§ 1. Concept money circulation

Money circulation is the movement of money in internal circulation in cash and non-cash forms, serving the sale of goods, as well as non-commodity payments and settlements in the economy. The objective basis of money circulation is commodity production, in which the commodity world is divided into goods and money, giving rise to contradictions between them. With the deepening of the social division of labor and the formation of national and world markets under capitalism, money circulation receives further development. It serves the circulation and turnover of capital, mediates the circulation and exchange of the entire total social product, including the income of various classes. With the help of money in cash and non-cash forms, the process of circulation of goods, as well as the movement of loan and fictitious capital, is carried out.

Money circulation is divided into two areas: cash and non-cash. Cash circulation is the movement of cash in the sphere of circulation. It is served by banknotes, small change and paper money (treasury notes). In developed capitalist countries, banknotes issued by the central bank make up the overwhelming majority of cash circulation. A small part of the issue of money (about 10%) is accounted for by treasuries, which issue mainly coins and small denomination paper notes - treasury notes.

Non-cash circulation is a change in cash balances in bank accounts, which occurs as a result of the bank’s execution of the account owner’s orders in the form of checks, plastic cards, orders of approval, payment orders, electronic means of payment, and other payment documents. In some countries, treasury bills, certificates, and other instruments are used in circulation.

There is a close and mutual dependence between cash and non-cash circulation: money constantly moves from one sphere of circulation to another, changing the form of cash banknotes to a deposit in a bank, and vice versa. Receipts of non-cash funds into bank accounts are an indispensable condition for the issuance of money. Therefore, non-cash circulation is inseparable from the circulation of cash and together with it forms a single monetary circulation of the country, in which a single money of the same name circulates.

With the improvement of payment and settlement relations, the relationship between cash and non-cash areas of money circulation also changed. Before late XIX V. cash payments predominated. IN modern conditions specific gravity cash, especially in industrialized countries, is small; for example, in the USA it is about 8%.

Money is a special, socially recognized product, a universal equivalent.

Functions of money:

medium of exchange (money acts as an intermediary in the exchange of goods and services)

a means of preserving wealth (money makes it possible to save part of the profits received for the future, as if to conserve them until they are needed)

measure of value (i.e. their ability to measure the value of all goods, serves as an intermediary in determining price)

world money (money is used for international payments. Gold acts as world money)

instrument of payment

Types of money(metal coins or paper notes ) . The first type of money was commodity money. Credit money is paper tokens of value created on the basis of a loan. There are 3 types of credit money: bill, banknote, check. A promissory note is a debt obligation issued by individuals. Banknote - debt obligations of banks. A check is a monetary document of the established form containing an unconditional order from the check holder for credit. institution to pay the holder of the check the amount specified in it. A check serves as a means of obtaining cash from a checking account at a bank. Credit cards are a personal document issued by a bank or trading company that certifies the identity of the owner of a bank account and gives the right to purchase goods and services in retail trade no cash payment. “Almost money” are liquid assets that have a fixed nominal value and are easily converted into cash or checkable deposits.

Theories of money.

• 1. Metal theory of money Representative - W. Stafford (1554-1612) The dominant doctrine is mercantilism. Wealth was identified with money. And money - with precious metals and, above all, with gold.
• 2. Nominalistic theory of money Representative - J. Berkeley (1685-1753)

J. Stewart (1712-1780) Money is created by the state, the value of money is determined not by its metallic content, but by what is written on it, its denomination.

3. Quantity theory of money Representative - David Hume (1711-1776) An increase in the amount of money in circulation does not contribute to the growth of the country’s wealth, but only to an increase in prices for goods.

Money turnover represents circulation cash flows in cash and non-cash form. Money circulation has two main forms: cash and non-cash. Cash circulation- movement of cash in the form of banknotes, coins, paper money.Non-cash money circulation- this is the movement of electronic money, i.e. account entries. Non-cash money circulation dominates (because it accelerates money turnover, convenience, etc.). There is a relationship between cash and non-cash money turnover: money constantly moves from one to another sphere of monetary circulation.

Laws of monetary circulation. Velocity of money circulation is the speed of turnover of cash reserves, because it equals the rate at which money is spent on goods and services in a period of time.

The basic law of monetary circulation, the formula of which was presented by K. Marx, connects prices, velocity of circulation and the quantity of money: Quantity of money = Sum of prices / number of turnover of monetary units.

Monetary system- This is a historically established and legally established structure of monetary circulation in the country.

