Global Macroeconomic Policy: Impact on Emerging and Advanced Economies

This article discusses the impact of global macroeconomic policies on emerging and advanced economies. It covers the influence of development and growth within the developing economy and the stock market boom in advanced economies. The article also explains the concepts of aggregate demand and supply, inflation, fiscal and monetary policies, and their effects on the economy. The article concludes with a list of references for further reading.

GLOBAL
MACROECONOMIC
POLICIES

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Due to the continuous growth in emerging and developing markets the price of the
commodities such as oil increases...............................................................................................3
Stock market boom in advanced economies...............................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Macro economics refers to the Study of behavior which includes the concern of various
events that are level of unemployment, general changes in the prices and the total available
amount of commodities for the further sale. Fiscal policy and monetary policy are the 2
significant tools of macroeconomics that analyze the government spending and the supply of
money within the economy. These are the factors which ensure the effective consideration in the
target market and leads to maintain the equilibrium in the economy. This aspect will cover the
influence of development and growth within the developing economy & also cover the stock
boom in the advance economy with the advantage of concern policy and it's response to the
target market in contexts to the macroeconomics. This is been done with the use of aggregate
demand and supply in the market.
MAIN BODY
Due to the continuous growth in emerging and developing markets the price of the commodities
such as oil increases.
Growth in economics refers to the increase in the overall production of goods and services in
comparison to the past years and it can be vary in upcoming days. This is being evaluated with
the help of real and nominal terms. In previous time, An economy is being evaluated with the
help of gross national product. It is defined as the subject matter that analyze the rise in the
overall production in the economy but It leads the aggregated demand to gain effective
production that is completely related to the average marginal productivity of products and
services. These aspects help in increasing the income level of the buyer by which they are free
to buy the product and services according to their choices and preferences backed with the
sufficient purchasing power which also ensure the quality of life and the living standards.
This is being evaluated by one of the report that India is among the fastest growing economy
in the world and it is setting the best example of emerging developing countries in the globe.
This is to be noted that India is hit hard by the Ovid-19 pandemic and faces huge losses in the
market. Moreover with the help of domestic vaccination camp, somehow they manage to recover
with the current time so that they can is competitive enough in the emerging market. It is being
analyzed with the trade data that they are encouraging the investors to invest more and export so
that they can ensure the economic growth in the year.

Aggregate demand refers to the sum total of given goods and services that are being
consumed by the buyer in the economy. Whereas, aggregate supply explains the sum total of
quantity of product and services that are available for the further sale in the target market or can
be said that it measures the total available products and services or the total demand of particular
goods and services that are being available in the economy. It analyze how they both interact
with the economy. AD-AS model refers to the price level and the output with the better
relationship of aggregate demand and supply. This respective theory is proposed by John
Maynard Keynes. In relation to the enhancement of the growing market that leads to increase the
chances of inflation in the market as well. It is also called as the wrong a allocation of money
that is being done by the people as people are not having sufficient income level so who are rich
becoming more rich & who are poor becoming more poor, it is the state of inflation. It will be
understand with the help of given curve:
This can be said that from the above curve that increase in the income level of the consumer
impacted overall growth of the economy. It is also seen that with the increase in the inflation,
there is a huge inflationary gap in the businesses. Rise in the overall flow of commodities in the
market, they are not having appropriate development in the economy due to the wrong allocation
of income among the different group of people.
Furthermore, inflation defines as the reduction in the overall buying behavior or the
purchasing power of the currency in a particular period of time. It is also evaluated that

