ECONOMIC DICTIONARY PDF

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This book aims to cover the main aspects of the study of economics which The dictionary gives succinct explanations of the 3, most frequently found terms. Oxford Dictionary of Economics - an authoritative and comprehensive dictionary containing 2, key economic terms with clear, concise definitions. Complete economics dictionary to earn in tax revenues over the financial year. An actual budget deficit occurs if actual public spending exceeds actual tax.


Economic Dictionary Pdf

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This is the simplest yardstick of economic performance. . This prohibited contracts or conspiracies to restrain trade or, in the words of a later act, to monopolise. business finance, investments, financial planning, financial economics, and Dr. Shim is a coauthor of Encyclopedic Dictionary of Accounting and Finance;. PDF | Dictionary in Russian, Turkish, English and Turkmen Language.

It may be impossible to define the agent's job in a way that can be monitored effectively. For instance, it is hard to know whether a manager who has expanded a firm through an acquisition that reduced its share price was pursuing his own empire-building interests or, say, was trying to maximise shareholder value but was unlucky.

Another way to lower agency costs, especially when monitoring is too expensive or too difficult, is to make the interests of the agent more like those of the principal. For instance, an increasingly common solution to the agency costs arising from the separation of ownership and management of public companies is to pay managers partly with shares and share options in the company.

This gives the managers a powerful incentive to act in the interests of the owners by maximising shareholder value. But even this is not a perfect solution. Some managers with lots of share options have engaged in accounting fraud in order to increase the value of those options long enough for them to cash some of them in, but to the detriment of their firm and its other shareholders.

See, for example, Enron. Broadly speaking, governments have tried two methods of subsidising agriculture. The first, used in the United States during the s and in the UK before it joined the European Union, is to top up farmers' incomes if they fall below a level deemed acceptable. Farmers may be required to set aside some of their land in return for this support. The second is to guarantee a minimum level of farm prices by downloading up surplus supply and storing or destroying it if prices would otherwise fall below the guaranteed levels.

To keep down the direct cost of this subsidy the EU used trade barriers, including import levies, to minimise competition to EU farmers from produce available more cheaply on world agriculture markets. Recent American farm-support policy has combined income top-ups and some guaranteed prices. As most governments have become more committed to international trade, such agricultural policies have come under increasing attack, although the free trade rhetoric has often run far ahead of genuine reform.

Finding a way to end agricultural support had become by far the biggest remaining challenge for those trying to negotiate global free trade. Agriculture Farming around the world continues to become more productive while generally accounting for a smaller share of employment and national income , although in some poor countries it remains the sector on which the country and its people depend.

The total value of international trade in agriculture has risen steadily. But the global agriculture market remains severely distorted by trade barriers and government subsidy, such as the european union 's Common agricultural policy. Aid See international aid. Altruism It is often alleged that altruism is inconsistent with economic rationality, which assumes that people behave selfishly.

Certainly, much economic analysis is concerned with how individuals behave, and homo economicus economic man is usually assumed to act in his or her self-interest. However, self-interest does not necessarily mean selfish.

THE MIT DICTIONARY OF MODERN ECONOMICS - feskov.org

Some economic models in the field of behavioural economics assume that self-interested individuals behave altruistically because they get some benefit, or utility , from doing so. For instance, it may make them feel better about themselves, or be a useful insurance policy against social unrest, say. Some economic models go further and relax the traditional assumption of fully rational behaviour by simply assuming that people sometimes behave altruistically, even if this may be against their self-interest.

Either way, there is much economic literature about charity, international aid , public spending and redistributive taxation. Amortisation The running down or payment of a loan by instalments.

List of economic theories and definition pdf

An example is a repayment mortgage on a house, which is amortised by making monthly payments that over a pre-agreed period of time cover the value of the loan plus interest. With loans that are not amortised, the borrower pays only interest during the period of the loan and then repays the sum borrowed in full. Animal spirits The colourful name that keynes gave to one of the essential ingredients of economic prosperity: confidence.

According to Keynes, animal spirits are a particular sort of confidence, "naive optimism". He meant this in the sense that, for entrepreneurs in particular, "the thought of ultimate loss which often overtakes pioneers, as experience undoubtedly tells us and them, is put aside as a healthy man puts aside the expectation of death".

Where these animal spirits come from is something of a mystery. Certainly, attempts by politicians and others to talk up confidence by making optimistic noises about economic prospects have rarely done much good.

Antitrust government policy for dealing with monopoly. Antitrust laws aim to stop abuses of market power by big companies and, sometimes, to prevent corporate mergers and acquisitions that would create or strengthen a monopolist. There have been big differences in antitrust policies both among countries and within the same country over time.