The type of monetary system depends on the form in which money functions. In this regard, they highlight two types of monetary systems:

a system of metal circulation, in which the monetary commodity directly circulates and performs all the functions of money, and credit money is exchanged for metal.

a system of circulation of credit and paper money, in which gold is forced out of circulation.

Elements of the monetary system and their interaction

The elements of the monetary system are those components on which the organization of the circulation of monetary resources is based: monetary unit, price scale, types of money, emission system, state or credit apparatus.

Price scale - establishing the content of the price of a monetary unit through the weight content of gold.

The official ratio between the ruble and gold or other precious metals is not established

A monetary unit is a currency established by law that serves to measure and express the prices of all goods.

Emission system in developed countries means the issuance of bank notes by the central bank, and treasury notes and coins by the treasury in accordance with the legally established issuance law.

The interaction of elements of the monetary system is carried out by the Central Bank Russian Federation.

The characteristic features of modern monetary systems are:

abolition of official gold content, collateral and exchange of banknotes for gold

transition to credit money irredeemable for gold, which degenerates into paper money

the release of money into circulation not only through bank lending to the economy, but also to a large extent to cover state expenses (mainly the issue of government securities)

predominance of non-cash turnover in money circulation

gain government regulation monetary circulation.

The legal basis for the functioning of the Russian monetary system is the Law of September 25, 1992 “On the monetary system of the Russian Federation”. This law determines that the official monetary unit (currency) of the Russian Federation is the ruble, and the issuance of other monetary units is prohibited. There is no official distinction between the ruble and gold or other precious metals, and the exclusive right to issue cash, organize it and withdraw it from circulation on the territory of the Russian Federation belongs to the Central Bank of Russia.

Money that has legal tender force is bank notes (banknotes) and metal coins, samples of which are approved by the Central Bank of Russia. They are required to be accepted at their face value throughout the Russian Federation for all types of payments, as well as for crediting to accounts, deposits, letters of credit and for transfers.

Money circulation is the continuous movement of money in cash and non-cash form, during which money performs the functions of circulation and payment

Currently, the theory identifies the following types of money, ranging from the earliest to those existing today.

Metal (full or real) money;

Paper money (signs of value, representatives of full-fledged money);

Credit money (signs of value, substitutes for real money).

Metallic money is real money, i.e. money whose nominal value corresponds to the real value or value of the metal from which they are made.

Metal money (copper, silver, gold) made it possible to move from a commodity-accountable universal equivalent to a commodity-weight equivalent.

Ethnographer Bastian, who visited Burma at the beginning of the 19th century, testified that when people in Burma went to the market, they stocked up with a piece of silver, a hammer, a chisel, scales and weights. The payment for the goods was silver, the required amount of which was cut off right there on the market.

A later stage in the development of metal monetary circulation was the appearance of coins, which made it possible to move from weight proportions in the exchange of goods and measurement of their value to a metal-minted universal equivalent. A coin is a certain guaranteed amount of metal, which has the established by law distinctive features. The round shape of the coin turned out to be the most convenient for circulation (less wearable). The front side of the coin is called the obverse, the back side is called the reverse, and the edge is called the edge. In order to prevent the coin from being damaged, the edge was cut.

In most countries, gold became real money. The reason for this was the properties of this metal, making it most suitable for performing the functions of money:

Rarity;

Portability (high concentration of cost);

Uniformity in quality;

Divisibility and connectivity without loss of value;

Storability ( high degree resistance to external physical and chemical influences).

It should be noted that not all metal money is full-fledged. Thus, signs of value are a worn-out coin made of precious metal, a billon coin, i.e. a small coin made of cheap metals (copper, aluminum).

Paper money is signs, representatives of full-fledged money, their quantity in circulation is determined by the value of the state’s gold reserves. Historically, paper money arose from metal circulation and appeared in circulation as substitutes for silver and gold coins that were previously in circulation, based on the following premises:

1) due to objective necessity:

Gold mining did not keep up with the production of goods and did not meet the full need for money;

Highly portable gold money could not serve the low-value turnover;

Gold circulation did not have economic elasticity (the ability to quickly expand and contract).

2) from the peculiarities of the functioning of money as a means of circulation. The emergence of paper money occurs in three stages.

Stage 1 - erasing coins, as a result of which a full-fledged coin turns into a token of value;

Stage 2 - deliberate damage by the state to metal coins, i.e.

