Economic system. Changes in economic situation of Russia

Economic system. Changes in economic situation of Russia

Московский Государственный Университет
Приборостроения и Информатики

реферат по английскому языку на
тему:

«Экономическая система.
Изменение экономической

ситуации в России
»

Economic system. Changes in economic situation of Russia

Выполнил студент
1-го курса:

спец.080801

гр. МФ ЭФ2-06-01
ДО

Князев В.В.

Проверила:

Манишова В.Д.

Можайск, 2007.


« Economic system. Changes in
economic situation of Russia »

 

 

 

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 economic
situation in Russia………………………………………. 7

      4.1. Recent economic
developments……………………………………………… 7


1. Economic
system

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

1.1 The division of
economic systems

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

There is often a strong correlation between certain political systems and
certain economic systems (for example, consider the meanings of the term "communism"). Many
economic systems overlap each other in various areas (for example, the term
"mixed economy"
can be argued to include elements from various systems). There are also various
mutually exclusive hierarchical categorizations.

The basic
and general economic systems are:

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

·  
Mixed economy (a
compromise economic system that incorporates some aspects of the market
approach as well as some aspects of the planned approach).

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

·  
Traditional
economy (a generic term for the oldest and traditional economic
systems)

·  
Participatory economics (a recent proposal for a new economic
system)

An economic system can be considered a part of the social system and go
home hierarchically equal to the cultural system, etc.

 

 

 

2. List by hands-on
and hands-off

Typically, "hands-on" economic systems
involve a greater role for society
and/or the government to
determine what gets produced, how it gets produced, and who gets the produced goods
and services, with the
stated aim of ensuring social
justice and a more equitable distribution of 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, and
often limit government involvement in the economy.

The primary concern of "hands-on" economic
systems is usually egalitarianism,
while the primary concern of "hands-off" economic systems is usually Libertarians target
individual economic
freedom as a primary goal of their "hands-off" policies.

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

3. Types of economic systems

                                                               
3.1. Market economy

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

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

3.2. Mixed
economy

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

There is not one single definition for a mixed
economy, but relevant aspects include: a degree of private economic freedom
(including privately owned industry) intermingled with centralized economic planning
(which may include intervention for state ownership of
some of means
of production).

For some states,
there is not a consensus on whether they are capitalist, socialist, or mixed
economies. Economies in states ranging from the Cuba have been termed mixed economies. By most
definitions, Canada could be
referred to as a mixed economy, as Canadian health care is nationalized in
order to provide health care free of charge.

3.3. Planned economy

A planned economy (also known as command economy and
centrally planned economy) is an economic system in
which the government controls
the factors of production and makes all decisions about their use and about the
distribution of income. In such an economy, the planners decide what should be
produced and direct enterprises to produce those goods. Planned economies are
in contrast to unplanned economies, i.e. a market economy, where
production, distribution, and pricing decisions are made by the private owners
of the factors of production based upon their own interests rather than upon
furthering some overarching macroeconomic
plan.

A planned economy may either consist of state owned
enterprises, private enterprises who are directed by the state, or a
combination of both. Though "planned economy" and "command
economy" are often used as synonyms, some make the distinction that under
a command economy, the means of production are publicly owned. That is, a
planned economy is "an economic system in which the government controls
and regulates production, distribution, prices, etc." but a command
economy, while also having this type of regulation, necessarily has substantial
public ownership of industry. Therefore, command economies are planned
economies, but not necessarily the reverse (example: Nazi Germany’s private
ownership yet use of the Four
Year Plan could construe them as a planned economy, but not
necessarily a command economy, while the Soviet Union with public ownership
would be a command economy).

Important planned economies that existed in the past
include the economy of the Soviet Union, which was for a time the world’s
second-largest economy. Beginning in the 1990s, many governments presiding over planned
economies began deregulating and moving toward market based economies by
allowing the private sector to make the pricing, production, and distribution
decisions. Although most economies today are mixed economies,
planned economies exist in some countries such as North Korea.

3.4.Traditional economy Africa. There are some advantages and disadvantages
in a  traditional economy. Advantages:
a traditional economy fosters the sense of community, as it causes
little friction among members and provides a sense of security and
psychological comfort. Subsequently, there is a relatively low unemployment
rate and low crime
rate. A traditional economy allows for a greater degree of autonomy
as no money or little is given to the government and there is no competition. Disadvantages: a
traditional economy does not allow for much economic growth and development as
changes are very slow and there is a lack of social mobility. A traditional
economy does not take advantage of technology and there is relatively little
promotion 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, is
a proposed economic
system that uses participatory decision making as an economic mechanism to
guide the allocation of resources and consumption in a given society. Proposed as
an alternative to contemporary capitalist
market economies and
also an alternative to centrally
planned socialism
or coordinatorism, it is
described as "an anarchistic economic vision". It emerged from the
work of political
theorist Michael
Albert and that of radical Robin Hahnel,
beginning in the 1990s.

The underlying values that parecon seeks to implement
are self-management. It proposes to attain these ends mainly
through the following principles and institutions:

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

·  
balanced job complexes,

·  
remuneration according
to effort and sacrifice, and

·  
participatory planning.

4. Changes of an economic situation in
Russia

4.1. Recent economic developments

A booming domestic market continues to drive strong
economic growth in Russia. Substantial net capital inflows have now joined
receipts from resource exports in fueling domestic demand. In this context, the
pace of economic growth has accelerated since the second quarter of the year.
Annual GDP growth could reach 7.0 percent. Fixed capital investment and FDI have
also exhibited impressive growth. The economic expansion continues to be
concentrated primarily in non-tradable sectors of the economy that have
profited from a stronger ruble. Stagnating production, high investment needs,
and rapidly-growing domestic demand are raising increasing concerns 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 a stronger
capital account has somewhat compensated for this trend, supporting the
continued accumulation of foreign reserves, albeit at a slower pace. Rapid
growth in money supply and higher federal expenditures in 2006 have been
largely absorbed by higher-than-expected economic growth. Inflation has slowed
considerably in the second half of the year. The planned 2007 budget foresees
an expansion of federal expenditures of 0.9 percent of GDP, with priorities in
additional expenditures going to the state apparatus, investment and social
programs.

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

Recent
policy initiatives of the government include a planned package of measures
aimed at promoting diversified growth and the innovation economy and new
legislative initiatives on migration. A long awaited bilateral agreement with
the United States could pave the way for Russia’s accession to the WTO in the
near future.

Main Macroeconomic Indicators

                    2001
2002   2003  2004 2005   2006

GDP growth, %                                              5.1   
4.7    7.3     7.2     6.4     6.5

Industrial production growth, y-o-y, %                4.9   
3.7    7.0    8.3    4.0    4.3

Fixed capital investment growth, %, y-o-y           8.7  
2.6    12.5   10.9   10.5   12.6

Federal government balance, % GDP                   3.0   
2.3    1.7    4.2    7.5    8.6

Inflation (CPI), % change, y-o-y                        18.6 
15.1   12.0   11.7   10.9   7.5

Current Account, billion $                                  35.1 
32.8   35.9   60.1   86.6   79.9

Reserves (including gold) billion $, end-o-p        
36.6   47.8   76.9    124.5 182.2 272.5

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