| The Economy of the UK and Kazakhstan Essay Good thesis writing Essay done for you
The UK fiscal policy refers to the alteration of government spending that is directed at achieving macro-economic objectives through change in the composition and level of aggregate demands within the country. The economy of the UK is the sixth in largeness as compared to the rest of the world measured through its Gross Domestic Product. When measured by the purchasing power parity (PPP), the country is the eighth in the world economies. In Europe, the economy of the UK is third when measured by GDP and second when measured by PP levels.
The UK fiscal policy is divided into two main subdivisions in Fiscal drag and Fiscal boost. Fiscal drag refers to direct tax rates that are progressive in nature. They slow down a rapid increase of the national income. As the levels of income rises, its balance is brought with taxations that are proportional to the overall income. The poor and the developing populations are given a chance to expand on their capabilities because they come off benefits while starting to pay tax. Therefore, the entire working of the fiscal drag moderates the increase in disposable income. Since 1997, the UK has experienced top-rated taxpayers. This means that fiscal drag has been extended.
The UK fiscal boost prevents a potential rise and decrease in the level of the national income. Fiscal boost refers to a state where income falls with proportional payments in taxes. The results build up moderated economy even during times of downturn. Falling income results in increased unemployment. The unemployed and the poor do not have to pay for the tax and hence benefit from the fiscal policy measures.
The UK government spends money for a number of reasons. The main areas of pending, as indicated during the 2011 financial year were on welfare and pensions as in health, social security, public order, and education.
The economy of Kazakhstan is the largest in central Asia. The economy, unlike that of the UK, is boosted by the massive influence of oil reserves and minerals. Moreover, it boasts of an increased agricultural activity in the region. The current GDP has reduced by 26% as appeared in the 90s. Since 2000, the economy of Kazakhstan has grown rapidly because of increase in prices of its exports in oil, grain, and metals. The GDP grew by a margin of 9.6% in 2000. This growth and that of the subsequent years is the highest in the world. Because of its engagement in business with Russia and China, the country has experienced a positive rise in the economy by a margin of 10.6%. The growth in the economy led to an increase in the national budget from a cash deficit of 3.7% in 1999 to 0.1% in 2000.
As at 2011, the fiscal policy of Kazakhstan had to be tightened. The sluggish performance of the policy is accrued to reduced export gap that makes the fiscal policy decidedly liberal. Increase in risks could deter equitable performance of the fiscal policy unlike that of the United Kingdom. Between 1997 and 1998, the GDP of the country rose with a percentage of 16.6%. Within the industrial sectors, the national output increased in mining, growth of primary metals, and natural gases.
The UK monetary policy is managed largely by the bank of England. The bank participates in cutting the interests rates to a low level in order to drop under performance avenues in the national monetary policy. Further measures are used in to boost on the overall performance of the national monetary policy. Unlike that of Kazakhstan, the UK monetary policy is integrated. The monetary policy needs increased quantitative easing through printing of more money. The recent news from the bank indicated that the national economy needed close to 150 billion GDP within the levels of new money to be pumped into the economy.
The bank of England has various responsibilities over all the financial institutions in the country. The bank offers monetary assistance in terms of loans and capital injections that balance the national monetary policy. The bank acquires treasury bills from the government and thus helps to finance stimulus package that limits crowding of private borrowers. The monetary policy is responsible for monetary stability through stable pricing, low inflation, and confidences in the currency. Since the inception of the monetary policy committee, the interest rates have been balanced as shown in the graph.
In Kazakhstan, the monetary policy has been managed well. During the financial hard times as in 2006, inflation was steady at 8.6%, up from 7.5% in 2005. The rates of inflation between 2001 and 2003 were 6.4%, 6.6%, and 6.8%, respectively. The country has a strong macroeconomic performance in the national and international market. Moreover, the sector of finance and health has received a massive boost from the strong economic management. In 2000, the country became the first nation to repay the International Monetary Fund (IMF) its debts. The U. S department of finance has appreciated and rated Kazakhstan as one of the strongest monetary performers in the global economy. Apart from thriving in the market, the country has succeeded in reducing impacts of negative GDP in its economy.