Microeconomic and Macroeconomic Trends and Financial Regulation
Ask any economics student about the disciplines of economics, and they will tell you that these two are microeconomics and macroeconomics. And unfortunately, both disciplines are no fan of each other. In present times, the hammer will drop at any minute in the financial services industry. What the country is going through in terms of financial regulation is unlike what is has been through in the past. It is only in present years in the financial services industry that two major forces are clashing with each other. The area that most business students tend to gravitate toward is microeconomics. For this business area, people strive toward maximizing their profits. Fixed costs and marginal costs are the two aspects that help businesses maximize their ability to make money. Simply put, microeconomics views the world using the eyes of the CEO. A CEO does the best that they can for the company to deliver value and make more money.
For people who are particular with policy, though, what attracts them the most will have to be macroeconomics. For such an economic discipline, the primary goal is to attain market equilibrium. This implies that whatever services or goods are in the greatest number, they can be exchanged at prices that are mutually agreed by both sellers and buyers. There is good competition between businesses in this set-up. The use of oligarchies and monopolies is bad. It would seem like you are seeing the world using the eyes of the government with macroeconomics. This means that it tries to make everyone happy or perhaps equally unhappy.
By looking at the differences of these two perspectives, you know very much that they will be going against each other. Even if most individuals agree that everyone can benefit from efficient markets, it is not all the time that the government must side with microeconomic business interest when they take the essential steps to benefit everyone. Sometimes, competition can only be fostered when the financial industry finds a way to block the merger. Sometimes, there must be proper legislation of disclosures so that informed decisions are made between buyers and sellers. Imposing prohibitions and regulations for certain activities may also be necessary so that some will not be put to harm financially.
You can always expect the government and business sector to fight over market regulation extent. With a booming economy where everyone is happy, though, the fight between microeconomics and macroeconomics goes off temporarily. When businesses make money, they become happy. Consumers are equally happy too because they have money. The government is quite happy because the system is working just fine for everyone.
However, with recent financial crises, the financial services industry may get lost and damaged. It is the job of government regulators to keep track of these market bubbles. The government is also responsible for providing proper financial and securities regulations and measures that will help save the economy and keep it running for long.