A deliberate reduction in the content of precious metals in a coin in order to generate additional income for the treasury (History knows many examples of damage to coins. For example, french king Philip IV the Handsome received another nickname - the counterfeiter. In Russia, from the 12th to the 18th century, the silver content in the ruble decreased from 48 spools to 4 spools of 21 shares.);

Stage 3 - the government issues paper money with a forced exchange rate.

The first paper money appeared in China during the reign of the Tang Dynasty (618-907). It is known that in 751 this money went out of circulation due to depreciation after defeat in the war with the Tibetans. In Persia, paper money was issued in 1294, Japan - 1337, France - 1571, USA - 1690, Russia - 1769. under Catherine II.

The peculiarity of paper money is that, being deprived of independent value, they are provided with a forced exchange rate by the state, and therefore acquire a representative value in circulation and serve as a means of purchase and payment.

Issuers of paper money are either the government treasury or central banks. The difference between the nominal value of issued paper money and the cost of its issue forms the share premium, which is an essential element of government revenue. Paper money represents the emission universal equivalent.

The economic nature of paper money is such that it excludes the possibility of stable circulation, since the issue of money is not regulated by the needs of commodity circulation in money, and there is no mechanism for automatically withdrawing excess paper money from circulation. Since the issue of paper money is carried out by the state, it is its needs for money to cover its own expenses that determine the size of the issue of paper money. Therefore, the most typical inflationary depreciation of paper money is caused by their excessive emission.

Credit money arises with the development of commodity production. Their appearance is associated with the function of money as a means of payment, where money acts as an obligation that must be repaid on time. Credit money is a representative of money capital; it does not appear from circulation, but from production, from the circulation of capital. Unlike the functioning of paper money, the amount of credit money in circulation is determined not by the real gold and foreign exchange reserves of the state, but by loans. Credit money is issued both privately legal entities, and the state represented by the central bank.

Credit money has gone through the following development path: bill of exchange - accepted bill of exchange - banknote - check - electronic money - plastic cards.

A bill of exchange is the first type of credit money that arose as a result of trade on credit. A bill of exchange is a document drawn up in the form established by law and containing an unconditional abstract (without regard to the type of transaction) written promissory note.

Types of bills:

Commercial, arising on the basis of a trade transaction.

Types of commercial bill:

A simple (solo bill) is a written promissory note of the debtor to pay within a specified period of time a certain amount of money to the owner of the bill;

A transfer (draft) is an order from the creditor (drawer) to the debtor (drawee) to pay a certain amount to the required third party (remitee) within a specified period. That. the drawer transfers his debt to a third party to the drawee;

Financial, arising from the lending of a certain amount of money (a type of treasury bill is a treasury bill, where the debtor is the state);

Friendly - non-cash bills not related to any specific transaction, but issued by counterparties to each other in order to receive Money by accounting with commercial banks;

Bronze - bills that do not have real security.

An accepted bill is a bill guaranteed for payment by a third party (most often a bank).

The banknote is the dominant form of credit money currently issued by the central bank and has credit collateral(bills, government securities). Banknotes are perpetual debt obligations of the state and, thanks to their state guarantee, become a generally accepted universal equivalent.

The issue of banknotes has 3 support channels:

Bank lending to the economy (banknotes are issued against promissory notes);

Bank lending to the state (banknotes are issued against state debt obligations);

Gold and foreign exchange reserves (banknotes are issued against the increase in gold and currency reserves in the central bank).

Having the same nature as a bill of exchange, a banknote differs significantly from it in the following ways:

Urgency (the bill is a fixed-term debt obligation, the banknote is indefinite);

Guarantee (a bill is guaranteed by an individual, a banknote by the state);

When considering a banknote as a form of credit money, it is essential to consider the differences between a banknote and paper money. In the analysis, we will use the concept of a classic banknote - the first form of a banknote that has double security (a commercial guarantee based on bill accounting and a gold guarantee that ensures its exchange for gold):

By origin, paper money arose from the function of money as a means of circulation, a banknote from the function of being a means of payment;

According to the method of issue, paper money is issued by the treasury, banknotes are issued by the central bank.

By repayment - after the expiration of the term, the bills under which the banknotes were issued are returned to the bank, paper money remains in circulation;

According to the exchangeability - the banknote was exchanged for gold and silver, paper money was always not exchangeable.

In modern conditions, the banknote is not redeemable for gold, which makes it similar to paper money.

A check is a monetary document of the established form containing an unconditional order from the owner of an account at a credit institution to pay the holder of the check the amount specified in it. Checks first appeared in England in 1683.

