Philosophy of the Economy Part Four - "Parameters" As Tools of Economics

in Economy

The role of "Parameters" is to prevent the "Negative" "Build up" of "Energies" in Economy and in these way oversee and avoid catastrophic Economic recessions.

The main difference of such parameters to the already used tools of Economics is more practical and purely technical approach promoted by this research and the political and ideological approach used until now by the real Economics.

Example #One: The Real Estate bust provoking the Last Recession could be prevented if proper regulations were implemented.

Example #Two: The Real Estate Capitalization before the Last Recession had a positive effect on the Economy to certain point by pouring capital in the Capital Markets and investing in business development which consequence huge economic growth before it turned into negative effect , hence, if then an overregulated Economy could be a stopper and a negative.

Hence, same regulations could have a positive effect or a negative effect on Economic development under different circumstances.

Second set of examples:

Example #One: the Governmental takeover financial institutions and even large corporations could be having a very negative effect on the real Economy by interfering with the Market forces.

Example #Two: the Governmental takeover of financial institutions and even large corporations could prevent the Economy from collapsing in a point when the whole Economy is at stake.

Hence, under different circumstances different the tools of Economics play in different ways.

Third set of examples:

Example #One: The Chinese Government socialization of the Medical services and redistribution of Wealth had a very negative effect in the 50s and 60s which lower Chinese productivity and economic development.

Example #Two: Current Chinese Government socialization of the Medical services and redistribution of Wealth has a positive effect for overall Chinese development by expending the overall Economy.

Hence, social services and redistribution of wealth by the Governments could have different effect on the overall development under different circumstances.

Fourth set of examples:

Example #One: The subsidies of the Auto Industry by the US Government in the past has given the Big Three a false sense of security and added in consequence to their demise.

Example #Two: The subsidies of the Auto industry by the US Government most recently is turning them around.

Hence, subsidizing industries as a tool of Economics could effect Economy in different ways under different circumstances.

Many more examples could be given to prove that same tools of economics could have different effect on the processes in the real economy under different circumstances, therefore to govern and regulate the economy in static ways could prevent growth in economy under some conditions and provoke recessions instead under different conditions. Thus, the parameters of economics should be flexible to reflect the changes in the real economy: from one side not to limit growth under proper conditions and from another side to raise flags and prevent overextension and the following recessions under different conditions.

The tools of Economics in a ever-changing Global Market could be used as parameters only when a appropriate concept ional statistical system of evaluation of the economic processes is used in which these parameters are taken in a practical matrix.

When for example:
social wealth distribution is appropriate for balancing Supply to Demand and other Market forces it should be non political issue such to be implemented in the opposite when social redistribution of wealth turns the point from a positive to a negative effect on the Economy such redistribution must be limited appropriately.

Any time effect of different "Tools of Economics" on the real economy could be appropriated by using statistical means and then the following changes of the "Parameters" should be implemented to minimize the negative effect of build ups.

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Joshua Konov has 1 articles online

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Philosophy of the Economy Part Four - "Parameters" As Tools of Economics

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This article was published on 2010/03/30
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