Anti-inflationary policy of the state: types and methods of conducting

Inflation is an objective economic phenomenon that can not be avoided, however, it is possible and necessary to combat it. The depreciation of money and the increase in the money supply are in principle a normal process, however, a sharp jump in inflation can cause irreparable violations in the economic system. That is why the state's anti-inflationary policy is one of the most important instruments of economic regulation. We will describe the types and methods of suppressing inflation in this article.

The state's anti-inflationary policy includes a huge set of measures related to the suppression of the processes of depreciation of money. In essence, inflation is a reduction in the value of money due to a significant increase in the money supply in circulation. There are two main approaches to the selection and implementation of measures to reduce inflation: monetarists are adherents of the so-called monetary regulation, in which the anti-inflationary policy of the state can be implemented in the following ways:

1) regulation of the so-called discount rate of interest - that is, the interest rate under which the national bank lends money to commercial banks. Naturally, a change in the discount rate entails a similar change in commercial rates. Thus, by raising the discount rate, the central bank reduces the demand for money from commercial banks, and those in turn are forced to raise their rates, thereby reducing the population's demand for money.

2) Regulation of mandatory reserve requirements - part of the assets of commercial banks, which must necessarily be stored on the so-called correspondent account of the bank in the Central Bank. This method of regulation is similar to the regulation of the discount rate, however, has a somewhat lesser force.

3) Operations with government securities - bonds, treasury bonds and others - allow you to extract the real money supply from circulation, replacing it with less liquid government obligations.

In the Keynesian view, the anti-inflationary policy of the state should be implemented by eliminating the budget deficit, which in turn must be implemented by regulating the incomes of the population, state expenditures and tax rates. This policy is called fiscal-fiscal and involves the use of the following tools:

1) Reducing the state's spending on the maintenance of socially unprotected sections of the population - payments of pensions, unemployment benefits, benefits and so on are reduced;

2) Increase of tax rates, as a result of which the state budget receives more money, which is then released to a lesser extent in circulation. It should be noted that the instruments of fiscal policy should be applied very carefully, as this causes a very strong negative reaction of the population.

Anti-inflationary policy in Russia is a combination of methods and monetary, and fiscal-fiscal policies. Features of the Russian economy and the mentality of the population, which only recently ceased to live in a planned economy, puts the government in front of the need to create a unique set of measures to suppress inflation. One of the most interesting methods by which the anti-inflation policy of the Russian Federation is implemented is the creation of a stabilization fund, which, on the one hand, allows us to remove a "harmful" part of the money supply from the turnover, and on the other hand - gives us the opportunity to accumulate huge financial resources that Make Russia a weighty and respected player in the global financial market.