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) The classical growth theory, developed by Thomas Malthus in 1798,…
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 types of regulations. Types of Regulators and Regulations…
Antitrust Regulation
Antitrust regulation is the law introduced by a government to balance the share of economic power in business by ensuring healthy competition. Antitrust laws protect consumers from predatory business operations and maintain fair competition in an economy. Anticompetitive Behaviors Many…
Regulation of Commerce and Financial Markets
As seen in the previous LOS, regulation is a form of government intervention in a market. Regulation deals with rules and their enforcement. Purposes of Regulation of Financial Markets The reasons for financial market regulations include: Protection of Consumers and…
Economic Rationale for Regulatory Intervention
A regulation can be defined as a form of government intervention in a market dealing with rules and their enforcement. It may occur proactively in forecasting future market changes or reactively as a result of a market occurrence, such as…
The Rationale for Government Incentives and Growth in an Open Economy
An investment incentive is a policy executed by the government to promote the start-up of new businesses or encourage existing firms to expand or not to move to another country. The incentive can be financial incentives such as reduced tax…
