and consciousness. These are changes that are accompanied by an increase in labor productivity, stimulate competition and entrepreneurial initiative, and create equal opportunities for the realization of abilities.

Institutional changes include land reforms, the fight against monopolism, and changes in public administration. Modernization of social consciousness means the establishment of such ideals as hard work, efficiency, honesty, rationality, self-reliance and readiness for change.

Due to the modernization of the economy, the degree of influence of quantitative and qualitative variables on economic growth changes. Accordingly, there are several types of economic growth.

1.1 Types of economic growth

World economic history knows two types of economic growth:

The first type is extensive growth.

It is carried out due to a quantitative increase in factors of production while maintaining its previous economic basis.

With an extensive type of economic growth, if it is carried out in its pure form, production efficiency remains unchanged.

In a formalized form, this can be expressed as follows. As is known, the measure of economic growth is the growth rate γ t of real GDP for period t:

γ t = (γ t - γ t -1) / γ t -1

where γ t is the volume of GDP for period t;

γ t -1 – GDP volume for the previous period.

Then extensive growth can be expressed by the formula:

γ t / N t = const or γ t =N t,

where γ t is the increase in resource over period t,

N t – amount of resources used.

Extensive growth is a simpler type of economic growth. Its main advantage is that it provides the easiest way to increase the pace of economic development and allows one to build up the country’s economic potential relatively quickly and relatively cheaply. Extensive growth historically precedes intensive growth - each country has at one time passed or is currently passing along the path of extensive growth. Western countries, for example, completed their economic development along the extensive path, and switched to the intensive path in the first half of the 20th century. According to the Dutch economist J. Gintergen, in 1870–1914. the relationship between extensive and intensive growth factors was as follows.

table 2

Share of extensive and intensive factors in economic growth

Later, the American economist R. Solow found that from 1909 to 1949 in the United States, more than 80% of GDP growth was explained by technical progress, i.e. intensive factors, and not the costs of labor and capital.

The second type of economic growth is called intensive.

It occurs when GDP growth outpaces the growth in the number of economic resources employed

Intensive economic growth is a more complex type, since scientific and technological progress begins to play a decisive role in it. Consequently, it assumes a high level of development of productive forces, equipment, technology, a high educational and professional level of workers.

This type of economic growth provides an opportunity to overcome the problem of limited resources. That is, one of the most important sources of economic growth in this type is resource conservation, which costs society much less than the growth of resources.

Graphically, this can be expressed in the form of a diagram.

In real life, extensive and intensive types of economic growth do not exist separately in their pure form, but are combined with each other in a certain combination. Therefore, predominantly extensive or predominantly intensive types of economic growth are distinguished depending on the degree of predominance of one over the other.

The increasing role of scientific and technical progress in achieving economic growth has led to an increase in requirements for the amount of advanced capital, which business regards as an increase in business risks, because that part of the capital that had a long payback period increased. At the same time, economic growth based on scientific and technological progress promised such high incomes that large businesses took such a risk. As a result, economic growth has significantly increased the level of well-being of the population of developed industrial countries. Therefore, when characterizing the development of a market economy today, it is customary to point to its transition to a new quality of economic growth.

This means that economic growth

It is carried out mainly through the introduction of scientific and technological progress, the use of computer, resource-saving technologies;

To a greater extent than before, it is aimed at improving the quality of goods and services produced, which is driven by competition;

It has restrictions established by the government in order to preserve a healthy ecological environment for human life. Excess of economic growth beyond these limits is considered socially dangerous.

The transition to a new quality of economic growth was due to a level of production forces that ensured the filling of markets with goods, i.e. led to a state in which supply is able to completely cover and even block effective demand. Further expansion of production becomes impractical, and entrepreneurs in such a market only improve the quality characteristics of production and update the range. Thus, market saturation necessitated a transition from an extensive type of economic growth to an intensive one.

The transition to an intensive type of economic growth changes the role of types of economic growth as an indicator reflecting the dynamism of economic processes.

1.2 Economic growth rate

The rate of economic growth directly depends on the type of economic growth. When switching to the intensive type, the pace may even decrease slightly compared to the extensive type of growth. However, this does not mean a decline in economic development or its slowdown. With the extensive type of growth, the economy maintained its proportions, its structural characteristics and developed in breadth. In conditions of an intensive type of growth, the economy acquires dynamism not only due to the expansion of production, but also due to progressive structural restructuring. Solving such a dual task makes it much more difficult to increase the pace. In addition, in a saturated market, increasing the pace is not always advisable.

Development in this case is carried out by improving technology. This becomes inevitable due to the fact that production becomes obsolete in a shorter period of time, and new resources are directed to it with a new level of efficiency and quality.

2. Factors and indicators of economic growth

An economy's ability to grow depends on a number of factors that determine the rate and magnitude of long-term increases in real output, the ability to improve efficiency, and the quality of growth.

Based on the way they influence economic growth, a distinction is made between direct and indirect factors.

