Subject The paper investigates inflation, its socio-economic reasons and ways to eliminate it. Objectives The major purpose of the studyis to identify the nature of inflation, being an adverse negative economic phenomenon. Methods The paper draws upon formal logic, the method of historical and logical unity, and scientific abstraction. Results The study shows that in its monetary and price policy the Bank of Russia proceeds from the quantity theory of money that is mathematically formalized in the ‘equation of exchange’ (the Fisher Equation). However, the non-scientific quantitative theory together with the false ‘formula of exchange’ cannot be a reliable basis for productive practice of the Central Bank. Only be the law on currency circulation can be a scientific basis of the amount of money in circulation. The reason of inflation is in the socio-economic structure of the society, in the supremacy of capitalist monopolies. They are the cause of distortion of pricing as compared to the conditions of free competition (inflation and deflation). Conclusions I believe, the cause of inflation is not in the quantitative ratio of goods and money, but in the socio-economic structure of the modern society. The findings show that when a monopoly sets high prices, the prices for all goods involved in the exchange with the monopolies, grow.
Keywords: real economy, virtual economy, monopoly prices, inflation, deflation
References:
Fisher I. Pokupatel'naya sila deneg [The Purchasing Power of Money]. Moscow, Delo Publ., 2001, 199 p.
Dmitrieva O., Ushakov D. [Demand-pull inflation and cost-push inflation: Causes of formation and forms of dissemination]. Voprosy Ekonomiki, 2011, no. 3, pp. 40–52. (In Russ.)
Ivanter V., Nekipelov A., Bogomolova O., Glaz'eva S. [Following the generation of alternative strategies of socio-economic development of Russia by scientists of the Economics section of Social Sciences Branch of RAS]. Rossiiskii ekonomicheskii zhurnal = Russian Economics Journal, 2014, no. 2, pp. 3–21. (In Russ.)
Ershov V. [Five years after the intense phase of crisis: How stable is the situation?]. Voprosy Ekonomiki, 2013, no. 12, pp. 29–47. (In Russ.)
Marx K. K kritike politicheskoi ekonomii [Zur Kritik der politischen Ökonomie]. Moscow, Gospolitizdat Publ., 1951, 270 p.
Marx K. Kapital. T. 1 [Das Kapital. Kritik der politischen Ökonomie. B. 1]. Moscow, Gospolitizdat Publ., 1973, 907 p.
Zhirinovskii V.V., Yurovitskii V.M. Novye den'gi dlya Rossii i mira [New money for Russia and the world]. Moscow, Galeriya Publ., 1998, 512 p.
Maevskii V., Malkov S. [Prospects for the macroeconomic reproduction theory]. Voprosy Ekonomiki, 2014, no. 4, pp. 137–155. (In Russ.)
Krasil'nikov O., Krasil'nikova E. [Non-State monetary systems in the information economy]. Voprosy Ekonomiki, 2013, no. 5, pp. 151–159. (In Russ.)
Kiyutsevskaya A. [The floating exchange rate of the Russian ruble: Myth or reality?]. Voprosy Ekonomiki, 2014, no. 2, pp. 50–67. (In Russ.)
Modernizatsiya mekhanizmov razvitiya ekonomiki Rossii: monografiya [Modernizing the mechanisms of Russia's economy development: a monograph]. Tver, Tver State University Publ., 2016, 116 p.
Zamulin O., Styrin K. [How to distinguish between cause and effect?]. Voprosy Ekonomiki, 2012, no. 1, pp. 4–20. (In Russ.)
Gogokhiya D. [Money and market]. Voprosy Ekonomiki, 2012, no. 1, pp. 127–142. (In Russ.)
Marx K., Engels F. Sochineniya [Writings]. Moscow, Gospolitizdat Publ., 1961, vol. 25, part 1, 508 p.
Anikin A.V. Yunost' nauki [Youth of science]. Moscow, Gospolitizdat Publ., 1985, 367 p.
Ricardo D. Sochineniya [Collection works]. Moscow, Gospolitizdat Publ., 1941, vol. 1, 288 p.
