Neomercantilism is a term used to describe a political system that encourages exports and discourages imports, controls on capital flows and currency centralizes decisions in the hands of a central government. The objective of neo-mercantilist policies is to increase the level of foreign reserves held by the government, allowing more effective monetary policy and fiscal policy. It is generally believed to come at a price of the declining standard of living that would bring an open economy at the same time, but it offers the advantages for the government to have greater autonomy and control. China, Japan and Singapore are described as neo-mercantilist. It is called neo- due to the shift of mercantilism classic on military development, economic development, and its acceptance of a higher level of market price determination that the interior is true classic mercantilism.
Its policy recommendations sometimes echo the mercantilism of early modern times. These are generally protectionist measures in the form of high tariffs and other import restrictions to protect domestic industries combined with government intervention to promote industrial growth, especially in manufacturing. At its simplest level, it proposes that economic independence and self-sufficiency are legitimate objectives of a nation to pursue, and protective systems are justified in order to enable the country to develop its industrial and commercial infrastructure to the point where it can compete on an equal footing in international trade. In macroeconomic terms, it underlines a fixed currency and autonomy over monetary policy on the mobility of capital.
Its policy recommendations sometimes echo the mercantilism of early modern times. These are generally protectionist measures in the form of high tariffs and other import restrictions to protect domestic industries combined with government intervention to promote industrial growth, especially in manufacturing. At its simplest level, it proposes that economic independence and self-sufficiency are legitimate objectives of a nation to pursue, and protective systems are justified in order to enable the country to develop its industrial and commercial infrastructure to the point where it can compete on an equal footing in international trade. In macroeconomic terms, it underlines a fixed currency and autonomy over monetary policy on the mobility of capital.
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