Direct factors are those that make growth physically possible. This is a group of supply factors, it includes:

· quantity and quality of labor resources;

· quantity and quality of natural resources;

· volume of fixed capital;

· technology and organization of production;

· level of development of entrepreneurial abilities in society.

Indirect factors are conditions that allow society to realize its opportunities for economic growth. Such conditions are created by demand and distribution factors:

Reducing the degree of market monopolization;

Tax climate in the economy;

The efficiency of the credit and banking system;

Growth in consumer, investment and government spending;

Expansion of export supplies;

Possibilities for redistribution of production resources in the economy;

The current income distribution system.

Demand factors limit supply factors, i.e. its size and structure. If demand is small, then expanding production is not economically feasible.

The combination between supply and demand factors depends on the distribution factors. Each of the factors is constantly changing depending on other factors, as well as on the socio-economic development of society. The degree to which each factor of production is used to create GDP is reflected in the production function.

A production function is a mathematical expression of the dependence of the participation or influence of one or another factor of production on the increase in output, taking into account the existing level of development and use of technology.

The mathematical representation of the production function is:

General – x = F (a 1 , a 2 ,…..a n)

provided that dF/da 1 ; dF/da 2….dF/da n – marginal productivity of factors (a 1, a 2,…a n) – ‘this is a function of equilibrium output.

The production function in the general sense allows us to obtain many production combinations, making it possible to find certain expressions of product output depending on the selected factors.

In a particular sense, it reflects the relationship between the factors of production necessary for extensive economic growth; this is the relationship between labor, land and capital.

y = φ(L, N, K),

where φ – denotes the nature of the function

y – designation of production volume,

N – earth,

K – capital.

Contribution of the main factors of production to GDP growth for the period 1929 – 1982 according to the calculations of the American economist E. Denison, the picture is as follows:

Table 3

Contribution of economic growth factors to its growth

3. Economic growth indicators

Economic growth as a phenomenon must have indicators by which it can be measured. Indicators of the results of the functioning of the national economy act as general indicators of economic growth.

Gross Domestic Product (GDP).

Gross National Product (GNP).

These indicators form the System of National Accounts (SNA), which is an economic information system used throughout the world to describe and analyze economic activity at the macro level.

The overarching measure of economic growth and the best indicator of the health of the economy is GDP and GNP.

Gross domestic product (GDP) characterizes the value of final goods and services in final buyer prices, created within the geographical boundaries of a given country, regardless of the nationality of economic resources.

Gross national product is also characterized by the value of final goods and services at the prices of the final buyer, but only created with the help of resources owned by a given country, regardless of their geographical use.

Since the nature of the products produced in the national economy is extremely diverse, the only way to sum up the value of the benefits realized is to add them up in monetary terms. GDP is a monetary indicator.

The value of GDP does not include:

Government transfer payments: pensions, scholarships, benefits and other types of payments that are not accompanied by the creation of any product and are a form of redistribution of available financial resources;

Purchase and sale of securities on the stock market;

Resale of used goods.

GDP can be calculated in two ways: through expenses and through income. As in the balance sheet, in the SNA the expenditure side must be equal to the income side, i.e.

C + I + G ± X n = GDP = C + S + P + R +i + T + A.

The left side of the identity, consumable, consists of the following components:

C – household consumer expenses, excluding expenses for housing construction, because this is not included in investment costs;

I – investment expenses of firms, i.e. from the costs of purchasing machinery, equipment, raw materials, construction;

G – government expenditures on the purchase of goods, services and investments;

X n – foreign trade balance, i.e. difference between export and import. If exports are greater than imports, then X n > 0, if vice versa, then X n< 0.

The income, right side of the identity, consists of:

C + S – income of the population in the form of wages and from independent activity, which goes towards consumption (C) and savings (S);

P – corporate profit;

R – income in the form of rent;

i – interest rate on savings;

T – taxes on business activities;

A – depreciation charges.

4. Theory of economic growth.

The two main directions of development of economic theory of the twentieth century - the neoclassical and Keynesian directions - approach this topic differently. The origins of the neoclassical approach should be sought in J.-B. Say, in his classification of factors of production. The main idea that unites all neoclassical economists is the hope for the efficiency of the market system, which is considered as a perfect self-regulating mechanism that allows for the best use of all factors of production.

4.1 Neo-Keynesian growth model

Neo-Keynesian models of economic growth. Like any model, growth models are an abstract, simplified expression of a real economic process in the form of equations or graphs. Keynesian theory of macroeconomic equilibrium is based on efficient demand, which ensures balanced economic growth. Most growth models assume that an increase in the real volume of output occurs, first of all, under the influence of the main factors of production - labor (L) and capital (K), and their quantity is constant.