There are 3 main types of checks:

Personalized - to a specific person without the right of transfer;

Bearer - without specifying the recipient;

Order - to a specific person, but with the right to transfer by means of an endorsement (endorsement) on the back of the document.

Electronic money arose as a result of mechanization and automation of banking operations and the transition to the use of computers. The introduction of computers made it possible to move from paper-based information in the monetary sector to electronic databases and payments through making electronic records. The cash payment took the form of an electronic impulse. Electronic money is not the new kind or a type of money, since it is based on the usual deposit circulation, based on the initial deposit by the person making the payment of a certain amount of credit money.

The reasons for the transition to electronic money were:

Savings on distribution costs;

Acceleration of calculations;

Increasing the level of banking services.

Plastic cards are a personal monetary document that certifies the existence of its owner’s account with a credit institution and gives the right to purchase goods and services in retail trade without paying in cash. A plastic card is an electronic alternative to cash and checks. Plastic cards are characterized by a wide variety of

More on topic 18. The concept of money circulation. Types of money functioning in monetary circulation:

1. 5.1. The concept of “cash turnover”, its content and structure
2. Topic 1.5. Measuring the money supply. Money circulation and its laws
3. CHAPTER V. FUNCTION OF THE MEANS OF PAYMENT. CREDIT BALANCE OF MONEY CIRCULATION. CREDIT MONEY.
4. Functions of money in the system of economic relations. The function of money as a measure of value, circulation, a means of accumulation and savings, a means of payment. Function of world money
5. Monetary system. Types of monetary systems The concept of a monetary system and its types

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Money turnover- the movement of money in the process of performing its functions as a means of circulation and a means of payment. Money circulation is carried out in cash and non-cash forms.

Cash circulation- movement of cash in the sphere of circulation. Cash is used to pay for goods, works, services, wages, bonuses, benefits, scholarships, pensions, travel expenses, etc. Cash circulation is carried out using banknotes and metal coins.

Cashless circulation- movement of value without the participation of cash. According to the economic content, two groups of non-cash circulation are distinguished: for commodity transactions, i.e. non-cash payments for goods and services; on financial obligations, i.e. payments to the budget and extra-budgetary funds, repayment of bank loans, payment of interest on loans, settlements with insurance companies.

Settlement document- it is executed on paper or in in electronic format an order of the payer (client) to write off funds from his account and transfer them to the account of the recipient of funds or an order of the recipient of funds (collector) to write off funds from the payer’s account and transfer them to the account specified by the recipient of funds (collector). When making non-cash payments, the following are used: settlement documents: money orders; letters of credit; checks; payment requirements; collection orders.

Payment order- an order of the account owner (payer) to the bank servicing him, documented in a settlement document, to transfer a certain amount of money to the recipient’s account opened in this or another bank. The procedure for calculating payment orders is shown in Fig. 4.1.

Rice. 4.1. Procedure for settlements by payment orders

Letter of Credit- a conditional monetary obligation accepted by the bank on behalf of the payer to make payments in favor of the recipient of funds upon presentation by the latter of documents that comply with the terms of the letter of credit, or to authorize another executing bank to make such payments. A letter of credit is intended for settlements with one recipient of funds.

Banks can open the following types of letters of credit: covered (deposited) and uncovered (guaranteed); revocable and irrevocable (can be confirmed).

Check- a security containing an unconditional order from the drawer to the bank to pay the amount specified in it to the check holder. The check settlement procedure involves the drawer, check holder, and payer. The drawer is a legal entity that has funds in the bank, which it has the right to dispose of by issuing checks. Check holder is a legal entity in whose favor the check is issued. Payer - the bank in which the drawer's funds are located. The procedure and conditions for using checks in payment transactions are regulated by the Civil Code of the Russian Federation.

Payment request- a settlement document containing the claim of the creditor (recipient of funds) under the main agreement to the debtor (payer) for the payment of a certain amount of money through the bank.

Payments for collection represent a banking operation through which the bank, on behalf and at the expense of the client, on the basis of settlement documents, carries out actions to receive payment from the payer.

The movement of money when they perform their functions in cash or non-cash form is called money circulation.

Cash circulation- this is the movement of cash in the sphere of circulation and its performance as a means of circulation. Cash is used for circulation of goods, services, for payment of wages, benefits, pensions, etc.

Cashless circulation– this is a movement without the participation of cash, i.e. transfer of funds to the accounts of credit institutions.

