What is the economic situation in the market? What is its significance in modern conditions?
general information
In a broad sense, when the economic situation is mentioned, then this means a certain set of conditions that have developed on the market at a given time. You can say a little bit differently. The economic situation is:
- The general situation of market relations that have developed at a given point in time.
- The list of factors and the impact on the functioning of a particular economy, in which internal and external causes interact.
In a narrower sense, a combination of some events or circumstances (for example, a crisis or critical state of a household, enterprise, sector, and the entire economy) can be implied. Thus, we can say that the concept of conjuncture includes a set of mutually related conditions that determine the transition of the object in question from one state to another. Depending on the subject in question, directions are divided. So, there is a conjuncture of the economy, individual commodity markets, and so on. Each of these areas is studying its own layer of economic life.
Cycling
This process underlies the functioning of the market. To understand the cyclical patterns in the development of the economy, it is not enough just to record price fluctuations and the movement of stocks. It is also necessary to know the characteristic signs and features of each phase, as well as the transitions between them. So, one situation is spoken about when the economy is in a state of crisis. A completely different state of affairs is observed with the rise of the economic sector. Each economic cycle has its own characteristics. Conjuncture, or rather its given direction, requires familiarization with academic literature in order to have a full understanding of this issue. But as an example, there are several special cases. So, let's imagine that we describe the current situation using the traditional aggregate supply curve. We consider a crisis situation. In this case, the curve will shift to the left and up (if compared with the rise). This is due to an increase in the size of production costs, which is expressed in constant prices. In other words, while maintaining the previous cost (adjusted for inflation) of product sales, the subject will be able to create a smaller volume of products. And now let's talk about the characteristics that the economic environment has.
Inconstancy and inconsistency
This is expressed in the variability of states and the frequency of oscillations. Some factors may affect the situation for a short time, while others have a wider impact. An example of volatility is the stock market. He reacts extremely quickly to even the most minor changes that occur in economics, politics, public life, and so on. Regarding the inconsistency, we can say that this is expressed in the fact that there can be indicators of both recession and rise. An example is the situation in the Russian Federation, which was in January-October 1997. Then there was an increase in GDP and an increase in industrial output. At the same time, there was a drop in production growth rates.
Unevenness and unity of opposites
Changes in the economic situation are not everywhere the same. If we talk about unevenness, then it can be noticed in those cases when the direction of growth dynamics of different indicators coincides, but at the same time the rates vary. In such cases, there are always more goods than the second. An example is Ukraine of 1996. So, more than 85% of all sold products accounted for the raw materials sector, which is very bad for the state. Regarding the unity of opposites, one can cite this. The war negatively affects trade and the development of the peaceful sector of the economy. But when in 1998 the political conflict in Iraq became more complicated, and the threat of invasion from the USA hovered over the country, the volume of demand jumped sharply. This is how economic conditions can depend on political realities. The situation in this case can have a very positive effect. So, at the end of the second millennium, the reserves of silver, which was required to create photographs, began to fall sharply. This prompted to create more rational and optimal digital cameras.
Features
When using elements of the analysis methodology, and then market forecasts, it is necessary to monitor the activities and the nature of the actions of cyclical factors. It is also necessary to take into account the causes and processes, the development of which, due to their nature, does not provide for repetitions in the implementation scheme. These are: inflation, scientific and technological progress, the militarization of the economy, the concentration of capital and production, and so on. In addition, social conflicts, natural disasters, speculative factors, emergency situations and the like can have an impact.
