Economy means how to spend resonable money of ordinary human in his country against inflation .Now big giant countries like America,and euorope as they are suffering alot,now how to control economy of the world?
There are a variety of methods used to control the real economy in the world, and these methods can differ depending on the economic system and the goals of those in power. Here are a few examples:
1) Monetary policy: Central banks, such as the Federal Reserve in the United States, can control the real economy by adjusting the money supply and interest rates. By increasing or decreasing the amount of money in circulation and adjusting interest rates, central banks can influence the level of economic activity, inflation, and other key economic indicators.
2) Fiscal policy: Governments can also control the real economy through fiscal policy, which involves adjusting government spending and taxation. By increasing or decreasing government spending and taxes, policymakers can stimulate or slow down economic activity and influence factors such as employment and inflation.
3) Industrial policy: Some countries may use industrial policy to control the real economy by promoting certain industries or sectors over others. For example, a government may provide subsidies or tax incentives to encourage the growth of a particular industry, such as renewable energy or high-tech manufacturing.
4) Trade policy: Governments can also use trade policy to control the real economy, by imposing tariffs or other restrictions on imports and exports. This can protect domestic industries, but can also lead to trade wars and other negative consequences.
Overall, there is no one method of controlling the real economy in the world, and different countries and economic systems may use different approaches depending on their specific circumstances and goals.
@Tareq Alasadi
Production of basic needs in the country helps control inflation such as food and other items.
Free trade failed in developing countries since the large quantity imported from other countries reduced production capacity. Back to production culture and containing the economy to the degree of essential requirement of the country will save the people from hunger in times of crisis.
I think most economists would say that we do not control the world economy; rather, we influence it with our public policies.
Different countries and their widely differing policies have various levels of influence, and some nations try to control more tightly. No nation is completely "laissez faire", and no nation is completely controlling - although some nations do attempt to reach one or the other extreme approach.
That said, Lazaro ATHANAS Mwonge and Peterson K. Ozili have given the general categories of public policies that exert such influences. (Some might argue that Industrial Policy and Trade Policy are mostly fiscal in nature, but such approaches also create institutions that have additional influences on behavior.
What aspects of the real economy are you talking about? I'll give a general answer.
The short answer is: you can not control the real economy since you can not control the actions of all the actors in the economy.
You can influence those actors and somewhat try to steer the real world economy. To be effective in that one needs to have knowledge of behavioural sciences and nudging, not just economical models.
A couple of things that can work:
- Monetary policy set by central banks.
Setting interest rates make borrowing money more or less attractive. However, this is a measure that still depends on the willingness of the economic actors to borrow money. If they believe they can leverage the loan to make enough profits to pay off the loan and have spare profits left then they will borrow. Loans usually serve anticipated economic growth or large private acquisitions such as houses or cars.
Interest rates are not the only tools though. Quantitative easing has been used quite a lot during the pandemic and central banks are now executing quantitative tightening. The effects of QT were mainly inflated financial markets and governments elevating their debt levels in order to support businesses and citizens. What the effect of QT will be remains to be seen, but in a slow growing economy it might lead to a debt crisis (https://doi.org/10.3390/jrfm14070335).
In the end, monetary policy, as we know it today, is often a weak nudge. Raising interest rates can slow down the economy significantly though but the effects are not instantaneous and the exact outcome is very hard to predict.
- Monetary systems, which are essentially also monetary policies.
The way monetary systems are designed have a big influence on how people behave. It's an aspect that does not get enough attention today. Experiments with local currencies her already proven that behaviour can be changed on a local scale. Well designed, scalable, novel monetary systems could prove to be a stronger nudge than monetary policy with the boundaries of our current monetary system.
- Laws and regulations.
If they can be enforced, these are probably the most direct tools to control the real economy. The caveat though is that they might create opposition from businesses or the population. Hence fierce lobbying from large businesses to influence which laws and regulations come into effect.
In the end it's all about human behaviour within the context of the ruling systems. What incentives are present and what opportunities can be achieved with those incentives?
Dear stef,thankyou .but if we dont control ,the developed and less developed countries and millions are in danger .see more inflation and poverity,hunger and violences and wars increased.
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