Intervention
Intervention is a financial term used to describe a situation in which a government or central bank takes action to influence the economy or a specific market. This action can be in the form of monetary policy, fiscal policy, or other measures. Intervention is often used to stabilize a currency, reduce inflation, or to stimulate economic growth. It can also be used to protect domestic industries from foreign competition.
History of Intervention
The concept of intervention has been around since the early days of economics. In the 19th century, governments began to intervene in markets to protect domestic industries from foreign competition. This was done through tariffs, subsidies, and other measures. In the 20th century, governments began to intervene in markets to stabilize currencies and reduce inflation. This was done through monetary policy, such as setting interest rates and controlling the money supply.
In the 21st century, governments have continued to intervene in markets to stabilize currencies, reduce inflation, and stimulate economic growth. This has been done through a variety of measures, including quantitative easing, fiscal stimulus, and other measures. Governments have also used intervention to protect domestic industries from foreign competition.
Comparison Table
| Type of Intervention | Purpose |
|---|---|
| Monetary Policy | Stabilize currency, reduce inflation, stimulate economic growth |
| Fiscal Policy | Stimulate economic growth, reduce unemployment |
| Protectionism | Protect domestic industries from foreign competition |
Summary
Intervention is a financial term used to describe a situation in which a government or central bank takes action to influence the economy or a specific market. This action can be in the form of monetary policy, fiscal policy, or other measures. Intervention is often used to stabilize a currency, reduce inflation, or to stimulate economic growth. It can also be used to protect domestic industries from foreign competition. For more information on intervention, please visit the websites of the International Monetary Fund, the World Bank, and the Federal Reserve.
See Also
- Monetary Policy
- Fiscal Policy
- Quantitative Easing
- Fiscal Stimulus
- Protectionism
- Currency Stabilization
- Inflation Targeting
- Exchange Rate Management
- Capital Controls
- Macroeconomic Policy