Non-cash cash turnover covers payments between:

1. enterprises various forms properties that have accounts with credit institutions;

2. legal entities and credit institutions regarding loan repayment;

3. legal entities and the population for the payment of wages and income through the Central Bank.

Depending on the economic content, two groups of non-cash payments are distinguished:

1. for commodity transactions (non-cash payments for goods and services);

2. for financial obligations (payments to the budget, extra-budgetary funds, repayment of bank loans, payment of interest on a loan, settlements with insurance organizations).

There is an interconnection and interdependence between the forms of circulation of money; they form a common money turnover countries in which a single currency operates.

Classification of settlement documents for non-cash expenses:

Introduction 2

1. The concept of money circulation and its types 3

2. Law of money circulation 6

3. Money supply and monetary aggregates 9

One of the main guidelines of monetary policy is the money supply.

It is this parameter of monetary circulation that influences economic growth, price dynamics, employment, and the smooth functioning of the payment and settlement system. 9

Conclusion 12

References 13

Introduction

Money plays a key role in the economy of any state. The versatile use of money and its influence on the development of the country is largely based on the fact that products are produced by enterprises not for their own needs, but for other consumers to whom they are sold for money. In other words, the products produced take the form of a commodity; Commodity-money relations develop between participants in the production and sale of goods.

During the functioning of full-fledged money, issues of changing their quantity in circulation did not attract the attention of scientists, since their excess went into treasure, and if necessary, money was returned to circulation.

However, with the advent of inferior money, the situation has changed and supplying circulation with the necessary money supply becomes the most important task of state policy in the monetary sphere.

World commodity-money relations, as well as in an individual country, require a certain quality of money for circulation. The amount of money needed for circulation is determined by the law of monetary circulation.

The law of money circulation is an economic law that determines the amount of money needed for circulation. When the mass of money in circulation exceeds the total sum of commodity prices, inflation occurs, i.e. since money is not backed by goods, prices rise.

1. The concept of money circulation and its types

Changing the form of value (product to money, money to product), money is in constant movement between three subjects: individuals, business entities and government organizations.

The movement of money when performing their functions in cash and non-cash forms constitutes monetary circulation.

The social division of labor and the development of commodity production are the objective basis of money circulation. The formation of national and world markets under capitalism gave a new impetus to the further expansion of money circulation. Money serves the exchange of the total social product, including the circulation of capital, the circulation of goods and the provision of services, the movement of loan and fictitious capital and income of various social groups.

The beginning of the movement of money is preceded by its concentration among subjects. For the movement of money to arise, there must be a need for money on one of the two parties. The demand for money arises when money is exchanged; money is needed for circulation, payments for goods and services. Their volume is determined by the nominal gross product. There is also a demand for money for accumulation, which acts as different forms ah: deposits in credit institutions, securities, official government reserves.

Money circulation is carried out in two forms: cash and non-cash.

Cash circulation is the movement of cash in the sphere of circulation and the performance of its functions (means of payment and medium of exchange).

Cash is used: for the circulation of goods and services, for settlements not directly related to the movement of goods and services, namely: settlements for the payment of wages, bonuses, benefits, pensions; for the payment of insurance compensation under insurance contracts; when paying for securities and paying income on them; on payments for public utilities and etc.

Cash turnover includes the movement of the entire cash supply over a certain period of time between the population and legal entities, between individuals, between legal entities, between the population and government agencies, between legal entities and government agencies.

Cash flow is carried out using various types of money: banknotes, metal coins, other credit instruments (bills, bank bills, checks, credit cards). The central bank issues cash. He puts cash into circulation and withdraws it when it has become unusable, and also replaces the money with new types of bills and coins.

In Russia, due to the enormous expansion of cash turnover in the last few years, attempts have been made to limit this turnover for legal entities.

Non-cash circulation – movement of value without the use of cash, transfer of funds to the accounts of credit institutions, offset of mutual claims. The development of the credit system and the appearance of customer funds in accounts with banks and other credit institutions led to the emergence of such treatment.

Non-cash transactions are carried out using checks, bills, credit cards and other credit instruments.

Non-cash money turnover covers settlements between: enterprises, institutions, organizations of different forms of ownership that have accounts in credit institutions; legal entities and credit institutions for obtaining and repaying loans; legal entities and the population for the payment of wages, income from securities; individuals and legal entities with the state treasury for the payment of taxes, councils and other obligatory payments, as well as budget funds.