The objective for the formulation of laws is to create propositions or hypotheses that in an abstract way cause an effect that allows predicting the studied phenomena and have universal validity, in addition to remaining in time. A determining element in all economic phenomena are rational human beings, since they have the ability to influence the events in which they participate, since they can govern the production, exchange and consumption of goods and services.
To formulate a law, a series of aspects are needed that must be fulfilled, which are:
- The initiative: it is when the law empowers a series of State bodies to present draft laws that can benefit a sector or population. In some countries of the world, those who have this power are the president of the republic, deputies and the regional legislative power.
- Discussion: it is when the parliament debates about the initiatives presented and thus determine whether or not they are approved. After a series of processes between reviewing and discussing, the moment is reached when it is approved and sent to the president of the republic that makes up the executive branch.
- Approval: for the normal course of the law to take place, it is necessary for the chamber to accept the bill in question, the approval of laws is done with a parliamentary majority and then sanctioned by the first president.
- Sanction: It is when the president of the country accepts the project presented and approved by parliament, although the Veto Law exists and it is when the president has the power to refuse to approve a law, returning to the chamber with observations to be reviewed and again discussed.
Published laws need to be in the public domain. Just as there are steps to formulate laws, there are also their types, among which are:
Causal laws: They are directly linked, since the other comes from one event and occurs over time. The first fact is known as the cause and the second, the effect. For example, as income increases, consumption increases, Laws of concomitance: they are laws that go hand in hand and are consistent with each other, since the facts appear together and constantly, such as inflation and unemployment.
Functional laws: they are when there is a relationship between two measurable quantitative facts, represented mathematically.
Regulatory laws: They are related to what should be in the economic sphere, that is, it is the ideal compared to reality, given that it determines how economic activities should be to reach the proposed end. For example, the law that establishes the minimum wage.
