André Kostolany: This is how the government controls the economy like a driver controls his car.

André Kostolany: This is how the government controls the economy like a driver controls his car.

According to a report by www.capital.de, legendary investor André Kostolany wrote columns for Capital for more than 30 years. Some of his texts are documented in a series. In May 1972, Kostolany explained what monetary policy and driving have in common.

The government controls the economic development of a country like a driver controls his car. It exercises control with the help of the two pedals, gas and brake, by pumping or siphoning money into the economy. As any good driver knows, the steering should be enough to keep the car under control. This would correspond to the government's fiscal policy if it wanted to keep the economic wheel at the right speed with the help of tax cuts or tax increases. But the government is not sovereign when it comes to tax policy. In democratic countries it depends on parliaments and voters, and is therefore exposed to a fair amount of demagoguery.

These metaphors from Kostolany illustrate the economic mechanisms in a simple and clear way. In fact, monetary and fiscal policy is a central instrument that significantly influences economic development. Incorrect or injudicious use can lead to inflation, recession or other economic problems. It is therefore essential that the government and other institutional actors carefully consider the impact of their economic policy decisions.

The metaphor of driving a car also illustrates the importance of the government making confident and thoughtful decisions, particularly regarding tax policy, in order to keep the economic wheel moving at the right speed. However, in democratic systems this is often a complex and challenging task because political decisions are shaped by different interests and opinions.

It remains to be hoped that decision-makers are aware of this importance and implement their economic policy measures with caution and foresight.

Kostolany's analyzes continue to offer us valuable insights into economic policy and stimulate reflection on balance and responsibility in political decision-making processes.