The theory of economic regulation George J. Stigler The University of Chicago The potential uses of public resources and powers to imrtprove the economic status of economic groups (such as industries anid occupa-tions) are analyzed to provide a scheme qf the demand for regulation. It is intended to explain the "supply," "demand," and practical use of government regulatory power over the economy. Government regulation of the U.S. economy has expanded enormously over the past century, prompting business complaints that interventions impede growth and efficiency. Economic Regulation. A successful regulatory framework requires an appropriate balance to be struck Other forms include public expenditures, taxes, government ownership, loans and loan guarantees, tax expenditures, equity interests in private companies and moral suasion. This is known as market liberalization. The theory of economic regulation is an economic theory developed by George Stigler. Regulation - economic and other regulation; Governments may also reserve the right to regulate certain activities for economic, social or other purposes. Economic regulation, a form of government intervention designed to influence the behaviour of firms and individuals in the private sector. It has been much less applied to social regulation, although by 1992 it seems clear that in comparison with other Regulation may be used to introduce fresh competition into a market – for example breaking up the existing monopoly power of a service provider. Transportation economics - Transportation economics - Transportation regulation and deregulation: For many years, the economic practices of much of the transportation system in the United States were regulated. The government may wish to regulate monopolies to protect the interests of consumers. In particular, Stigler examines the various ways in which disparate interest groups are able to influence and use government power to advance their economic needs. A good example of this is the attempt to introduce more competition for British Telecom. For example, monopolies have the market power to set prices higher than in competitive markets. Today, interstate pipeline and some interstate railroad traffic is regulated, as is intrastate motor carriage in most states. Principles for Economic Regulation Contents ... For example, ensuring a system that is adaptable and fully coherent with policy Government may present a challenge to maintaining its stability and predictability. The economic approach to law has been applied in great detail to economic regulation and deregulation, to the point where knowing some economics is indispensable for anyone trying to do serious policy research in the area. We follow conventional treatment in distinguishing economic regulation from a ... examples of the use of different types of data and measurement techniques. Problems that regulators of markets / industries can face For example, in the case of natural monopoly, where there is no competitive market to curtail the market power of the monopolist, economic regulation can help ensure that the prices paid by consumers are reasonable and reflect the efficient costs of providing on-going and reliable services. economic regulation. railroads, airlines). In the transportation sector, for example, many industries have market structures that inherently limit entry and can lead to concentration or monopoly (e.g. These Economic regulation sets prices or conditions for firms to enter a specific industry. 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