What is the financial accelerator?

Financial accelerator is a concept that has to do with moving on financial markets. This concept essentially claims that by making deliberate changes in the market, it is possible to influence the future movement of this market, sometimes accelerate or accelerate the movement in the desired direction. The general idea with a financial accelerator is to assess where the market is currently standing, identifying the direction that would be best for all involved, and then find out what changes would move the market more quickly in this direction.

There are a number of ways to use the concept of a financial accelerator. Governments will often use this basic strategy to try to grind the economy in a certain direction. For example, the government may decide to work in its central bank to raise or reduce interest rates as a means of moving one or more markets in the economy desirable. By making small changes that, in turn, influence how Vdividual and companies participating in the economy spend money can be movedUT of the national economy from an undesirable phase that would include a recession, still avoiding the extreme move that would lead to high inflation.

In the best case, the financial accelerator serves as a means to maintain the economy on a stable course without having to withstand extreme shifts that can cause a large amount of emergency. Although the circumstances are too advanced to avoid the recession or period of inflation, the use of a type of financial accelerator can reduce the effect of this unfavorable period, allowing only minimal discomfort to withstand households and industrial industries. As a result, it is less likely that households will experience events such as mortgage seizure, while companies can be able to go through the period without shutdown of the device or having for release or firing a significant amount of labor.

the key to useThe financial accelerator is the exact assessment of current market conditions and to show the direction in which the economy moves without any intervention. From there it is possible to determine the result of the current movement and decide whether to introduce a small change in order to either speed up the desired result or move the economy in the direction that is more desirable. Before using any type of financial accelerator to the market or markets within the economy, it is necessary to pay attention to the fact that the wrong calculation could result in the threatening poor situation.