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10/21/24

The Economics of Suits

Author: Dhruv Kumar
Editor: David Sun

Throughout the well-known series Suits, featuring the famous Mike Ross and Harvey Specter, economics is seen throughout! Although the show primarily deals with lawsuits, economics is a huge part of it. 

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In numerous Suits episodes, corporate clients deal with many government investigations. This ties into how the government influences the economy and how it can stimulate the economy in times of need. They often ensured that no insider trading (illegal buying/selling stocks based on private info) occurred, and all stocks were traded based on public knowledge. Additionally, whenever the economy has a recessionary gap, there can be tax cuts or increases in government spending to stimulate the economy back to equilibrium (aggregate demand and supply are equal).

Furthermore, there are many instances where companies compete with each other, trying to outsmart each other in the market. This reflects market structures, such as oligopolies (a few firms dominating an industry) or monopolistic competition, where businesses differentiate themselves to capture market share.

 

Some clients in Suits are multinational corporations involved in international trade and commerce. The legal challenges they face, including tariffs, foreign investment, and international regulations, reflect global economic dynamics, which are part of open economy macroeconomics. One factor that may affect their business depends on the interest rates seen in foreign countries. Countries with higher interest rates tend to have more investment; whereas, countries with lower interest rates will not have as much. 

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