I was thinking about a stock market for my nation
although we arent quite on our feet just yet, i was thinking that maybe a stock market would help. i have never experimented in or even seen such a market, what do you think it would do for my nations reasonable economy? or even for my peoples money problems?
or a better question would be, what is a stock market? i believe some nations have them, but what do they do?
Cookesland
14-01-2007, 16:08
A Stock market is used for buying and selling shares of a large businesses.
The largest RL one (i think) is the New York Stock Exchange (NYSE)
srry i can't really give you more info then that
Well, what he said. More crucially it is where shares are made public, for anyone with the means to buy. For instance Qantas is being bought over by a new bunch of investors who are planning to take it off the stock market, which means the shares are no longer publicly available. Companies principally sell shares to raise what is known as capital. For instance, since I'm already talking airlines, an airline could raise money to buy a new aircraft by selling its shares to investors, who in exchange for their money get a share in the company.
Now, as for its economic impact, it will likely promote investment and hence may help your economic development. But there's always a trade-off; people also speculate on stock markets, and due to their volatile nature they can destabilise your economy, which is not good. This can happen particularly if you're too liberal with foreign investment, and capital flight takes place for some reason and you then experience something like the financial crisis which took place in Southeast Asia in the late 90s.
As in all things in economics, there's a lot of ifs and balancing acts, but properly regulated stock markets are usually very beneficial. And of course you will get right-wingers and free-marketeers who claim no regulation is the best, but frankly I think they're completely wrong.
A Stock market is used for buying and selling shares of a large businesses.
The largest RL one (i think) is the New York Stock Exchange (NYSE)
srry i can't really give you more info then that
so it would more or less help my businesses?
Well, what he said. More crucially it is where shares are made public, for anyone with the means to buy. For instance Qantas is being bought over by a new bunch of investors who are planning to take it off the stock market, which means the shares are no longer publicly available. Companies principally sell shares to raise what is known as capital. For instance, since I'm already talking airlines, an airline could raise money to buy a new aircraft by selling its shares to investors, who in exchange for their money get a share in the company.
Now, as for its economic impact, it will likely promote investment and hence may help your economic development. But there's always a trade-off; people also speculate on stock markets, and due to their volatile nature they can destabilise your economy, which is not good. This can happen particularly if you're too liberal with foreign investment, and capital flight takes place for some reason and you then experience something like the financial crisis which took place in Southeast Asia in the late 90s.
As in all things in economics, there's a lot of ifs and balancing acts, but properly regulated stock markets are usually very beneficial. And of course you will get right-wingers and free-marketeers who claim no regulation is the best, but frankly I think they're completely wrong.
right, so i might want to wait a while until i get one.