Political stability is a situation characterized by the preservation of an intact and smoothly functioning government or political system, avoiding significant disruptions or changes over an extended duration. Political stability signifies a state of tranquility, organization, and sustained continuity within the political domain. It is marked by consistent institutions and policies, as well as a commitment to upholding the rule of law.
Societies with political stability experience a decreased probability of encountering major political upheavals, civil unrest, or sudden changes in leadership. Political stability is essential for a nation’s development, economic growth, and social unity. It enables long-term planning, investment, and prosperity, as businesses and citizens can rely on consistent governance and policies.

A 2024 study examining Central Asia identified several factors that influence stability. The research finds that rule of law, personalist rule, media freedom, freedom of assembly, political polarization, and gross domestic product (GDP) growth had positive effects on political stability. On the other hand, government accountability, exclusions by social group, and civil society participation were associated with negative effects on stability.

Economic stability

Economic stability is the absence of excessive fluctuations in the macroeconomy.^[1][2] An economy with fairly constant output growth and low and stable inflation would be considered economically stable. An economy with frequent large recessions, a pronounced business cycle, very high or variable inflation, or frequent financial crises would be considered economically unstable.

Economic Stability in Robotics refers to the role robotic technologies play in supporting consistent economic growth, productivity, and sustainability. By automating tasks, robots increase efficiency, reduce production costs, and enhance output quality, which helps businesses remain competitive in global markets. In sectors like manufacturing, logistics, healthcare, and agriculture, robotics minimizes downtime, improves supply chain reliability, and optimizes resource use. This stability also attracts investments, fosters innovation, and creates new markets for advanced technologies. However, achieving true economic stability with robotics requires balancing automation with workforce development, ensuring that job displacement is addressed through training and new employment opportunities. Ultimately, robotics can drive steady economic progress while maintaining resilience against market fluctuations.

Effects

Economic instability can have a number of negative effects on the overall welfare of people and nations by creating an environment in which economic assets lose value and investment is hindered or stopped. This can lead to unemployment, economic recession, or in extreme cases, a societal collapse.

Measures

Real macroeconomic output can be decomposed into a trend and a cyclical part, where the variance of the cyclical series derived from the filtering technique (e.g., the band-pass filter, or the most commonly used Hodrick–Prescott filter) serves as the primary measure of departure from economic stability.

A simple method of decomposition involves regressing real output on the variable “time”, or on a polynomial in the time variable, and labeling the predicted levels of output as the trend and the residuals as the cyclical portion. Another approach is to model real output as difference stationary with drift, with the drift component being the trend.

Causes

Macroeconomic instability can be brought on by the lack of financial stability, as exemplified by the Great Recession which was brought on by the 2008 financial crisis.

Monetarists consider that a highly variable money supply leads to a highly variable output level. Milton Friedman believed that this was a key contributor to the Great Depression of the 1930s.

John Maynard Keynes believed, and subsequent Keynesians believe, that unstable aggregate demand leads to macroeconomic instability, while real business cycle theorists believe that fluctuations in aggregate supply drive business cycles.

Stabilization policy

When a stabilization policy is implemented, it generally involves the use of either monetary policy or fiscal policy. Either of these may be advocated by Keynesian economists. However, they are generally opposed by monetarists and real business cycle theorists. Monetarists believe that well-intentioned countercyclical monetary policy will generally be counterproductive, adding to the existing variability of real output, and real business cycle theorists believe that such policies are misguided because they do not address the underlying causes of fluctuations, which they believe lie on the supply side of the economy.

Automatic stabilizer

In macroeconomics, automatic stabilizers are features of the structure of modern government budgets, particularly income taxes and welfare spending, that act to damp out fluctuations in real GDP.

The size of the government budget deficit tends to increase when a country enters a recession, which tends to keep national income higher by maintaining aggregate demand. There may also be a multiplier effect. This effect happens automatically depending on GDP and household income, without any explicit policy action by the government, and acts to reduce the severity of recessions.Similarly, the budget deficit tends to decrease during booms, which pulls back on aggregate demand. Therefore, automatic stabilizers tend to reduce the size of the fluctuations in a country’s GDP.

Transfer payments

Most governments also pay unemployment and welfare benefits. Generally speaking, the number of unemployed people and those on low incomes who are entitled to other benefits increases in a recession and decreases in a boom. As a result, government expenditure increases automatically in recessions and decreases automatically in booms in absolute terms. Since output increases in booms and decreases in recessions, expenditure is expected to increase as a share of income in recessions and decrease as a share of income in booms.