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…
Antitrust Regulation
Antitrust regulation is the law a government introduces to balance the share of economic power in business by ensuring healthy competition. Antitrust laws protect consumers from predatory business operations. In addition, they maintain fair competition in an economy. Anticompetitive Behaviors…
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. It involves 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 (2022 curriculum)
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…
The Rationale for Government Incentives and Growth in an Open Economy
An investment incentive is a government-sponsored policy aimed at promoting start-ups or encouraging existing firms to either expand or not move to another country. The incentive can be financial interventions such as reduced tax rates, grants, infrastructural development, and free…
Convergence Hypotheses
Convergence refers to a situation where countries with low per capita incomes grow faster than countries with high per capita incomes. Consequently, with time, the per capita income for developing countries converges with that of developed countries. Types of Convergence…
Effects of Potential GDP Growth Rate on Equity and Fixed Income
GDP is important because it controls inflation’s effects on an economy. If the real GDP growth is higher (lower) than the potential growth rate, the inflation rate will increase (decrease), affecting the nominal rates and bond prices. Moreover, potential GDP…
