What do stock markets do?
Religion & Liberty Online

What do stock markets do?

Note: This is post #89 in a weekly video series on basic economics.

A company can raise money and create new investment by selling shares through an initial public offering (IPO). When you buy a company’s shares on the stock market, though, no new investment is created. So what exactly do stock markets do?

In this video by Marginal Revolution University, Alex Tabarrok explains how stock markets serve as a financial intermediary and serves as a key institution encouraging new businesses.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Click here to see other videos in the Introduction to Economics series.

Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).