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Куругамаге Имаша Севмини, студент международного медицинского института Курского государственного медицинского университета, Курск, Россия Email: [email protected]
ЭКОНОМИЧЕСКАЯ РОЛЬ ГОСУДАРСТВА
Аннотация: в статье описана экономическая роль правительства в реализации фискальной и денежно-кредитной политики.
Ключевые слова: ВВП, безработица, фискальная и денежно-кредитная политика.
Kurugamage Imasha Sewmini, student of the International Medical Institute, Kursk State Medical University, Kursk, Russia
Email: [email protected]
ECONOMIC ROLE OF THE GOVERNMENT
Abstract: the article describes the economic role of the government in conducting fiscal and monetary policies.
Key words: GDP, unemployment, fiscal and monetary policies, government
Куругамаге Имаша Севмини, студент международного медицинского института Курского государственного медицинского университета, Курск, Россия Email: [email protected]
ЭКОНОМИЧЕСКАЯ РОЛЬ ГОСУДАРСТВА
Аннотация: в статье описана экономическая роль правительства в реализации фискальной и денежно-кредитной политики.
Ключевые слова: ВВП, безработица, фискальная и денежно-кредитная политика
In order to ensure the successful performance of the state in the economic world arena, some governments prefer to restrict their roles in economic affairs both on local and worldwide scales. Others, vice versa choose the total control of the economy and defining the state economic course. Government, provides the legal and social framework within which the economy operates, maintains competition in markets, provides public goods and services, redistributes income, corrects for externalities, and Some measures are taken to stabilize the economic [1].
Governments provide legislative and social structure, support competition, provide public goods and services, redistribute benefits, correct externalities, and liberalize the economy. In a market economy like the one proclaimed in the US Constitution, most economic decisions are made not by the government but by individual consumers and merchants. However, economists classify six main functions of government in economies.
Citizens, interest groups, and political leaders contest how seriously the government should pursue scope of activity within each of the named objectives. Over time, as society and the financial system have changed, government activity on these matters has grown.
The role of government in the economy includes the use of fiscal and monetary power to promote economic growth and development to adjust business cycles as needed. As the private sector cannot assume certain roles and responsibilities, government intervention in the economy is inevitable. Government Economics introduces you to the field of government and economics, a new field that aims to better understand the role and behavior of governments in the economy. The invisible hand of the government in the economy is evident when the government intervenes to correct the identified deficiencies
ПОЛИТИКА, ЭКОНОМИКА И ИННОВАЦИИ № 4 (51), 2023 in the market mechanisms. Governments exclude private companies from owning and operating certain companies, such as the military [2].
Governments are meant to guide and direct the pace of economic activity in the country. It is also necessary to ensure stable growth, high employment and price stability. In addition, governments need to adjust tax rates and spending in order to speed up or slow down economic growth. The impact of government policies on businesses is positive on the note of regulating businesses such as telephone companies, taxing citizens and distributing profits to citizens.
Modern economists believe that government has three fiscal functions: Allocation function, Distribution function and Stabilization function [3].
In a market economy, commerce and consumers make their own decisions about what they consume and produce and the allocation of those resources without government intervention. Hypothetically this implies that the producer must decide what to produce, how much to produce, what prices to set for those products to consumers, what to pay workers and so on. These conclusions in a market financial system are influenced by the forces of competition, supply and demand. This is often contrasted with a planned economy, where the central government decides what to produce and in what quantities. A market economy is contrasted with a mixed economy in that there are market processes that are not completely free but are under state control that are not extensive enough to include a deliberate monetary system
The proper role of government in a market economy is controversial. Many supporters of a market economy believe that government has a legitimate role in defining and enforcing the basic rules of the market. There are different perspectives on how strong a role government should have in both steering the economy and addressing the inequalities that markets produce. For example, there is no universal agreement on issues like central banking and welfare. However, many economists oppose protectionist tariffs [1].
ПОЛИТИКА, ЭКОНОМИКА И ИННОВАЦИИ № 4 (51), 2023 They are generally a concept that exists in full employment equilibrium and citizens self-regulate their behavior to protect and defend their interests. The government is unlikely to achieve any gains in expansion of fiscal position through single action policy. Compared to statesmen, they are in a better position to take proactive measures to protect and defend their interests [6].
