The implementation of the economic cycle: freedom, trust, duty. Николай Камзин

risk

      Entrepreneurship is a catalyst for economic activity and development in general. As a factor in the production of any «deal» begins with an entrepreneurial initiative.

      Potential entrepreneurs like the movement of information is transmitted «case» of an enterprise owner – and interpreter’s remains relevant have a fruitful influence. If the economic sphere would only enterpriser, then eventually all of their enterprises, «business» will lose its capacity and will be the usual circuit with minimal risk and profit, in the end, and even subsidized enterprises.

      Entrepreneurship promotes progress, spins the flywheel economic, but, of course, charges a fee for it – a part of business profits, other shares are capitalists and other subjects. Enterprise risk is high, which may become an obstacle to the realization of entrepreneurial initiatives.

      A small proportion of entrepreneurs have a capital that can be used to finance its innovation, and funding the day, if it fails just lose it and lose this opportunity for future ideas.

      It would be reasonable in view of claims against the enterprise profits of the capitalists and the community to attract and insurers. That is to innovate entrepreneurs need capital, as well as some additional portion of the capital, which is levied on all employers. Thus, if part of the enterprise initiatives will be a failure, the capitalists will receive compensation for their capital, and entrepreneurs, emotionally, to rehabilitate, will continue to generate «neue kombinationen».

      This mechanism is not new in the professional field auditors, appraisers, court-appointed trustees operate their interpretation. Before starting to work a person must insure his liability to a certain fixed amount imperative, and in the process of professional services, as necessary, carries out additional insurance, if the estimated amount of liabilities and risks increase.

      In this case we are talking about professionals specific areas of activity, enterprises are more than entrepreneurs, but the mechanism provides a practical example. It is also important and consideration of other risks could affect the expected set of circumstances.

      However, despite the risks involved, these relations contribute not only the movement of capital but also the transformation into capital of money and goods, means of subsistence and means of production, transformation is possible when «two very different types of the commodity to meet each other and come into contact»[25].

      3. Exchange rate

      3.1. The essence of the exchange rate

      International economic transactions involve the exchange of national currencies, the exchange takes place on a certain ratio. The relationship between monetary units of different countries is the price currency of one country expressed in the currency of another country, called the exchange rate. «The main theme of economic life can be indirectly measured in money»[26].

      Currency (exchange) rate (exchange rate) – price per unit of national currency, expressed in units of foreign currency[27].

      Exchange rate – this is not a technical conversion factor, and the «price» of the currency of the country, expressed in foreign currency or international currency units.

      The exchange rate is necessary for the international foreign exchange, settlement, credit and financial transactions. For example, exporters exchanging foreign currency proceeds to the national as well as in normal circumstances, the currencies of other countries are not treated as cash funds within the State. Importer acquires foreign currency to pay for purchased goods abroad.

      3.2. The basis of the exchange rate

      Cost basis of the exchange rate is purchasing power parity (PPP etc.), that is, the ratio of rates for their purchasing power. Purchasing power is the national average price levels for goods, services and investments. In the free exchange of the notes for gold and gold free circulation between the two countries exchange rate slightly deviates from PPP because of the mechanism of gold dots. The mechanism of gold dots – the limits of deviation from the monetary exchange rate parity (usually less than 1%) lower (at which begins the outflow of gold from the country) and upper (starts its flow). Monetary parity – the ratio of weight of gold in monetary units (coins) in various countries.

      In the paper money circulation exchange rates may significantly deviate from the PPP[28]. In many developing countries and countries with economies in transition, the exchange rate in 2 – 4 times lower parity. Deviation from the PPP exchange rate is influenced by supply and demand for the currency, which in turn depends on various factors.

      Exchange rates are published in the press. Typically, in the current information contained in the previous two quotes of the day and short-term forecasts.

      3.3. Factors affecting the exchange rate

      Should distinguish between circumstantial and structural (long term) changes affecting the exchange rate.

      Conjuncture factors affecting the exchange rate:

      – The state of the economy (inflation rate, interest rates, currency markets, speculation, monetary policy, balance of payments, the extent of the use of national currencies in international payments, the acceleration or delay of International Settlements);

      – The political situation in the country (political factor);

      – The degree of confidence in the national currency at the national and international markets (psychological factor).

      Circumstantial factors associated with fluctuations in enterprise activity, political and military-political situation, guesses and predictions. The exchange rate depends on how pessimistic or optimistic about the company with respect to public policy.

      The higher inflation in the country compared with other states, the lower the rate of its currency, if not counteract other factors. Inflationary depreciation of money in the country causes a decrease in their purchasing power and a tendency to decline in their exchange rate[29].

      The exchange rate affects the degree of currency on world markets. In particular, the preferential use of the U.S. dollar in international transactions and international capital markets is a constant demand for it and maintains its course even in the fall of its purchasing power or passive balance of payments[30]. Rising interest rates on deposits and (or) the profitability of securities in any currency will increase the demand for that currency and will lead to higher prices. Relatively high interest rates and yields of securities in the country (in the absence of restrictions on capital flows) will lead in the first place, the influx into this country of foreign capital and thus – to increase the supply of foreign currency, it’s cheaper and more expensive currency. Second, bring a higher return deposit and securities in national currency promote national cash outflow from the currency market, reducing demand for foreign currency, and a decline in the foreign and local currency appreciations.

      With an active balance of payments is growing demand for its currency from foreign debtors, its rate can be increased.

      Economic importance of the exchange rate determines the need for its regulation.

      Along with the market conditions, which include the effect is difficult to supply and demand for currency, is the dynamics of its course, affect, and relatively long-term trends that determine the position of a national currency in the currency of the hierarchy (structural factors).

      Structural factors:

      – The competitiveness of goods on world markets and its changes. They are caused, ultimately, technological determinants. A forced export stimulates the flow of foreign currency;

      – The growth of national income causes an increased demand for foreign products, while imports of goods may increase the outflow of foreign currency;

      – A consistent increase in domestic prices compared to prices in the markets of partners increases the desire

25

Маркс К. Капитал. Критика политической экономии. Том первый, книга 1: процесс производства капитала. – М.: Политиздат. 1983. – С. 663.

26

Маршалл А. Принципы политической экономии I. – М.: Издательство ПРОГРЕСС. 1983. – С. 69.

27

Киреев А.П. Международная экономика. В 2-х ч. – Ч. II. Международная макроэкономика: открытая экономика и макроэкономическое программирование. – М.: Юрайт-Издат. 2006. – С. 178.

28

Вострикова Л.Г. Валютное право. – М.: Юстицинформ. 2006. – С. 36.

29

Шмыкова С.В. Влияние ваютного курса на потребительские цены в России // Экономический журнал ВШЭ. 2005. № 1. С. 3.

30

Коэн Бенджамин Будущее резервных валют // Финансы & развитие. 2009. С. 26.