This has reflected different ideas about what constitutes a monopoly and, where there is one, what sorts of behaviour are abusive. This prohibited contracts or conspiracies to restrain trade or, in the words of a later act, to monopolise commerce.

In the early 20th century this law was used to reduce the economic power wielded by so-called "robber barons", such as JP Morgan and John D. Rockefeller, who dominated much of American industry through huge trusts that controlled companies' voting shares. Du Pont chemicals, the railroad companies and Rockefeller's Standard Oil, among others, were broken up.

In the s a more laissez-faire approach was adopted, underpinned by economic theories from the chicago school. These theories said that the only justification for antitrust intervention should be that a lack of competition harmed consumers, and not that a firm had become, in some ill-defined sense, too big. Some monopolistic activities previously targeted by antitrust authorities, such as predatory pricing and exclusive marketing agreements, were much less harmful to consumers than had been thought in the past.

They also criticised the traditional method of identifying a monopoly, which was based on looking at what percentage of a market was served by the biggest firm or firms, using a measure known as the herfindahl-hirschman index. Instead, they argued that even a market dominated by one firm need not be a matter of antitrust concern, provided it was a contestable market. In the s American antitrust policy became somewhat more interventionist.

A high-profile lawsuit was launched against Microsoft in The giant software company was found guilty of anti-competitive behaviour, which was said to slow the pace of innovation. However, fears that the firm would be broken up, signalling a far more interventionalist American antitrust policy, proved misplaced.

The firm was not severely punished. In the UK, antitrust policy was long judged according to what policymakers decided was in the public interest. At times this approach was comparatively permissive of mergers and acquisitions; at others it was less so.

However, in the mids the UK followed the American lead in basing antitrust policy on whether changes in competition harmed consumers. Within the rest of the european union several big countries pursued policies of building up national champions, allowing chosen firms to enjoy some monopoly power at home which could be used to make them more effective competitors abroad.

However, during the s the European Commission became increasingly active in antitrust policy, mostly seeking to promote competition within the EU. In , the EU controversially blocked a merger between two American firms, GE and Honeywell; the deal had already been approved by America's antitrust regulators.

The controversy highlighted an important issue. As globalisation increases, the relevant market for judging whether market power exists or is being abused will increasingly cover far more territory than any one single economy. Indeed, there may be a need to establish a global antitrust watchdog, perhaps under the auspices of the world trade organisation.

Appreciation A rise in the value of an asset and the opposite of depreciation. When the value of a currency rises relative to another, it appreciates. Arbitrage downloading an asset in one market and simultaneously selling an identical asset in another market at a higher price. Sometimes these will be identical assets in different markets, for instance, shares in a company listed on both the London Stock Exchange and New York Stock Exchange.

Often the assets being arbitraged will be identical in a more complicated way, for example, they will be different sorts of financial securities that are each exposed to identical risks. Some kinds of arbitrage are completely risk-free-this is pure arbitrage. Today, a lot of so called arbitrage, much of it done by hedge funds , involves assets that have some similarities but are not identical.

This is not pure arbitrage and can be far from risk free. Arbitrage pricing theory This is one of two influential economic theories of how assets are priced in the financial markets. The other is the capital asset pricing model. The arbitrage pricing theory says that the price of a financial asset reflects a few key risk factors, such as the expected rate of interest , and how the price of the asset changes relative to the price of a portfolio of assets.

If the price of an asset happens to diverge from what the theory says it should be, arbitrage by investors should bring it back into line. Asian crisis During , many of the East Asian tiger economies suffered a severe finanical and economic crisis. This had big consequences for the global financial markets , which had become increasingly exposed to the promise that Asia had seemed to offer.

The crisis destroyed wealth on a massive scale and sent absolute poverty shooting up. In the banking system alone, corporate loans equivalent to around half of one year's GDP went bad - a destruction of savings on a scale more usually associated with a full-scale war. The colourful name that keynes gave to one of the essential ingredients of economic prosperity: According to Keynes, animal spirits are a particular sort of confidence, "naive optimism". He meant this in the sense that, for entrepreneurs in particular, "the thought of ultimate loss which often overtakes pioneers, as experience undoubtedly tells us and them, is put aside as a healthy man puts aside the expectation of death".

Where these animal spirits come from is something of a mystery. Certainly, attempts by politicians and others to talk up confidence by making optimistic noises about economic prospects have rarely done much good. Antitrust laws aim to stop abuses of market power by big companies and, sometimes, to prevent corporate mergers and acquisitions that would create or strengthen a monopolist. There have been big differences in antitrust policies both among countries and within the same country over time.

