Keynesian approach to economy regulation: answers to the challenges facing the agro-industrial complex

Russian State Agrarian University – Moscow Timiryazev Agricultural Academy, Moscow, Russia

^* Corresponding author: rector@rgau-msha.ru

Abstract

The paper presents the main aspects of the Keynesian theory of state economic policy in the context of responding to global challenges and national barriers facing the development of the Russian agro-industrial complex. The purpose of the work is to explore the possibilities of the Keynesian approach to respond to the challenges facing the agro-industrial complex of modern Russia. The methodological basis of the study is an integrated approach. The study identifies the main postulates of Keynesian theory. On the basis of macroeconomic models of aggregate demand and aggregate supply, the Keynesian cross, the features of the Keynesian approach to the regulation of economic activity in terms of investment, savings, and consumption are formulated. The Keynesian macroeconomic model of state policy is presented, implemented by increasing the real volume of investment expenditures through fiscal and monetary policies; methods of increasing effective solvent demand; reducing the fiscal burden on the population and business. The limits of the application of Keynesian methods are defined: "liquidity trap”; the emergence of a chronic budget deficit; the attenuation of the multiplier-acceleration mechanism; “stagflation”; “inflationary spiral”. The relevance of the application of Keynesian methods of regulation in the modern Russian agro-industrial complex is substantiated: fiscal methods can have a beneficial effect on the development of agriculture: the growth of investments in the agricultural sector by 1%, stimulates economic growth in the industry by 0.64%; monetary methods have a long-term significant impact on the agricultural sector development; an increase in effective solvent demand for food in conditions of insufficient demand for food products in Russia is of high importance; a reduction in the fiscal burden can have a beneficial impact on agriculture development.