Topple Rate
Categories: Credit
For the past ten years, Happy Motors, Inc. has been the #1 automobile producer in the country. But Happy Motors isn’t the only game in town anymore—there are two other automobile companies that have been picking up steam over the past few years, and now it looks like one of them, Ecstaticar, is poised to dethrone Happy Motors and take over as the nation’s new #1. In other words, Happy Motors is about to get toppled. And while this might not make the folks at Happy Motors all that…uh…happy, topples like this one can be a sign of a strong and competitive economy.
It’s not all that unusual for a handful of companies to dominate a particular industry within a particular country. But economists like to look at an industry’s “topple rate”—the frequency at which the leaders of a given industry change—as a way of assessing market health. The thinking is that the more competition and toppling and dethroning we see within a particular industry, the more robust and competitive it is. And in many cases, that can be a good thing for the economy as a whole.