quantitative and qualitative estimate of rate and the current trend that are reducing the overall
purchasing power of the consumer by which they cannot retain in the market in long run. It is
also significant for the economy to analyze the state of inflation by which they can ensure the
better working and have good results within the organization that leads to huge success and
growth. Inflation can leads to minimize the overall economic development by which nation can
go in the period of a recession which leads to have unemployment in the economy.
This particular policy is being made by the government and the central bank of the
country which ensure the effective flow of money with the better implementation that of such
approaches in the market. This also ensure the accomplishment of such task with the proper
follow-up of rules and legislation so that they can minimize the inflationary gap within the
economy. This also leads to get good results which leads to have more development and growth
in the market. This also ensures huge profitability for the entrepreneurship. With this, all the
actions can be taken in an appropriate manner and fiscal policy is being used by the economy so
that they can manage the inflation in an appropriate manner. Furthermore, An organizations and
the people are granting more loans when the interest rate are not higher so that government can
have the effective working and measures the ways to sustain in the economy for long period of
time and ensure the growth and development. This also leads to have effective operations of the
government in an appropriate direction. This respected policy ensure the better management by
changing the overall allocation of expenditure and the taxes of the government. For controlling
the inflation, the government increases the overall interest rate on the same side, they can
minimize their subsidies by which overall expenditure of the government can be minimized in
the target market and in such way they can enjoy the success and growth in the developing
economy.
Merits of fiscal policy, it helps in reducing the unemployment in the country and when there
is huge unemployment in the economy the government need to make some fiscal policy in which
increases the expenditure or the acquisition with the downfall in the taxation in an appropriate
manner. For meeting the overall demand of the economy, it will lead to increase the production
and manufacturing so that they can introduce more job opportunities and also measure the fiscal
policy the nation can have huge development and growth for them.

Stock market boom in advanced economies.
It is clear from the above given phrase that that “advance economy”, are the more
developed economies that are not under development. It is also classified as the effective
economic developed nation with the sophisticated technical infrastructure built by the
government of a nation. It is the word that is being used by the International monetary fund in
order to designate the most developed and advanced country in the world. When the nation is
having sufficient income level by so that they can establish the growth and development in the
market. It is also clear that when the nation is having higher capita income, they can finance
various sectors so that they can ensure global financial system in the market. Moreover, the
economy suffers from the huge inflation that does not meet the overall consideration of the
economy. In context to such economics, Inflation is the most desirable approach that can lead to
increase the overall gross domestic product of the country but on the same hand, inflation
increases over a certain amount that is 3% having significant influence on the net disposable
income of the buyer. It leads to have inflation in the economy under control by which they can
maintain the overall functionality of the business. There is a rise in the stock market then the
prices of the product and service tends to rise with the increase in the purchasing power of the
consumer which result in boom in the stock market. It is the stage in which the country is having
boom in the stock market.
With the better understanding of aggregate demand and aggregate supply, It needs to
have specific claim that when the respective demand increases in parallel line with the rise in the
income level then there is the huge change and the entire area demand is given in diagram.

It is being analyzed from the above given graph that with the increase in the buying
power there is a change in the aggregated demand and the inflation in which the respective
demand car shift from D to D1 that is showing the increase in the total spending power of the
buyer. Somehow that leads to increase the given prices of the product in the target market and it
makes difficult for the buyer to purchase goods
Monetary policy shows the investment and the overall spending of the buyer which
results of expansionary monetary policy. In such consideration the bank, they reduces their
interest rate on mortgage or Loan by which they can inspire the new entrepreneur to grow in the
market and also ensure better working in the economy. Contradictory monetary policy is the type
of economic policy that focuses on the total available amount of money in the country for the use
of people. The main purpose of this policy is to manage the overload inflation within the
economy. When, there is a fall in the monetary policy for controlling the overall inflation, it
leads to increase the borrowing rate from the bank and also tends to minimum supply of money
in the economy.
CONCLUSION
From the above report, it is concluded that macroeconomics is the aspect which ensure the
better flow of good and services in the economy as a whole. Also ensure the effective utilization
of available resources. In developing economy, there is a overall consideration of the interest rate
and the aggregated demand will be moved the market as the consumer will have more
purchasing power which can lead to have prominent market. It is also suggested that overall
overall progression of cash is the main look out of the consumer and the economist.

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