Macroeconomic policy: types, goals and objectives

Macroeconomic policy of the state is actions that are aimed at regulating economic processes in order to maintain the growth rates of the economy, they are called to limit inflation and provide full employment. The main task of macroeconomic policy is to balance unemployment and inflation.

Fiscal Macroeconomic Policy

In another way, this type of policy is called financial or budgetary. It extends to the main elements of the treasury of the state and is directly related to taxes, budgets, cash receipts and expenditures of the state. In a market environment, this policy is the basis of economic policy. This category includes fiscal, taxation, as well as a policy of costs and revenues.

The most important task of fiscal policy is to find ways and sources of the formation of state funds, as well as funds that will contribute to the fulfillment of economic policy goals. Thanks to the implementation of fiscal policy, state bodies can regulate global economic processes in the country, maintain the stability of monetary circulation, finance, provide financing for the public sector, promote better utilization of scientific, technical, production and economic potential. With the help of fiscal policy tools, the state can influence aggregate supply or demand, thereby influencing the economic situation, taking anti-crisis measures.

Monetary and Monetary Policy

This policy is designed to regulate the money supply and circulation in the state through direct independent influence or through the central bank. It affects not only money, but also prices.

The aim of monetary policy is to stabilize, increase the sustainability and efficiency of the entire economic system, provide employment, overcome the crisis and economic growth. In contrast to fiscal monetary and monetary macroeconomic policy has a narrower specialization and is limited only by the stabilization of circulation of money.

The objectives of this policy are to suppress inflation, stabilize prices, exchange rates, purchasing power, regulate the money supply, supply and demand for money through the banking system.

Monetary policy is tough, when there is a reduction in the money supply, a limitation on emissions, and high interest rates on loans are maintained. The policy aimed at increasing the mass of money or not hampering this process, helping to obtain cheap lending, is characterized by softness.

Macroeconomic policy in open economy

Fiscal and monetary policy is the backbone of the state's economic policy. However, there are other categories.

Structural and investment policy influences the formation and change of the regional and industrial production structure of the country. It affects the ratio, the proportion of production of various products of the industry. The manifestations of this policy are agrarian and industrial policy.

Social policy takes a focus primarily on the social protection of people, to ensure the paramount needs of the population, to maintain decent living conditions, as well as it is engaged in environmental protection. Next to this policy is the policy of employment, regulation of wages and incomes.

Foreign economic policy, which extends to economic relations with other states, also deserves attention.