M. TUGAN-BARANOVSKY'S THEORY OF ECONOMIC CYCLES AND THE PRESENT

Abstract

The article on the topic “Theory of economic cycles of M.I. Tugan-Baranovsky and modernity” aims to explain the nature of modern economic cycles, based on the economic heritage of M. Tugan-Baranovsky.During the study, the authors used empirical-theoretical (complex), as well as scientific-psychological research methods, which are important tools for studying mental processes, emotions and human behavior in the field of behavioral economics.The results of the study indicate that M. Tugan-Baranovsky managed to predict the impact that the development of the financial market will have on the cyclicality of the economy in the future. Long before the “great depression”, M. Tugan-Baranovsky expressed the hypothesis that in the future the causes of economic cycles should be sought in the nature and features of the functioning of financial markets, associated with the features of decision-making by market players. In modern economic theory, it is generally accepted that the main subject of the economy is an economic person (Homo Economicus), who makes rational economic decisions. But with the development of the money and stock markets, as well as with the increase in the number of individual investors, the adoption of rational decisions by the majority of participants becomes, in the opinion of the authors of the article, increasingly unlikely. Since the financial market is a very dynamic system with high uncertainty, players, when making decisions, usually rely on intuition, which can work effectively only under constant conditions. As a result, the authors of the article conclude that the financialization of the modern economy, the peculiarities of decision-making, together with a change in the structure of financial market participants, have created new conditions for the instability of modern financial markets. The scientific novelty of the study lies in the creation of an integrated concept of the cyclicality of the modern economy, which is based on the theory of cycles by M. Tugan-Baranovsky, the postulates of behavioral economics and the trends in the development of the modern financial market. The practical significance of the study is that the conclusions drawn by the authors can be useful for choosing countercyclical regulation tools in the modern economy.