This has reflected different ideas about what constitutes a monopoly and, where there is one, what sorts of behaviour are abusive. This prohibited contracts or conspiracies to restrain trade or, in the words of a later act, to monopolise commerce. In the early 20th century this law was used to reduce the economic power wielded by so-called "robber barons", such as JP Morgan and John D.

Rockefeller, who dominated much of American industry through huge trusts that controlled companies' voting shares. Du Pont chemicals, the railroad companies and Rockefeller's Standard Oil, among others, were broken up. In the s a more laissez-faire approach was adopted, underpinned by economic theories from the chicago school. These theories said that the only justification for antitrust intervention should be that a lack of competition harmed consumers, and not that a firm had become, in some ill-defined sense, too big.

Some monopolistic activities previously targeted by antitrust authorities, such as predatory pricing and exclusive marketing agreements, were much less harmful to consumers than had been thought in the past. They also criticised the traditional method of identifying a monopoly, which was based on looking at what percentage of a market was served by the biggest firm or firms, using a measure known as the herfindahl-hirschman index.

Instead, they argued that even a market dominated by one firm need not be a matter of antitrust concern, provided it was a contestable market. In the s American antitrust policy became somewhat more interventionist. A high-profile lawsuit was launched against Microsoft in The giant software company was found guilty of anti-competitive behaviour, which was said to slow the pace of innovation. However, fears that the firm would be broken up, signalling a far more interventionalist American antitrust policy, proved misplaced.

The firm was not severely punished. In the UK, antitrust policy was long judged according to what policymakers decided was in the public interest. At times this approach was comparatively permissive of mergers and acquisitions; at others it was less so.

THE NEW PALGRAVE: A DICTIONARY OF ECONOMICS

However, in the mids the UK followed the American lead in basing antitrust policy on whether changes in competition harmed consumers. Within the rest of the european union several big countries pursued policies of building up national champions, allowing chosen firms to enjoy some monopoly power at home which could be used to make them more effective competitors abroad.

However, during the s the European Commission became increasingly active in antitrust policy, mostly seeking to promote competition within the EU. In , the EU controversially blocked a merger between two American firms, GE and Honeywell; the deal had already been approved by America's antitrust regulators. The controversy highlighted an important issue.

As globalisation increases, the relevant market for judging whether market power exists or is being abused will increasingly cover far more territory than any one single economy.

Indeed, there may be a need to establish a global antitrust watchdog, perhaps under the auspices of the world trade organisation. A rise in the value of an asset and the opposite of depreciation.

When the value of a currency rises relative to another, it appreciates. downloading an asset in one market and simultaneously selling an identical asset in another market at a higher price. Sometimes these will be identical assets in different markets, for instance, shares in a company listed on both the London Stock Exchange and New York Stock Exchange.

Often the assets being arbitraged will be identical in a more complicated way, for example, they will be different sorts of financial securities that are each exposed to identical risks.

Some kinds of arbitrage are completely risk-free-this is pure arbitrage. Today, a lot of so called arbitrage, much of it done by hedge funds , involves assets that have some similarities but are not identical.

This is not pure arbitrage and can be far from risk free. This is one of two influential economic theories of how assets are priced in the financial markets. The other is the capital asset pricing model.

The arbitrage pricing theory says that the price of a financial asset reflects a few key risk factors, such as the expected rate of interest , and how the price of the asset changes relative to the price of a portfolio of assets.

If the price of an asset happens to diverge from what the theory says it should be, arbitrage by investors should bring it back into line. During , many of the East Asian tiger economies suffered a severe finanical and economic crisis.

This had big consequences for the global financial markets , which had become increasingly exposed to the promise that Asia had seemed to offer. The crisis destroyed wealth on a massive scale and sent absolute poverty shooting up.

In the banking system alone, corporate loans equivalent to around half of one year's GDP went bad - a destruction of savings on a scale more usually associated with a full-scale war.

The precise cause of the crisis remains a matter of debate. Fingers have been pointed at the currency peg adopted by some countries, and a reduction of capital controls in the years before the crisis. Some blamed economic contagion. The crisis brought an end to a then widespread belief that there was a distinct "Asian way" of capitalism that might prove just as successful as capitalism in America or Europe. Instead, critics turned their fire on Asian cronyism, ill-disciplined banking and lack of transparency.