Neo-Keynesian growth models use mainly logical tools. An important and strategic variable through which economic growth can be managed is investment. Within the framework of the centralized planning system, the concept of “gross capital investments”, which meant all the costs of reproduction of fixed assets, including the costs of their repair. Investment is a broader concept. It covers both so-called real investments and “financial” investments, i.e. investing in shares, bonds, and other securities that directly give ownership rights and the right to receive income from owning property. In this case, the specific use of financial investments can be carried out both through stock trading on the securities market and through direct investments in shares of enterprises in various sectors of material production. Investments are a very important component of total expenses. Fluctuations in investment have a significant impact on economic growth. The dynamics and size of investments depend mainly on two factors: the expected net profit from the investment and the interest rate for the loan. Also, the amount of investment in the economy depends on the level of interest rates. Moreover, it is the real interest rate, taking into account the level of inflation, that has a decisive impact on the volume of investment expenses. The state, pursuing a certain monetary policy, through changes in the interest rate can have a serious impact on the growth of total investment costs, and therefore on economic growth.

The neo-Keynesian concept of economic growth is based on a fairly simple model, the basic principles of which were formulated by E. Domar, proposed in the late 40s of the twentieth century. The production technology is represented in it by the Leontief production function with constant marginal productivity of capital. Domar's model assumes that there is excess supply in the labor market, which causes a constant price level. E. Domar, in accordance with the tradition of Keynes, pays special attention to stimulating investment. He believes that if the savings rate cannot be changed quickly, higher levels of income and employment can be achieved through increased investment. Based on this, it can be understood that Domar emphasizes the importance of various investment promotion plans in terms of tax benefits for increasing profits, accelerated depreciation, etc. Domar also views investments as a “cure” for unemployment. Output actually depends on one resource – capital. A factor in increasing demand and supply in the economy is an increase in investment

According to Domar's theory, there is an equilibrium rate of growth of real income in the economy at which the available production capacity is fully used. It is directly proportional to the saving rate and the marginal productivity of capital. Investments and income grow at the same constant rate over time. Domar's model did not claim to be a growth theory. This was an attempt to extend the conditions of short-term Keynesian equilibrium over a longer period and find out what these conditions would be for a developing system.

R.F. Harrod built a special model of economic growth (1939), including an endogenous investment function (in contrast to Domar's exogenous occupied investment) based on the accelerator principle and the expectations of entrepreneurs.

According to the accelerator principle, any increase (decrease) in income causes an increase (reduction) in investment proportional to the change in income. If the supply growth rate actually planned by entrepreneurs differs from the guaranteed growth rate, then the system gradually moves away from the equilibrium state. The ideal development of the economic system is achieved when the guaranteed, natural and actual growth rates are equal under conditions of full employment of resources.

Both models lead to the conclusion that, given the technical conditions of production, the rate of economic growth is determined by the value of the marginal propensity to save, and dynamic equilibrium can exist under conditions of underemployment. In essence, both models are similar, and they are usually called the Harrod-Domar model. Also in this model, the economy is considered as one industry producing homogeneous products. The rate of population growth is determined by non-economic factors. The source of financing for the increase in new capacity is the share of national income intended for savings. Sustainable rates of production growth depend on population growth, increased labor productivity and the size of accumulated capital. The rate of economic growth in this general model ultimately depends on the share of accumulation in national income and the capital intensity of production.

The authors introduce the concept of “natural rate of growth,” which assumes a rate of production growth that corresponds to all the possibilities of technical progress and the full use of the entire labor force. The natural rate of growth ensures the “optimal well-being” of society.

Hansen's theory. Another fairly well-known theory of economic growth belongs to the American economist Hansen. He focuses on the dynamic theory of the cycle. This economist, who is often called the “American Keynes,” proposes to stimulate effective demand, primarily through the state budget. The strategic direction of the state's economic policy should be not only the maintenance of investment activity of private capital, but also the expansion of public investment and public spending.

Hansen, among other things, created the theory of stagnation, thus recognizing the possibility of serious economic crises. Economists of all directions and schools are convinced that economic growth is necessary to increase the level of material well-being. Based on various theoretical approaches, many economic policy options for promoting economic growth can be developed. There are also negative consequences of economic growth. One English economist said that “economic progress may cause us to lose much of what attracts us to the world around us.”

4.2 Neoclassical growth model.

The neoclassical direction in the development of economic growth theory arose as a reaction to the weaknesses of the Keynesian model. The Keynesian and neoclassical models have similarities in the main goal (equality of actual growth rates to potential or natural ones); the approaches and methods of studying this problem have radically changed. Neoclassical models take into account not one, but several factors that determine economic growth. The presence of many factors and the possibility of combining them allows one to build a large number of models. A major contribution to the development of models of economic growth based on production functions, in particular the Cobb-Douglas function, was made by R. Solow, E. Denison and J. Mead.

Model R. Solow.

R. Solow substantiated the idea that scientific and technical progress is a leading factor in economic growth. R. Solow Professor at the Massachusetts Institute of Technology. The Solow model allows us to express the most important processes and results of economic growth. R. Solow showed that the instability of dynamic equilibrium in Keynesian models was a consequence of the non-interchangeability of production factors. Instead of Leontief functions, he used the Cobb–Douglas production function in his model.

