Mainland And Hong Kong Stock Market Of Government Regulation In A Comparative Study

The regulation of the securities market has long been a controversial issue in western countries. When Classical Economics dominated the economic theory, government took least measures to intervene the economic policy, which is defined as"lassies-faire"state. However, with the development of industrial revolution, new technologies and scientific inventions are utilized to the production process. And at the same time the defects of free economy emerge, as the problem of monopoly, externality, etc., which can't be avoided by market economy itself. The pure market-oriented economy not only has its own limitations, but has the market failure problems. The internal malfunction and external conditions result to the market failure in resource allocation in certain areas: the adverse externalities, monopolistic operation and production, scarcity of the supply of public good, transaction under asymmetric information, income gaps and fluctuations of macro-economy etc.The economic crisis of 1929 brought great impact on the developed countries, which made spaces of new economic theories to combat the crisis. Keynesian Economics shoot up. The US policy of Roosevelt is based on the Keynesianism. Except for the policy to stimulate the macro economy, it also emphasizes on the regulation of public sectors. The core value of Keynesianism is the intervention of government, especially the expansive effect of spending deficit to aggregate demand. When the economy is lack of aggregate demand, which means the production is under the level of potential activities, the expansion of government purchase will increase the demand. So from then on, many western countries gave up the policy of"lassies-faire"and turned to expansionary intervention policy, which lead the government took a lead in various aspects of economic intervention.With the development of microeconomics, economists focus their attention on the welfare of producers and consumers, the necessity of government regulation and related performance. Theories of natural monopoly, externalities, economics of welfare, game theory and information economics provides solid foundation and analytic methods for government regulation.Efficient government and appropriate market mechanism are the two supporting...