In the market economy, state regulation of the economic situation is a regulatory, legislative, executive measures that are implemented by state competent authorities and public organizations in order to stabilize, optimize and adapt the existing economic system to changing market conditions.
The functions of the state in a market economy are mainly aimed at regulating the market situation in such a way as to maintain an optimally productive balance in the economic and social environment. In addition, the functions of the state in a market economy cover such areas of activity as stimulating economic growth, regulating employment, encouraging positive shifts in the economic structures of industries and regions, and supporting exports.
For the countries of the former socialist camp, the functions of the state in a market economy were especially clearly manifested during the transition from a planned economy to a market economy, which should have been based on a new form of ownership - private.
The subjects of economic policy are the spokesmen, carriers and, at the same time, the executors of economic interests. The objects of state regulation of the economy are sectors, spheres, regions, situations, conditions and phenomena of socio-economic life, in which certain difficulties and problems arise that cannot be resolved automatically and require intervention.
The functions of the state in a market economy in regulating its condition are manifested through the impact on objects such as the economic cycle, employment, conditions for the accumulation of capital, balance of payments, competition conditions, economic structures (sectoral, regional, sectoral), social security, prices, money circulation, retraining personnel, research work, environment, social relations, foreign economic relations , etc.
The infrastructure of a market economy is a complex of industries and spheres of activity of a production and non-production nature that ensure the full functioning of the market. It includes banks, stock exchanges, insurance companies, intermediary structures, consulting, marketing, audit organizations, transport, means of business communication, information systems, a training system, etc. All these institutions through their activities facilitate the implementation of commodity exchange, increase the efficiency of individual elements of the economy. In Russia, most of these elements are in the process of improvement, and some are still in the making.
The state acts on the market economy to maintain social and economic stability, strengthen the existing system and adapt it to any changes within the country or taking into account the international situation.
During crises, the state seeks to stimulate consumer activity and demand for goods, encourage investment and control employment. Private capital is provided with financial incentives. In a situation of prolonged economic growth, the state should, on the contrary, slow down the growth of demand, production and capital investment in order to prevent overproduction and over-accumulation of capital, which could lead to a crisis of overproduction in the future.
The state regulates the economy through various means: administrative (not related to material incentives and based on prohibitions and coercion) and economic. The latter include monetary policy and budget policy.