Other prerequisites for analysis in the Solow model are: diminishing marginal productivity of capital, constant returns to scale, constant retirement rate, absence of investment lags. The interchangeability of factors is explained not only by technological conditions, but also by the neoclassical premise of perfect competition in factor markets.

A necessary condition for the equilibrium of an economic system is the equality of aggregate demand and supply. Aggregate demand in the Solow model is determined by investment and consumption.

The dynamics of output volume depends on the volume of capital. The volume of capital changes under the influence of investment and disposal: investment increases the capital stock, disposal decreases it. The level of capital stock at which investment is equal to disposal (k=0) is called the equilibrium level of capital-labor ratio.

Since equilibrium economic growth is compatible with different saving rates, the problem of choosing the optimal saving rate arises.

5. The concept of economic growth from today's perspective

The low quality of Russia's economic growth is confirmed by the indicators of various ratings. For example, in the ranking of economic freedom, Russia in 2009 moved from 114th to 124th place (Indonesia and Cameroon have similar positions). A similar situation is developing with the competitiveness rating of the World Economic Forum, where Russia dropped from 70 to 75 place in terms of competitiveness growth, and in terms of business competitiveness rating - from 61 to 74 places.

The modern model of growth of the domestic economy has a clear export-raw materials orientation in the context of increasing imports of consumer and investment goods. Thus, the contribution of the foreign economic component to GDP growth, according to various estimates, ranges from 40 to 45%. The compensatory nature of Russia's economic growth is due to the involvement in production of resources released during a decline in production (including reserve capacity, relatively cheap labor), and is also the result of the favorable action of external factors (high price conditions for leading Russian export goods, increased investment activity). A kind of “adaptation” of the economic system occurs in response to favorable external and internal conditions. In these conditions, government growth stimulation is based on the use of the country’s absolute (natural resources, reserves of idle capacity) advantages, which make it possible to achieve positive results of economic dynamics at “relatively low” costs, but in the short term.

The key prerequisites for the growth of the Russian economy include rich reserves of natural resources, a fairly high general educational level of the population, access of the country's industry to relatively cheap energy resources, the presence of basic market institutions (private property, monetary, fiscal systems, etc.). Among the internal limitations of Russia's economic growth, the following are of particular relevance: the low level of technological development of the economy, a significant amount of outdated production assets, insufficient funding for the innovation sector, the ineffective operation of the Russian banking system in a number of areas, the low level of development of the stock market, significant interregional asymmetry of economic and social indicators and other. Among the external ones are the intensification of international competition, the successes of a number of developed countries in moving towards a post-industrial society, accompanied by an objective increase in the dependence of developing countries on them, as well as a widening gap in the levels of socio-economic development between them.

Currently, the quantitative side of economic growth is mainly ensured. An assessment of the qualitative characteristics of growth indicates the absence of a well-developed policy in this direction, which in turn would be based on a long-term development strategy. Current growth is not promising and sustainable in the long term. In domestic conditions, the importance of innovation and investment factors is underestimated. Schematically, the relationship between the factors of economic growth that have developed at this stage of development of the domestic economy is as follows.

In contrast to the trends in the development of economic dynamics in Russia, the predominant type of economic growth in developed countries is intensive, driven by savings and increased efficiency in the use of all types of resources (natural, labor, investment). The concentration of resources in the educational sphere, the growing role of R&D and high-tech industries are key factors in accelerating economic growth on an innovation basis. The existing natural, scientific and “human” potential, as well as the tasks of catching-up development and sustainable growth, predetermine the construction of a socially oriented innovation-type system in Russia. It seems that from the standpoint of realizing this goal, state policy should be developed, containing specific directions and measures of state stimulation of the growth of the domestic economy.

In almost no country in the world does diversification of social production occur without targeted and systematic government support. And even if a civilized institutional and legal environment has been formed in the country, economic modernization conducive to competition does not occur on its own, without an active state investment and innovation strategy. In Russian conditions, in order to create the preconditions for sustainable economic growth on a post-industrial basis, the only reasonable solution is to carry out structural reforms and adequate macroeconomic policies.

At the present stage of development of the Russian economy, state policy retains elements of different approaches to achieving high rates of economic growth: liberal (administrative, tax, budget reforms) and dirigiste (formation of public-private partnership mechanisms, direct participation of the state in the development and implementation of specific economic policy instruments, such such as special economic zones, concessions, investment fund and others). These approaches formed the basis for the development of a program for the socio-economic development of Russia for the medium term.

It should be noted that in Russia there is a gradual change in national development priorities. Quantitative targets for economic growth (doubling GDP) are being replaced by qualitative changes in growth, its mechanisms and structural priorities. In these conditions, the tools for ensuring high growth rates include improving the institutional conditions for economic development, intensifying the role of the state in the economic system, forming public-private partnerships, and ensuring macroeconomic stability in general.

The practice of market reform in Russia has led to an unreasonable reduction in the role of the state in the sphere of economic regulation. A number of official documents reflecting the directions and priorities of the country’s socio-economic development indicate that state intervention in the economy distorts competition and moves away from the main task - building an effective economy. At the same time, world experience proves that economic modernization does not occur without an active state investment and scientific and technical policy. Moreover, this approach is in conflict with the authorities’ intentions to create an “effective” state (a socially oriented market economy).

