Deepening financial inequality: causes and consequences

Аuthors

Omel'yanovich M. Y.

Donetsk National University of Economics and Trade named after Mykhailo Tugan-Baranovsky, DonNUET, 31, Shchorsa str., Donetsk, 283050, DNR

e-mail: finans@kaf.donnuet.dn.ua

Abstract

This paper is dedicated to the study of economic relations associated with socio-economic inequalities and its component — financial inequality, which is reflected at the global, state and regional levels, as well as the levels of enterprises, organizations, institutions and individuals.

In modern conditions financial inequality worsened dramatically with the development of the world economy, deepening of global economic relations; development of financial relations; strategic amalgamations between corporations, alliances, unions; deepening of contradictions between rivaling states; globalization; labor mobility, goods and services; formation of a unified information system.

The goal of the paper consists in emphasizing the importance of financial inequality as an economic phenomenon, analyzing its dynamics, developing recommendations on its mitigation and implementation of State regulation by using aggregate financial instruments, such as budget, taxes, public debt, etc.

While carrying out the studies and tis paper formation the author employed scientific methods of analysis and synthesis of theoretical views and concepts, economic and statistical methods to assess the impact of various factors on the financial inequality, as well as scientific heritage on this issue. The study was conducted based on the principle of historicism.

Economic theory principles, scientific concepts and theoretical evidence of national and foreign scientists served as this work methodological basis.

The results of the work consist in generalization scientific ideas and viewpoints of national and foreign scientists and economists, and determining socio-economic inequalities as inequality of wealth associated with the degree of realization of human rights, democracy, free market and effective State laws.

Theoretical research, opinions and viewpoints contained in learned writings on the issue of financial inequality will supplement the content of academoic disciplines related to “Finance and Credit”, taught to students of higher professional education.

The results of the study, based on analysis of financial statistics on income, inflation, taxes, debts, are rather efficient at the macro-level while forming the state policy.

The results obtained in the course of the study are aimed at State regulation of financial inequity mitigation through implementation of fiscal measures to the social protection of the population. The state support during economic crises and the need for economic regeneration will affect significantly the financial inequality mitigation.

The paper suggests creative destruction of informal relations dominance, transparency of state accountability, formation of a balance between State regulatory effects on financial inequality and self-regulation on the part of businesses and individuals.

Keywords:

financial inequality, state regulation, socio-economic situation, taxes, budget, state debt, globalization

References

1. Gosudarstvennaya sluzhba statistiki Ukrainy, http://www.ukrstat.gov.ua

2. Ministerstvo ekonomiki Ukrainy, http://www.me.gov.ua

3. Ministerstvo sotsial'noi politiki Ukrainy, http://www.mlsp.gov.ua

4. Zatonats'ka T.G. Finansovye instrumenty sotsial'no-ekonomicheskogo razvitiya gosudarstva i regionov (Financial instruments of socio-economic development of the state and regions), Kiev, Komp'yuter-press, 2009, 288 p.

5. Busareva T.G. Investitsii: praktika i opyt, 2014, no. 9, pp. 75-77.

6. Organizatsiya Ob''edinennykh Natsii i voprosy globalizatsii, http://www.un.org/ru/development

7. Zaklyuchitel'naya deklaratsiya 41-go Sammita Bol'shoi semerki “ThinkAhead. Deistvovat soobshcha. Dumaya o zavtrashnem dne. Deistvuya vmeste” (7-8 June 2015), http://www.un.org/ru/development

8. Eucken Walter. Grundsatze der Wirtschaftspolitik, Tubingen und Zurich, 1952, s. 257.

9. Sen Amartya K. Development as freedom, New York, Oxford University Press, 1999, 366 p.

10. Hayek Friedrich A. Law, legislation and liberty. A new statement of the liberal principles of justice and political economy. London, Routledge & Kegan Paul, 1973 — 1979, 3 vols.

11. World Population Ageing 2013 (report). New York, United Nations, Department of Economic and Social Affaire, Population Division, 2013, 114 p.

12. Ermolaev A.V. Ukraina v 2010 godu: ezhegodnye otsenki obshchestvenno-politicheskogo i sotsialno-ekonomicheskogo razvitiya (Ukraine 2010: annual assessment of the socio-political and socio-economic development), Kiev, NISI, 2010, 528 p.

13. Kapitsa L.M. Indikatory mirovogo razvitiya (The world development Indicators), Moscow, MGIMO (U) MID RF, 2008, 327 p.

14. Novorozhkina L.I. Politika dokhodov i zarabotnoi platy (Incomes Policy and wages), Rostov-na-Donu, Irbis, 1997, 133 p.

15. Novorozhkina L.I., Chernova T.I. Bukhuchet i audit, 2003, no. 1, pp. 147-153.

16. Omel'yanovich L.A., Soroka I.V. Makroekonomika Ukrainy (Macroeconomics of Ukraine), Donetsk, DonNUET, 1998, 228 p.

17. Ministerstvo finansov Ukrainy, http://www.minfin.gov.ua/201508/06/8111833

18. Greenspan Alan. The Age of Turbulence: Adventures in a New World, New York, The Penguin Press, 2007, 571 p.

19. Zinchenko A.S., Yudina O.V. Vestnik Moskovskogo aviatsionnogo instituta, 2009, vol.16, no. 1, pp. 124-128.

20. Chaika N.K., Zverev A.M., Chistov P.V. Vestnik Moskovskogo aviatsionnogo instituta, 2008, vol.15, no. 6, pp. 70-74.