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. Consequently, 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 a usual practice for regulators to evaluate the cost-benefit of the regulatory suggestions. The essence of such evaluation is to determine the trade-offs related to regulatory action and suggest alternative solutions. Regulators rely on economic principles when developing…
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 the 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…
Uses of Self-regulation
Self-regulatory bodies exist in industries such as financial markets. These regulatory bodies are commonly known as self-regulating organizations (SRO’s). 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 making sure that there is healthy competition. Antitrust laws protect the consumers from predatory business operations and maintain fair competition in…
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: 1. Protection of…
Economic Rationale for Regulatory Intervention
A regulation can be defined as the form of government intervention in a market that deals with rules and their enforcement. It may occur proactively in forecasting future market changes or reactively as a result of a market occurrence, such…
Growth in an Open Economy
An open economy allows trade and finance to flow freely. Opening an economy has a significant impact on economic growth. Impact of Open Economy on Economic Growth Countries can adopt technology. This way, they increase technological development and hence the…