Analysis of the modern strategy for stimulating growth has revealed some limitations of its implementation in practice. First of all, the threats associated with the crisis of fixed and human capital have not been thoroughly and systematically studied. This limitation is partly due to the lack of effective practical tools aimed at overcoming the raw materials and energy orientation of the Russian economy, as well as measures that contribute to the development of the national innovation system and the activation of the investment process.

In contrast to the goals and tools officially defined in the medium-term development program, the long-term development strategy of Russia (until 2010), and Presidential Addresses, the actual tools for stimulating growth depend on the situation in the global oil market. The accelerated solution to the problem of ensuring high rates of current economic growth leads to the fact that special attention is paid not so much to long-term and effective projects, but to projects that are at a high stage of readiness for practical implementation, as well as those projects that will ensure high rates of economic dynamics in the shortest possible time .

A barrier to the use of government regulation instruments is the insufficient development of political and legal institutions, as well as the multidirectionality of interests and operational goals, and the lack of trust between participants in economic life - households, firms and the state.

In general, the modern strategy for stimulating growth seems “unsustainable” due to the ineffectiveness of institutions that ensure law and order, the ambiguity of economic ties between government and business, underfunding of long-term promising projects in the field of science, education, etc.

As the experience of the most developed countries shows, an adequate economic growth policy is developed based on a number of provisions. Firstly, sustainable and high rates of economic growth should, first of all, be oriented towards the long term and reflect the strategic decisions of the authorities in this area. Secondly, sustainable growth is accompanied by structural changes that reflect current development trends. For Russia, this may in particular mean: diversification of the economy, weakening dependence on the fuel and energy complex, and development of sectors of the post-industrial economy. In addition, Russia's economic problems also concern reforms that go beyond the economic sphere, primarily the judicial and law enforcement systems. Thirdly, the required pace and quality of growth are determined by the need to reduce the gap in the level of socio-economic development between Russia and developed countries. Fourthly, one should take into account the quality of not only growth, but also the actual tools and measures of the strategy and policy being developed in this direction. The implementation of any economic policy measures should not undermine the achieved level of macroeconomic stability. Finally, the key factor in economic growth of a “new quality” is investment in the development of human capital, which creates the prerequisites for the constant adaptation of the economic system to unpredictable changes in scientific and technical progress and promising areas of innovative development.

Thus, the main priorities of state stimulation of economic growth within the framework of the “post-industrial breakthrough” of Russia should be in the plane of solving problems of intensifying the role of the state in the economy, increasing investment in fixed and human capital, modernizing and diversifying the structure of the economy, scientific and technological development, forming an effective innovation system, ensuring the realization of the interests of all participants in the innovation process (both the state and investors, consumers and producers of scientific “products”); creating conditions that increase the efficiency of institutional factors (administrative barriers, protection of property rights); development and implementation of large-scale national projects (with the involvement of budgetary and private funds) in the areas of education, healthcare, housing construction (mortgage development), and agricultural production. At the same time, the Russian economy requires, first of all, an “effective state”, and not a “strong” or “weak” one. The priority direction of government spending is investments in the development of human capital (education, science, healthcare), as well as industries that ensure the sustainable functioning of the institutional environment.

Conclusion

Now economic growth is the main goal of Russian policy. For more than 10 years, production did not develop due to lack of investment, and fixed capital was consumed.

It is economic growth that can provide the resources necessary to solve social and demographic problems. This will allow Russia to raise the prestige of the state and strengthen its position in the world community.

At present, persistent structural deformations remain the main brake on economic growth. The big problem is the non-market sector, a collection of ineffective enterprises. According to a survey conducted by the State University - Higher School of Economics, in industry from a sample of about 1000 enterprises in 1999, 4.2% (2.2% in terms of the number of employees) produced negative added value, and, therefore, could only exist for account of direct or indirect subsidies. If we take a combination of 2 signs - negative added value and overdue accounts payable for more than 18 months of product sales, then the share of such enterprises will be 31.2% (23.3% in terms of the number of employees).

All enterprises in the non-market sector are united by the fact that in order to continue their existence they receive subsidies (especially housing and communal services), the source of which is the budget system, or natural monopolies that provide their services at reduced prices. This leads to the persistence of uncompetitive production and depresses the incentives for technical progress. This leads to a paradoxical situation: the state finances unprofitable enterprises, instead of investing in dynamically developing ones.

This situation in the recent past could be explained by the danger of social cataclysms with the rapid closure of unprofitable industries and the explosive growth of unemployment. But today, as practice shows, the process of releasing workers from ineffective enterprises is largely completed.

