Economic policy

The economic policy is the whole of the interventions of the Public administrations (of which the State, the Central bank, and the territorial collectivities) on the Economic activity.

The study of the economic consequences of these interventions is generally called the political economy . It represents a vast branch of the Economic scene, in particular in the fields of the Macroéconomie, of the economy of the development and the optimal Taxation.

Stakes of the economic policy

The economic policy is more and more a stake of Souveraineté, insofar as the economy took a determining place in the life of the countries, especially the most developed. Among the economic sectors most touched by the stakes of sovereignty, one will retain particularly the defense, the energy (Security of supply), the data-processing Ingénierie (material and Logiciel).

In contemporary economic theory, any economic policy implicitly must or explicitly to face the difficulties raised by the theorems of the economics of welfare, the theorem of Coase as well as the Critique of Lucas. These three elements of economic theory indeed respectively underline the effectiveness of the allowance by the market, the flexibility of the Contrat S taking into consideration political measure and finally the importance of the opportunist behaviors of the agents vis-a-vis any form of economic policy.

The Employment Policy often took an important place in the economic policies (in particular in France starting from the end of the Glorious Thirty). One often uses the terms of “Politique of the request” and “Politique of the offer”.

So the contemporary economic policies aim

is to be cured failures of market (if the market for a good does not exist, which prevents mutually advantageous exchanges, or if a defect of information led to not-optimal balances) or to limit the disturbances introduced previously by the State;
is to be carried out Redistribution S vis-a-vis a balance considered as too inequitable, or to support certain social categories;
is to be made that the action of the State supports the initiatives of the other economic agents (legal and tax stability for example).

In each case, the awaited results must be placed against the behaviors of Recherche of revenue ( rent-seeking ) created by the distortion introduced by measurement itself.

Tools of the economic policy

Traditionally, the economic Theory, Macroeconomics at the head, concentrated on the instruments of Monetary policy and the Budget policy . The monetary policy consists in particular in the fixing of the directing Taux, the budget policy relates to the distribution of the Taxes and social security deduction (Customs duties, Taxe S) and their assignments: subsidies, etc

Recent research proposed the existence of a very broad range of instruments having an effect of economic policy.

Thus, the imposition of Importation quota, or rules of Concurrence are instruments of economic policy being able to have very fine effects.

The development of Norme S of quality can have a determining influence on the markets, as from the moment when a standard is binding on the international community, as one saw with the prohibition of access of the Harmony to the the United States. Other examples are provided by the data-processing Langages, the Operating systems of the Ordinateur S, the Norme S of Information system security…

In the same way, the role of the State S is often essential in the definition of the Property rights, in particular of Intellectual property, and the extension of the respect of these rights. Reflections are in hand since the Années 1990 on the rules of accounting of the immaterial Capital.

The role of the State S is essential in the support for the Exportation of large the Entreprise S. This type of policy appeared with the the United States as of the end of the Années 1980, with Advocacy center. The State S are based in this case on their network Diplomatique, and on specific competences. In France, for example, there exist Postes of economic expansion.

Lastly, it should be noted that the majority of the large developed countries set up policies aiming at developing Poles of competitiveness on the territories, on the model of the American clusters, whose prototype is the Silicon Valley (see ICT Cluster Silicon Valley).

Method of the economic policy

Schematically, an economic policy proceeds in three distinct phases:

the State (i.e. the government) must establish a diagnosis of the current economic conjuncture. It must in particular take into account certain important indices: the growth rate of GDP, the Unemployment rate, the rate of Inflation…
Once the established diagnosis, it must define the priorities which its policy will adopt. Indeed, an economic policy can be centered only on certain main aims (among most current appear the fight against unemployment, the retry of the growth, or the fight against inflation), the other objectives being blow necessarily relegated to the second plan, or neglected.
the State must then decide tools which will enable him to implement its action to achieve the goals that it set.

See too

Policy mix
political Economy
Budget policy
Political of the economic situation
Employment Policy
Monetary policy
Austerity measure Macroeconomics

; In France: Head office of the Treasury and the Economic policy (DGTPE)

External bonds

site of students on the Economic policy