Question

What is deregulation? Name some industries that have been deregulated in the United States.

Short answer

Deregulation is the process of removing or reducing government regulations and restrictions on a specific industry or market to promote competition, increase market efficiency, and benefit consumers. Examples of industries deregulated in the United States include the airline industry (Airline Deregulation Act of 1978), telecommunications industry (Telecommunications Act of 1996), energy industry (through actions by the Federal Energy Regulatory Commission since the 1980s), the banking industry (Gramm-Leach-Bliley Act of 1999), and the transportation industry (Motor Carrier Act of 1980 and Staggers Rail Act of 1980).

Step-by-step solution

Define Deregulation

Deregulation is the lifting or elimination of government regulations and restrictions on a specific industry or market, with the aim of promoting competition, increasing market efficiency, and benefiting consumers.

Examples of Industries That Have Been Deregulated in the United States

The following are some examples of industries that have experienced deregulation in the United States: 1. Airline Industry: The Airline Deregulation Act of 1978 eliminated government control over fares, routes, and market entry for new airlines. This led to more competition, lower airfares, and an increase in the number of flights and routes available. 2. Telecommunications Industry: The Telecommunications Act of 1996 was a major overhaul of US telecommunications law that aimed to increase competition in the industry, particularly for local phone service. It eliminated many barriers to entry and allowed for greater competition between telephone, cable, and internet service providers. 3. Energy Industry: The Federal Energy Regulatory Commission (FERC) has been gradually deregulating the electricity and natural gas industries since the 1980s. This has led to open-access transmission systems and the creation of competitive wholesale electricity markets. 4. Banking Industry: The Gramm-Leach-Bliley Act of 1999 repealed parts of the Glass-Steagall Act of 1933, which separated commercial banks from investment banks and insurance companies. This deregulation allowed for increased competition between financial institutions and the creation of financial conglomerates. 5. Transportation Industry: The Motor Carrier Act of 1980 deregulated trucking and bus industries, allowing for more competition and innovation in the sector. The Staggers Rail Act of 1980 deregulated various aspects of the railroad industry, including rate-setting and route-planning, which allowed for greater operational flexibility for railroads.