Questions tagged [definition]

Questions about how economic terms, quantities, or ideas can be defined.

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What is “industrial capitalism”?

What's the difference between "industrial capitalism" and "agrarian capitalism" and "mercantilism" and the "industrial revolution" and the 20th century ideas of "Keynesianism"? Is agrarian capitalism-...
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How to interpret the (expected) exposure and CVA of an option or a single share

I have a quick (hopefully simple) question regarding the interpretation of the expected exposure of a call option and a single share. I've done some computations on the formula for the expected ...
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60 views

Difference between shocks, innovations and disturbances

In macroeconomics and macroeconomic models, shocks, innovations, and disturbances are very prominent and often mentioned in the literature. In general, is there a difference between macroeconomic ...
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What is meant by “resource base” in this sentence?

I read a sentence in a chapter in my book which was: The emphasis on developing a resource base also meant that export-oriented growth was limited. I googled the for the term "resource view". But ...
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208 views

What is the proper term for “contraction economics?”

By "contraction economics" I mean theories and work based on the assumption that the population of a country will decline over time. An example might be a paper looking at the housing market for ...
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Meaning of $dF(z)$ in expected utility framework

Background: from a Microeconomics course, $F$ is a cdf. In other words, if $F$ has a density function $f$, then $$F(z)={\int_{-\infty}^z f(x) dx} $$ Write the Bernoulli utility function $u:...
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283 views

Are social goods and public goods the same thing?

I am confused as to they are the same or different?
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65 views

Why is it called Bayesian Persuasion?

I'm sure most of you are familiar with the paper titled "Bayesian Persuasion" by Kamenica and Gentzkow (2011), (you can find it here). I was wondering what are your thoughts as to why it is called "...
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Is rent on a relocation — an example of unfunded liability?

I'm not too sure if the question makes much sense, but let's assume that you get a job offer in SF, and in order to accept, you basically have to sign a 6- or 12-month contract for rent in order to be ...
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Lifeboat vs bailout

I have encountered the term lifeboat in these two contexts: Floating a “lifeboat”: The Banque de France and the crisis of 1889 The 1974 rescue in the UK's secondary-banking crisis. Is the term ...
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75 views

Preference relations defined by $x_1^n + x_2^n$ converge to $\max\{x_1, x_2\}$

In the problem set 2 of Rubinsteins Microeconomics (btw is there a comparably nice written book on macroeconomics?) there is the following question: Let $\succ_n$ be the preference relations defined ...
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866 views

Is there a general name for the setup in which payoffs are not known exactly but players try to influence each other's perception of the payoffs?

A recent question elsewhere made me look at the "madman strategy" which actually consists of trying to make the opposite player think that he is playing a game of chicken instead of prisoner's dilemma....
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What is the opposite of debt?

In trade, the opposite of trade deficit is trade surplus. In other words, the negative deficit is called surplus. And then, what is the term for negative debt? Say for example Bank A owes 5 million ...
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60 views

Is there a term for the personal wealth that is not used to generate income?

A rich person can own companies, shares, houses used for renting etc. that are worth billions of $US. That is the wealth that is generating income. I would call it income-generating wealth or income+...
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32 views

What's the term for the debt you have to pay today?

Say that a company has a debt of 10 million $US But from that debt, the company has to pay 2 million $US today. The rest of the debt has to be payed next year and later. Is there a term for the debt ...
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64 views

In the context of banking, how (if at all) do the terms 'capital', 'net worth', and 'equity' differ?

In banking, are the three terms capital, net worth, and equity simply identical and exact synonyms? If not, how do they differ? (Aside: And what about in other contexts? For example, does the same ...
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594 views

What would you call a real market that is close to perfect competition?

I want to explain perfect competition to students using a few practical examples without going into much of the theory. But I want it to be theoretically accurate and I don't want to claim that those ...
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23 views

What are the definitions of the terms value, wealth, and utility in economics?

Are there any definitions for the following three terms that are widely agreed upon in economics? Value Wealth Utility In particular, are these terms identical? If not, what differentiates them? I ...
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31 views

What is the difference between personal consumption expenditure price and PCE quantity?

What is the difference between these two things? How is PCE price different from PCE quantity? Also, I am confused about the difference between PCE quantity and measure of real output. For example, ...
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22 views

Why is a call option called 'call', and put option called 'put'? [closed]

I'm asking about etymology, and not what these options are. The answers beneath don't feel convincing; can't 'call' and 'put' be interchanged in them? I'll abbreviate Call Option to CO, and Put Option ...
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51 views

Is there a super term for goods/products and services?

A business can sell "goods" (/"products") and "services". Is there a term that encompasses both of these? Various words may fit (e.g. "offering"), but I'm looking for the technical term, if there is ...
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22 views

What are 'Symmetric Agents' vs. 'Asymmetric Agents'?

Here is a contextual example from Landry et. al. 2006 : We concentrate on an economy with n symmetric agents who derive utility from consuming a numeraire good, yi, a public good at level G, ...
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Synonyms for One-to-One Matching Mechanisms

I am trying to find a more elegant usage of wording for one-to-one matching and I am need of some thoughts from others. Bilateral matching? Any help would be respected.
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504 views

Is there any formal definition of a relationship between resource availability and demand?

I do not have any background on economics. So my question might sound too simple and I hope it to be clear enough. I am curious about the following: Is there any formal definition of a relationship ...
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247 views

What is the definition of distributionally neutral tax?

On the website https://www.core-econ.org/ in the book provided, there is an exercise 19.10. It asks whether poll tax is progressive, regressive or distributionally neutral. To answer this question of ...
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431 views

What is the “entry price” in relation to tariffs?