Naturally, the economic situation affects the living standards of the population. It is divided into two unequal parts. The standard of living of a smaller part of it - approximately 8 to 12 million people employed in successful campaigns, in the banking sector, and trade - is approaching Western standards. They earn high enough incomes to afford to pay for everything. The living conditions of the majority of the population are almost the same as in Soviet times: numerous benefits and subsidies (housing, energy, gas, water, education, healthcare, etc.), low cash incomes, and correspondingly low effective demand. Hence the lack of incentives for modernization and production growth in the domestic market.

Such a deformed structure of the economy, in which at least 1/3 is a non-market sector, where an unbalanced price system persistently counteracts economic growth. To eliminate this deformation, it is recommended to increase prices for the products of natural monopolies. In the same way, benefits and subsidies should be replaced by an increase in the monetary income of the population with an expansion of the field of consumer choice for them.

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The assumptions of the Harrod model remain the same as those of the Domar model.

As is known, economic growth means long-term sustainable development of the economy - the process of increasing national income and gross domestic product in the long term without disturbing the equilibrium state of the economy. Modern economic growth is a development in which long-term production growth rates consistently exceed population growth rates.

Factors of economic growth are phenomena and processes that determine the rate, scale and qualitative characteristics of the increase in the real volume of national production. Factors of economic growth are classified according to various criteria.

In accordance with the identification of types of economic growth, its factors are divided into two groups: extensive and intensive. Extensive factors of economic growth include an increase in capital and labor costs, intensive factors include scientific and technological progress, improving the quality of human capital, improving the management system, etc.

Economic growth always appears as a result of the action of economic and non-economic factors. Economic factors include increasing the quantity and improving the quality of resources used; non-economic factors include military-political, geographic, climatic, national, cultural, etc.

According to the method of influencing the process of economic growth, a distinction is made between direct and indirect factors. Direct factors include changes in the quantity and improvement in the quality of labor, natural and capital resources used; improvement of technology and production organization; level of entrepreneurial activity of the population. Indirect factors include prices for resources, the degree of monopolization of markets, the nature of income distribution in society, the taxation system and the credit and financial system, the volume of effective demand, etc.

Indicators of economic growth are divided into quantitative and qualitative. The main quantitative indicators are indicators of absolute growth or growth rates of real output in general and per capita.

The dynamics and growth rates of real GDP characterize the overall scale of the national economy, the change in its share in the world economic system: ∆GDP = GDPt - GDPt-1, Tr = ∆GDPt / GDPt-1, where t is the time index.

The ratio of real GDP to population size - GDP per capita - gives an idea of ​​both the rate of economic growth and the change in the well-being of the population in this regard. Information on the dynamics of production per capita is used to characterize the standard of living and compare it with the standard of living in other countries.

In addition to general quantitative indicators of economic growth (GDP and GDP per capita), a number of private indicators are used.

Labor productivity in general is characterized by the ratio of the volume of products produced and the costs of labor resources. It is measured by the ratio of output (on a national scale - national income) to the cost of living labor.

The labor intensity of products is an indicator inverse to labor productivity. Labor intensity is the cost of working time to produce a unit of product.

Capital productivity is the ratio of the manufactured product to capital expenditures.

The capital intensity of products is an indicator inverse to capital productivity. Capital intensity is a ratio showing how much additional capital is needed to produce a unit of output.

In addition to quantitative ones, qualitative indicators of economic growth are also used, characterizing its social orientation: indicators of the dynamics of the population’s free time, the degree of social protection of the population, the development of social infrastructure, the growth of investments in human capital, etc.

It should be noted that in pre-industrial and industrial societies the main source of economic development was material factors. The formation and development of post-industrial society is based on human capital. According to the calculations of American economists, in 1890, 50% of GDP came from raw materials. After 100 years, their share did not exceed 10% - factors related to human capital took the leading place. In modern conditions, in any field of economic activity, human capital is the main factor of economic growth, competitiveness and efficiency.

Theories of economic growth are theories that study the relationship and interdependence of key macroeconomic indicators and economic growth rates. The authors of these theories in their various versions tried to find sources of economic growth, solve the problems of potential and sustainable economic growth, and determine the conditions for achieving long-term dynamic equilibrium. The main thing in these models is to find ways to achieve the goal of optimal growth.

The main theories of economic growth are:

Keynesian models of dynamic equilibrium: the Harrod and Domar model.

Neoclassical model of economic growth: Cobb-Douglas production function.

Economic-mathematical model of the inter-industry balance “input - output” by V. Leontiev.

The concept of “zero economic growth”.

In theories economic growth Problems macroeconomic equilibrium are considered not in a static, but in a dynamic form and in long term. The main question here is: how can you increase the volume? gross domestic product(or national income) in conditions full employment?

Multiplier-accelerator concept

There are several approaches to analyzing economic growth. In particular, the concept of interaction animator And accelerator reveals the mechanism of economic growth. However, this does not exhaust the analysis of this problem.

Western theories of economic growth are strenuously seeking an answer to the question of what is the share of each production factor in increasing production output, in increasing income received. Solving this problem is important for finding the optimal combination of production factors that ensure an increase in the rate of economic growth.

