Microeconomic and Macroeconomic Trends and Financial Regulation
Microeconomics and macroeconomics are two disciplines in economics that any economics student is very much familiar with. 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. There are many things that are affecting the financial regulation of the country. 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. In this set-up, profit maximization is the overall goal. Fixed costs and marginal costs are the two aspects that help businesses maximize their ability to make money. Essentially, you are looking at the world using the eyes of the CEO with the concept of microeconomics. It is the job of the CEO to do what they can for the benefit of the company for it to deliver value and make more money.
With macroeconomics, on the other hand, it appeals more to all the policy nerds. 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. You get a good competition between business establishments. What is bad for businesses will be oligarchies and monopolies. If you look at the world with macroeconomics, you are using the eyes of the government. 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. While efficient markets generally make everyone happy, the government must take the necessary steps that may go against the microeconomics of businesses to get there. Sometimes, competition can only be fostered when the financial industry finds a way to block the merger. Other times, there must be proper legislation of disclosures for both sellers and buyers to make informed decisions. At the same time, certain activities must be stopped or regulated so that some will not be harmed by others financially.
While it may be annoying to see the government and business sectors fighting over market regulations, it is expected. With a booming economy where everyone is happy, though, the fight between microeconomics and macroeconomics goes off temporarily. Businesses become happy when they are making money. Consumers having money also means that they are happy too. The government is also happy when everything in the system seems to work just good for all involved sectors.
Unfortunately, the ongoing financial crises have signaled the impending ruin of the financial services industry. Any market bubbles are the responsibility of government regulators. To secure the economy, the government must make sure to enact the necessary financial and securities regulations and measures.