Sample interview questions: How do you assess the potential economic impact of changes in government regulations?
Sample answer:
1. Analyze the Nature of the Regulatory Changes
- Classify regulations as pro-business, pro-labor, pro-environment, or consumer-focused.
- Assess the magnitude of the regulatory changes: are they comprehensive overhauls or targeted modifications?
- Consider the industries, sectors, or regions likely to be affected.
2. Measure the Impact on Economic Actors
- Microeconomic Analysis:
- Study how businesses and individuals respond to new regulations.
- Analyze changes in production costs, prices, revenue, and profit.
- Assess the impact on employment, wages, and consumer behavior.
- Macroeconomic Analysis:
- Measure the effect on overall economic growth, inflation, and unemployment.
- Examine the effects of regulatory changes on investment and innovation.
- Analyze the impact on international trade and global competitiveness.
3. Regulatory Impact Assessment (BIA) Method
- Cost-Benefit Analysis:
- Monetizing the costs and benefits of regulation to compare them.
- Use market data, surveys, and econometric models to quantify impacts.
- Cost-Effectiveness Analysis:
- Assess the lowest-cost methods to achieve regulatory goals.
- Analyze the trade-offs between different regulatory options.
4. Computable General Equilibrium (CGE) Models
- Construct mathematical models of the economy to simulate regulatory changes.
- Capture interdependencies between industries, sectors, and regions.
- Assess the economy-wide effects of regulatory policies.
5. Case Studies and Empirical Analysis