I see the term “entry price” and “price entry system” in relation to tariffs. What do these means? For example this document: https://ageconsearch.umn.edu/bitstream/10095/1/sp06go22.pdf
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31 views

What is a digital platform?

In context of European research projects, they invest into development of digital platforms. Here is a source to give a definition but not really, and every time people refer directly or indirectly ...
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61 views

Why was the term 'Economic Rent' chosen? How does it relate to the ordinary meaning of 'rent'?

Pindyck, Rubinfeld. Microeconomics (2017 9 ed). pp. 314-315. Etymonline substantiates that 'rent' originally didn't mean the microeconomics meaning overhead: no surprise, as microeconomics is a ...
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61 views

Explain some All countries excluding residents in BIS Debt Securities Data

In the BIS Debt Securities statistics: In both column "issueresidence" and column "issuenationality" there is a category called "All countries excluding residents". I do not understand what it means. ...
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51 views

When can a person be called rich?

What is the common definition for economic richness of a person? When can you say John Doe (hypothetical name) is rich (objectively)? Strictly economically speaking, no philosophical debate.
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376 views

What does Marx mean by “the division between capital and labor”?

I am reading an eight page piece called "Labor Alienation" by Karl Marx for my Literature class. Here's a link to it if you would like to read it: http://www.yavanika.org/classes/reader/marx1.pdf In ...
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what is the difference between microeconomics and microfinance?

what is the difference between microeconomics and microfinance? I cannot understand the difference between the two terms
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55 views

Economics term for unfavorable goods

What are called goods, whose maintenance expenses are higher than initial price tag. There is a specific term for that, but I can't find it.
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What's the term for an economic policy that has negligible effect for most, but a significant effect for a few?

I remember this came up around tariffs in the US on aluminum. They have a negligible effect on the price of an aluminum can, but aggregated across all the aluminum cans sold, it can have a significant ...
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2k views

What is Opportunity Cost?

Suppose you have 2 activities, A and B. Doing activity A gives a return of 100 dollars, doing activity B gives a return of -50 dollars. What would be the opportunity cost of choosing activity B? 100 ...
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1answer
293 views

Intuition Behind the Definition of Prudence?

I'm having trouble seeing why an agent is said to exhibit "prudence" when u'''($\cdot$) > 0. How does having a utility function with a strictly positive third derivative make an agent act "prudently"? ...
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404 views

Why are simple returns additive over securities?

I've found a few sources for instance this one, that makes the claim that over a portfolio, simple returns are additive. I can see why it doesn't make a difference if we use net or gross returns as ...
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106 views

Definition of capitalism

Does the discipline of economics have an accepted rigorous definition of capitalism? I.e. not something like "some economists would quote Hayek and say that so and so constitutes capitalism" but an ...
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42 views

Is there a term for the indirect sponsorship of large corporates by the state?

For example, unemployment welfare payments could be argued to be ameliorating the negative externalities of large corporates hiring newly arrived unskilled migrants. Is there a term that covers this?
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Who created the concept of “present value”?

I cannot find anything on this online. The wikipedia article is purely technical, except by a mention that such system was used in England in early 16th century. Do you know who was the first to come ...
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Is “management science” a subsection of economics?

Reading about the academic journal Management Science, one can read the following: Management Science is a scholarly journal that publishes scientific research on the practice of management. (...) ...
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2k views

What is the term for 'forgone cost' as 'opportunity cost' is for 'forgone profit'?

For example, suppose I made \$100 from an investment. If I'd had deposit the same amount of money in the bank I would have get \$60 of interest. Then the 'forgone profit' or 'opportunity cost' in this ...
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119 views

Is the arable land a mean of production?

Wikipedia claims that "capitalism is an economic system and an ideology based on private ownership of the means of production and their operation for profit". And then, the land used for agriculture ...
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71 views

What did Karl Marx mean by “the movement of this antithesis”?

In a lecture about ancient and modern cities, a quote came up on the slides from Karl Marx's Capital where he writes "The foundation of every division of labor that is well developed, and brought ...
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216 views

Teaching changes in “demand” v. “quantity demanded”

I am always struggling with teaching this one. The terminology of standard intro textbooks is unfortunate, although it's so pervasive that we probably have to live with it. By a "Demand", intro ...
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Economic term for relation between drug and companion diagnositic

I'm looking for economic terminology which must exist, although I don't know what it is. (I want to look up articles on a particular situation involving two real-world companies.) Here is the ...
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42 views

Terminology for separability in price and value

Take an agent with mean-variance utility over something that is uncertain: $$ U(x) = \mu_x^\theta - \sigma_x^\lambda $$ $A\in \{0,1\}$ happens if $U(x)>0$, and $x$ is a random variable $$ A = \...
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Why is M0 higher than M1?

In my understanding, M2 includes M1 and M1 include M0. However, I checked the money supply here and used the "Compare" function to compare the money supply of m0 with money supply of m1, and found ...
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42 views

“Normal” vs “actual” variables in empirical work

In an early OECD study by Deppler and Ripley (1978), the authors distinguish between output per man hour, $OMH$, and what they call "Normal" output per man-hour, $NOMH$. (table 2, p152) At no point ...
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266 views

Definition: What Is The “Trend Growth Rate”?

I am a bit unsure about how the "trend growth rate" is defined in macroeconomics. Is it to correct to say that if a time series $\{y_t\}$ may be decomposed as $$y_t=d_t+c_t,$$ where $d_t$ is a ...