Overview: Social Stability. Unstable economies are often characterized by inflation, which is a decrease in the value of money. Government prepares the budget for fulfilling certain objectives. The variables affecting stability include inflation, recession, policy changes, political situation, global market, and fiscal deficits. Economic sustainability creates a stable economy, . Read key findings from the Global Competitiveness Report 2019 For example, the economy of the United States can be negatively affected by factors within this country as well as by factors in other countries. Eventually, the supply increased and the demand for these homes dropped, causing the ''bubble to burst.'' All rights reserved. Budget Deficit Causes & History | What is Fiscal Deficit? Ability-to-Pay Principle of Taxation | Theory, Analysis & Examples. Finally, increasing tax rates will reduce aggregate demand and slow down economic growth because there is less money in the pockets of consumers. Thailand Overview: Development news, research, data | World Bank So among the total of 177 countries, South Sudan is the most unstable nation. [wbcr_snippet id="84501"] Stabilization policies are commonly used by countries to control the economy. Summary Monetary Policy Report submitted to the Congress on February 19, 2021, pursuant to section 2B of the Federal Reserve Act. People stayed broke for years after that, and where there was no money to spend, there could be no economic stability. Although the term is often used in discussions of short-term economic performance, in the context of economic theory it generally refers to an increase in wealth over an extended period. Broadly speaking, there are three main methods according to which a government can go about stabilizing fluctuations in an economy - during recessions or just to build on the current stability of the economy. Specific agencies or foundations, both government and private, devoted to collecting or studying economic data, or commissioned with the job of supplying a good or service that is important to the economy of a country.