On matters of stabilization and growth, it is necessary to mention that the central state government controls the overall pace of financial activity, strives to maintain steady growth, high level of services and price stability. By regulating spending and taxation (tax policy) or by monitoring money flows and controlling the use of credit (monetary policy) it can hold or accelerate the growth rate of the economy, including value and employment levels in the process [3]. Regarding the issue of centralized economic regulation (as in most East Asian countries), it is necessary to mention that many researchers still appreciate the economic miracle of the post-war period. recently, there was no consensus among economists as to whether government intervention in the market process had a positive effect on the region's attractive economic growth over the past few decades. Some have argued that East Asian growth can be primarily explained by macroeconomic stability that provided the right incentives for investment and holding as well as high private capital accumulation. Harmful and destructive effect on distribution of resources. This idea endorses only government initiatives that support financial expansion and the effectiveness of markets, and was presented as a market-friendly concern by the World Bank's 1991 World Development Report
Personal income depends on the supply and demand for that individual's labor, which depends on natural ability, human capital, discrimination and other factors. Since labor earnings constitute a large percentage of total earnings, wages are largely responsible for determining how the economy's income is distributed among the various members of society.
Profit allocation raises several important issues about the state of financial regulation. The invisible hand of the market can effectively allocate resources but does
ПОЛИТИКА, ЭКОНОМИКА И ИННОВАЦИИ № 4 (51), 2023 not guarantee that resources are distributed fairly. As a result, many financial researchers, though not all, consider that the government should redistribute profits to achieve greater impartiality. However, in doing so the government has to accept trade-offs with other objectives. When the government adopts regulations to make the distribution of income more balanced, it distorts incentives, changes behavior, and makes the distribution of reserves less efficient.
Although the presented case is marginal, welfare gains should decrease as profits increase. One way to reduce the impact this has on incentives to work is to reduce benefits more gradually as income increases. However, this greatly raises the costs of programs to combat poverty [4]. Another advance is limiting the number of years a person can collect welfare. Proponents of this approach argue that it reduces the unpleasant triggering effects of permanent well-being. Still, critics say it could push many families below the poverty line.
Remember that policy makers challenge a trade-off between equity and quality. Regulations that punish the successful and reward the ineffective reduce the incentive to succeed.
By accurately measuring and pricing current climate hazards, insurance can help encourage the first steps to change. The additional cost of compensation may act as a deterrent to creating high flood risk zones. Market indicators of these benevolent individuals or companies reduce the current vulnerability to weather disasters due to the rate savings associated with taking steps to monitor climate hazards. Encouraging actions that restore society's resilience to today's climate should increase resilience to climate change in the future. Over time, additional adaptation may be needed to deal with the long-term consequences of climate change.
There are two main economic policies to ensure strong economic growth through which the government can respond to economic activity. Fiscal Policy and Monetary Policy.
ПОЛИТИКА, ЭКОНОМИКА И ИННОВАЦИИ № 4 (51), 2023
One of the most common ways governments influence a country's economic activity is by adjusting the cost of borrowing. Often, this is done by lowering or raising the federal funds rate, which is the target interest rate that affects short-term interest rates for loans such as consumer loans and credit cards. The Federal Reserve raises the federal funds rate to curb economic growth and lowers the federal funds rate to boost economic growth. Another form of monetary policy is the purchase and sale of government securities by the Federal Reserve. When the Federal Reserve buys securities from a bank, it injects money into that bank to increase the money supply. Alternatively, you can sell your shares to get rid of cash and reduce the money supply [6].
References
1. World Development Report www.worldbank.org
2. The role of Government www.economicsuk.com
3. Fiscal Functions of Government https://unstats.un.org/UNSDWebsite
4. Economic Policy https://en.wikipedia.org/wiki/Economic_policy
5. Monetary policy
https: //www.investopedia.com/terms/m/monetarypolicy.asp
6. Trade economics in whole world https://tradingeconomics.com