Production function

The production function is used as a tool for such analysis:

Y = f(K, L, N),

The simplest production function examines the impact on the growth of output of two factors: labor And capital. It was developed in the 20s of the twentieth century. American economist P. Douglas and mathematician C. Cobb, who, based on statistics from US wheat production, concluded that a 1% increase in labor input expands output three times more than a 1% increase in capital. The results of this empirical study suggested to the entrepreneur that improvements in the use of such factors as labor are preferable to attracting additional capital. In this regard, in developed countries market economy Developments that increase the effectiveness of work motivation have begun to be widely used. Theories of human relations and social partnership appear, the purpose of which is to ensure higher returns from the use of the human factor.

“Human capital” as a factor of economic growth

In the last quarter of the twentieth century. this perception was constantly strengthened. Competition in a dense market, the need to constantly improve product quality, update production and assortment dictated. At the same time, the employee’s ability to make non-standard solutions, to search for new things, and adaptability to constantly changing production conditions was increasingly valued. Only an employee who meets these requirements is able to contribute to ensuring a stable position of products on the market, and thereby to the growth of income from its sales. In modern industrialized countries, the qualifications of workers are becoming a key factor in competition. Investments in labor (education, social programs, etc.) are considered the most effective, or, in Western terminology, investments in human capital. It is precisely these costs that are capable of using long-term factors of economic growth based on NTP, since a skilled workforce has the ability to improve.

Economists have turned to the study of the problem of “human capital” since the early 60s. The concept is introduced investment in “human capital”, meaning the totality of direct monetary costs for education and income lost for the time spent on education.

Economists have proven that education is profitable for an individual if real price costs for education and profit are positive. To the extent that salary reflects the real products of labor, investments in “human capital” are real investments. According to estimates, in the United States, 2/3 of all accumulated capital is invested in “human capital”, namely in educational institutions, scientific, research programs and centers, training of specialists and professionals.

Job G. Becker“Human Capital: A Theoretical and Empirical Analysis” was recognized in 1964 by the Royal Swedish Academy of Sciences as the most significant contribution to modern economics. Becker distinguished between general education and special education. In his opinion, general education improves the overall skill of the individual, i.e. his ultimate performance. However, an individual entrepreneur pays for this public good without guarantees of obtaining the proper result in a specific job and is not interested in paying for the general education of citizens and workers. But any entrepreneur has a direct interest in special training of employees, since this ultimately leads to increased productivity in a particular business.

Becker applied the theory of "human capital" to the problem of inequality income. If a particular individual invests in his education, this subsequently leads to the evolution of his opportunities for obtaining large incomes. He explored the quantitative relationship between abilities and education, distinguished between “human capital” in general and specific “human capital” companies. It is interesting that Becker argues that the greater mobility of young workers is not due to traditional psychological factors, but to the fact that older workers have less time to profit from movement, while younger workers have much more time.

In the course of his research, Becker developed the “human capital” approach into a general theory that determines the distribution of labor income. He views the behavior of individuals in this area as rational: before deciding whether to continue education or not, the individual weighs all the benefits and costs. Like any entrepreneur, an individual compares the expected marginal rate of return on investments in education with the profitability of alternative types of investment. The conclusions of the theory, taking into account the wage structure, were formulated in the so-called “wage - human capital” functions, which reflect the relationship between wages and human capital.

G. Becker were bred demand curves And offers investments in “human capital” and a universal model for the distribution of personal income was created. Demand curves for human capital ( D And D 1 ) are located at different levels, which is associated with the unequal natural abilities of individuals, and supply curves ( S And S 1 ) reflect their unequal financial capabilities (Figure 6.1). “Human capital” will be distributed unevenly - depending on individual curves. The greatest unevenness is observed in the case when more capable individuals also have greater financial possibilities.

Rice. 6.1. Demand, supply and equilibrium in the human capital market:

I - investments in human capital; Q - number of human capital

This model explains the inequality of individuals associated not only with labor (income), but also with property (property). In the case of initially large opportunities for investing in “human capital”, initially the income from such investments is greater than from investments in physical capital, but with further growth of investments the return decreases. Thus, at a certain stage, one should switch from investing in “human capital” to investing in other assets so that subsequent generations can use such assets for their education.

Based on statistical data, Becker calculated that the return on investment in human capital in terms of higher education is 10–15%.

Becker was the first to introduce the distinction between general and specific investments in human capital. By general investment he understands the acquisition of knowledge and skills, which the individual can then use at any place of work, so these investments are made by the individual himself. Specific investments are, as a rule, investments of each specific company to train an employee in something that he cannot use anywhere else except for this company (for example, the procedure for internal document flow). This difference formed the basis for the development of a new theory of the firm by O. Williamson.

The concept of “human capital”, proposed by G. Becker, subsequently received a powerful impetus in its development in connection with research J. Akerlof. He proposed a theory of deteriorating market selection resulting from the asymmetric distribution of information between economic entities. Thus, it was demonstrated that the value of “human capital” is that additional market signal for the employer, which partially eliminates the asymmetry in the distribution of information between him and the employee that arises when the latter is employed in the form of the so-called “pig in a poke” problem.

