Economic policy and economic analysis are closely related. All economic policies are adopted on the basis of economic theories. The creation of policies to achieve specific goals is not a simple matter.
First step is to make a clear statement about economic goals. If we say that we want full employment, do we mean that everyone between 16 and 65 years of age should have a job? Or do we mean that everyone who wants to work should have a job? Therefore economic goals must be specific.
Next step is to formulate alternative policies to achieve the goal and determine the possible effects of each policy. This requires a detailed assessment of economic impact, benefits, costs and political feasibility of alternative policies.
After implementing policy we need to check how well it worked. Only through unbiased evaluation we can improve on economic policy. These policies are augmented at a more specific level by measures designed for industrial investment, research and development and to protect consumer’s interests.
First step is to make a clear statement about economic goals. If we say that we want full employment, do we mean that everyone between 16 and 65 years of age should have a job? Or do we mean that everyone who wants to work should have a job? Therefore economic goals must be specific.
Next step is to formulate alternative policies to achieve the goal and determine the possible effects of each policy. This requires a detailed assessment of economic impact, benefits, costs and political feasibility of alternative policies.
After implementing policy we need to check how well it worked. Only through unbiased evaluation we can improve on economic policy. These policies are augmented at a more specific level by measures designed for industrial investment, research and development and to protect consumer’s interests.
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