Considerations When Evaluating the Effects of Regulation
The laws and regulations in a market can take different structures. Further, the laws can affect industries and individual companies differently. Therefore, regulation analysts need to understand and predict the impact of proposed new regulations. Similarly, they should analyze varying…
Benefits and Costs of Regulation
It is usual for regulators to evaluate the cost-benefit of the regulatory suggestions. Such evaluation aims to determine the trade-offs related to regulatory action and suggest alternative solutions. Regulators rely on economic principles when developing methods to measure a regulation’s…
The Regulatory Tools
The regulatory and government policies should be predictable, contemplative, and effective in reaching their goals. This is because it is challenging for any business entity to operate in an environment governed by an uncertain regulatory system. In other words, regulators…
The Regulatory Interdependencies
Regulated bodies in a market react differently to new proposed regulations. They often fight new rules but not outrightly since such wars easily attract public attention. However, according to the regulatory capture theory, laws work in the best interest of…
Growth Accounting Relations
Growth accounting relations is a quantitative model Robert Solow developed in 1957. It is used to measure the effect of different factors of economic growth. In addition, it indirectly estimates the technological progress in an economy. In other words, it…
Theories of Growth
There are three growth theories based on the per capita growth in an economy: The classical growth theory. The neoclassical growth theory. Endogenous growth theory. The Classical Theory (Malthusian Theory) Thomas Malthus developed the classical growth theory in 1798. The…
Effects of Investment in Physical Capital, Human Capital, and Technological Development on Economic Growth
Human Capital Human capital is the amassed knowledge and skills that the labor force reaps from education, training, or life experiences. In other words, human capital is the “labor quality of the labor quantity.” Better educated and skilled workers will…
Capital Deepening and Technological Progress
Capital deepening is a condition in which an economy’s capital per worker (capital-labor ratio) is rising. The rate of change in the capital stock per labor hour. measures capital deepening. On the other hand, technological progress is the innovation of…
Uses of Self-regulation
Self-regulatory bodies exist in industries such as financial markets. These regulatory bodies are commonly known as self-regulating organizations (SROs). SROs are non-governmental organizations that possess the authority to create and implement independent industry and professional regulations and standards. Unlike the…
Classifications of Regulations and Regulators
The regulators in the market can broadly be classified into those governed by legislative bodies and those produced by the market voluntarily. Let’s look at the types of regulators and their corresponding regulations. Types of Regulators and Regulations 1. Government…
