What is economic policy?

By economic policy we understand that set of decisions that are taken by generally public bodies with the intention of making decisions and measures aimed at managing and controlling the economy of a country.

Thus, the concept of economic policy is carried out by parliaments and executive bodies of a similar nature. This economic term, What it intends is to analyze even the smallest detail that allows the economic development of a country and therefore its well-being.

2 things you should know about economic policy

To continue delving into the definition of economic policy, it is important to take into account certain particularities. The first of all is that economic policy comprises a single country, so economic policy can vary depending on each country and does not have to be common. However, there are issues related to the International Monetary Fund that can affect more than one country equally.

Second, it must be taken into account that economic policy is developed with different strategies, such as the set of Laws, investment in education, health or culture between different areas. In this way, what economic policy projects is an incentive for the country's economy, trying to be at the service of citizens, providing long and short-term resources to society as a whole, regardless of whether each institution is public or private .

What are the objectives of economic policy?

We have already commented on the first of the economic policy objectives, and that of economic growth and development. In addition to this, economic policy also seeks to keep the employment rate and the percentage of unemployed citizens as low as possible. For this reason, among the priorities of economic policy the creation of measures that promote employment is among its focuses of attention.

At the same time, economic policy seeks to ensure price stability in the market, that is, to avoid inflation. All of this will also allow for a better economic distribution of income. To achieve this, you must also take into account how to power against production among other factors.

The types of economic policy

When we talk about types of economic policy, we are talking about a classification based on the objectives pursued by each type of economic policy, and we find the following structure:

  • Fiscal policy: it is one that is in charge of collecting the impuestos, controlling the level of expenses and the level of income.
  • Income policy: it is the one in charge of regulating salaries in entities, regardless of whether they are public or private.
  • Foreign policy: it is in charge of controlling the political situation with respect to other countries. For example, trade relations related to exports and imports.
  • Monetary policy: it is the one that is in charge of the matters related to the interest ratesTherefore, its mission is to check that prices are stable.

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