In the years following the crisis, most of the countries involved have introduced reforms designed to increase transparency and improve the health of the banking system, although some such as South Korea went much further than others such as Indonesia. When somebody knows more than somebody else. Such asymmetric information can make it difficult for the two people to do business together, which is why economists, especially those practising game theory , are interested in it.

Transactions involving asymmetric or private information are everywhere. A government selling broadcasting licences does not know what downloaders are prepared to pay for them; a lender does not know how likely a borrower is to repay; a used-car seller knows more about the quality of the car being sold than do potential downloaders. This kind of asymmetry can distort people's incentives and result in significant inefficiencies. When something unexpected happens that affects one economy or part of an economy more than the rest.

This can create big problems for policymakers if they are trying to set a macroeconomic policy that works for both the area affected by the shock and the unaffected area. For instance, some economic areas may be oil exporters and thus highly dependent on the price of oil, but other areas are not.

If the oil price plunges, the oil-dependent area would benefit from policies designed to boost demand that might be unsuited to the needs of the rest of the economy. This may be a constant problem for those responsible for setting the interest rate for the euro given the big differences--and different potential exposures to shocks--among the economies within the euro zone.

Going, going, gone. Holding an auction can be an extremely efficient way for a seller to set the price of its products, especially if it does not have much information about how much people may be willing to pay for them.

Auctions fascinate economists, especially those who specialise in game theory. They have long been a feature of the sale of art and antiques in the rooms of firms such as Sotheby's and Christie's. But in recent years they have played a growing role in other parts of the economy, ranging from the allocation of government -controlled broadcasting bandwidth to the awarding of work to subcontractors by governments and big firms using competitive tendering, and even more recently the sale of goods over the Internet.

An English auction is the most familiar. Bidders compete to offer higher prices and drop out until only one remains. In a Dutch auction, the auctioneer calls out a high price then keeps lowering it until there is a downloader. There are various forms of sealed bid auctions. In a first price sealed bid, each downloader submits a price in a sealed envelope and all bids are opened simultaneously, with the highest offer winning.

In a second or third, fourth, and so on price sealed bid, the highest bidder wins but pays only the second third, fourth highest price bid. An English or Dutch auction will work well for a seller if there is more than one serious bidder, as competition will ensure that the price is set at the level at which it is not worth more to any other bidder but the winner.

Indeed, in a competitive auction the successful bidder may end up offering more than what is being auctioned is actually worth.

This is known as the winner's curse. Which method will generate the best price for the seller depends on how many bidders take part and how well informed they are.

Unfortunately for the seller, this information is not always available before the auction takes place. A brand of neo-classical economics established in Vienna during the late 19th century and the first half of the 20th century.

It was strongly opposed to Marxism and, more broadly, to the use of economic theories to justify government intervention in the economy. Prominent members included Friedrich hayek , Joseph schumpeter and Ludwig von Mises.

It gave birth to the definition of economics as the science of studying human behaviour as a relationship between ends and scarce means that have alternative uses. Austrian economic thinking was characterised by attributing all economic activity, including the behaviour of apparently impersonal institutions, to the wishes and actions of individuals.

It did this by examining choices in terms of their opportunity cost that is, what is the next best use of resources to that which is being considered?

Hayek correctly predicted the failure of Soviet-style central planning. His ideas are said to have inspired many of the free-market reforms carried out during the s in the United States under Ronald Reagan and in the UK under Margaret Thatcher. Schumpeter developed a theory of innovation and economic change characterised by the phrase creative destruction.

The idea that a country should be self-sufficient and not take part in international trade. The experience of countries that have pursued this Utopian ideal by substituting domestic production for imports is an unhappy one. No country has been able to produce the full range of goods demanded by its population at competitive prices. Indeed, those that have tried to do so have condemned themselves to inefficiency and comparative poverty, compared with countries that engage in international trade.

A number that is calculated to summarise a group of numbers. The most commonly used average is the mean, the sum of the numbers divided by however many numbers there are in the group.

The median is the middle value in a group of numbers ranked in order of size.The first, used in the United States during the s and in the UK before it joined the European Union, is to top up farmers' incomes if they fall below a level deemed acceptable.

All these cultural elements are learned through interaction with others in the culture see Focus on Culture 1. Harris Abstract Focused on the emerging conditions of industrial capitalism in Britain in their own time, the classical economists were able to provide an account of the broad forces that influence economic growth and of the mechanisms underlying the growth process. Current edition contains expanded coverage of common econometric concepts and highlights major theoretical concepts including agency, competition, equilibrium.

Some economists reckon that advertising merely manipulates consumer tastes and creates desires that would not otherwise exist. Economics focuses on the behaviour and interactions of economic agents and how economies work.