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Cybernetics And Systems Analysis
International Theoretical Science Journal
UDC 330.101.541-336.7
B.B. Dunaev1, A.A. Lyubich2


1 State Educational-Scientific Establishment “The Academy
of Financial Management”, Kyiv, Ukraine

bbdunaev@ukr.net

2 State Educational-Scientific Establishment “The Academy
of Financial Management”, Kyiv, Ukraine

alyubich@ukr.net

MODEL OF FUNCTIONING OF THE ECONOMY AT THE MARKET RATE OF CURRENCY

Abstract. A model of open economy functioning with a foreign exchange market is presented, which allows determining macroeconomic indicators in the medium term with the Central Bank monetary regulation of the amount of money in circulation, interest rates and the ratio of cash to demand deposits and with government regulation of reproduction of existing capital. The currency rate is determined by a function that is directly proportional to the decrease in monetary inflation and the growth of real consumer demand and is inversely proportional to the increase in the currency intervention of the Central Bank and transactions. It is shown that the exchange rate, inversely proportional to currency interventions and transactions, can vary from infinity to unity. Therefore, in the absence of constant monitoring and adjustment by the central bank of the exchange rate, its sharp multiple growth is possible as a result of relatively small currency speculations leading to an economic catastrophe through the default of circulating money, a decline in real GDP and a collapse of financial markets.

Keywords: economy, market, demand, supply, balance, money, currency, banking system, interest rate, foreign exchange market, exchange rate, crisis, inflation.



FULL TEXT

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