The theory of “human capital” was subsequently subjected to serious empirical testing. Many economists, based on a large amount of statistical information, tried to verify Becker’s hypothesis about the positive functional relationship between investments in “human capital” and the return on these investments. The task turned out to be quite difficult. For the American economy, empirical relationships have been identified between a person’s length of education over his entire life cycle and average per capita income for each period of his age. As a result, it was possible to find out that the average per capita income not only directly depends on the duration of the employee’s training, but, more importantly, the growth of income outpaces the growth of the duration of training itself. Moreover, the more time a person spends on acquiring additional knowledge, skills, abilities and reputation, the more pronounced this trend is (Fig. 6.2).

Rice. 6.2. Dependence of the average per capita income for individual age intervals on the duration of education

Accepted as basic income person with incomplete secondary education (curve A). Already with an increase in the duration of education by 1.15 times, the average per capita income increases in the peak years (age 40–55 years) by 1.5 times (curve B). A further increase in the duration of education by 1.7 times leads to an increase in the maximum value of average per capita income by more than 2.3 times (curve WITH). And finally, an increase in the duration of training compared to the base level by 2.14 times and 2.42 times leads to an increase in “peak” income by 3.5 times, respectively (curve D) and 4 times (curve E). It should also be noted that for people who have received a more serious and high-quality education, along with the growth of their “peak” income at working age, the average amount of annuities (annual payments) that they receive after retirement also increases.

Harrod-Domar model of economic growth

Based on the Keynesian model of macroeconomic equilibrium, in short term savings are equal to investments, but in the long term they do not coincide. Economists - English R.F. Harrod and American E.D. Domar- at the same time proposed a model for analyzing economic growth in long term within the framework of Keynesian views (currently it is known as the Harrod-Domar model):

G=s:c,

From this model it can be concluded that growth rates are directly dependent on s, since the more clean saving, the more they can be investments; growth rates are inversely related to c- coefficient capital intensity: the higher it is, the lower the rate of economic growth.

Can be calculated s And c From statistical data, therefore, using the Harrod-Domar model, it is possible with a certain degree of probability to predict future rates of economic growth. However, it has too high a degree aggregation of indicators to serve as a precision instrument. Rather, it is a useful theoretical analysis tool for economic policy development.

The researchers noticed another drawback of this model. According to the assumptions, the growth rate that ensures full capacity utilization is determined by one group of factors, and the growth rate that ensures full time, - others. Their coincidence is a rare case, and the model does not provide for it. Factor substitution "work" And "capital" not expected. The economy in the Harrod-Domar model balances on a knife edge. The challenge of creating sustainable growth rates lies outside this model.

Neoclassical Solow model of economic growth

The considered theory received its further development and improvement in the neoclassical factor model of economic growth Roberta Solow, which already implies replacement factors of production, as their relative prices change. According to Solow, investment and savings are determined not by the rate of economic growth, but by the relationship between the factors capital - labor and the volume of production per capita.

Solow took a simple production function as the basis for his model, introducing into it the level of technology development ( T):

Y = Тf(K, L).

Based on his approach and data on the development of the American economy for 1909–1949. Solow determined that more than 80% of the growth in output per man-hour worked is explained by scientific and technological progress.

Thus, if in the Harrod-Domar model NTP acts as a factor external to economic growth (exogenous), then in the Solow model it is considered as an internal (endogenous) factor organically inherent in modern economic development. This corresponds to the fact that it is scientific and technical progress that is the main factor of economic growth in the long term.

Follower of Solow - American economist E. Denison, using data for 1929–1982, made a detailed breakdown of scientific and technical progress into individual components and identified the components of economic growth. E. Denison pointed out the importance of the process of accumulating knowledge, which provides almost 2/3 of the contribution of technical progress to production. The remaining 1/3 of this contribution is due to more efficient placement resources and, in addition, with savings in production factors per unit of output. Such savings when increasing the scale of production are also ensured by scientific and technological progress (Table 6.1).

Table 6.1

Factors in US National Income Growth (1929–1982)

Conclusions drawn from empirical research allow us to determine the most effective factor of production. The concepts of growth and progress are associated not only with the need to replenish the material and material basis of production, but increasingly with the accumulation of knowledge, improving the skills of workers, without which the introduction of scientific and technical progress is impossible.

Phelps' Golden Rule of Capital Accumulation

The Solow model was used by economists to answer the question: what should be the optimal economic growth? American economist Edmund Phelps answered this question in his work “A Fable for Those Dealing with Economic Growth,” in which he examined the economic problems of his invented kingdom of Nightingale (named Solow). Phelps formulated the so-called “golden rule of capital accumulation.” Its essence is that each generation must save for future generations such a share of the income that it received from previous ones. In other words, interest rate must be equal to the population growth rate. In this case, the trajectory of economic growth will be optimal. Sometimes the “golden rule” is called the “biological interest rate” rule.