Questions tagged [definition]

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

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Can the ideas of capitalism and communism be well defined?

I have read several reddit threads where it is said that modern economists don't bother with ideas like capitalsm and communism (eg: 1 ,2). However when one looks in a dictionary they get the ...
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1 vote
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What is the economic nature of water?

How should one classify water in economic terms? Is it a commodity, a natural resource, can it be both? Does it depend on how it is being used (e.g., as input/raw material in some process)? I was ...
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Distinguishing Between Different Terms in Economics

I have no background and Economics and am trying to teach myself about some basic things in Economics. For example, I am trying to understand the following terms: Nash Equilibrium Optimal Strategy ...
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Meaning of “accumulation through mar­ket exchanges”?

I'm unsure as to whether this question belongs on the History or Economics stack exchange, but while reading a book on Soviet Union policies after WW1 I came across the term “accumulation through mar­...
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Approximating Optimal Choices and Income Inequality

It seems that at least the basic microeconomic theory assumes we are optimizing over quantities that can take continuous magnitudes, but in practice one can often only purchase goods in discrete ...
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Preference terminologies

I am reading one paper by [Maskin et al. 1979] and cannot figure out some notations. Specially, they defined some states of nature $A$, and each player in the player set $I$ has some preferences over ...
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Differences between stocks and bonds

I just learned what bonds are. They seem similar to stocks, but different in key ways. I'd like to know all the ways. I'll list the differences that I currently believe they have. The only reason I'm ...
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1 vote
1 answer
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Is it possible to get a demand function as function of income and utility from this log linear indirect utility?

I have this indirect utility function: $$v=-c\frac{p^{(-β+1)}}{(-\beta+1)}+\frac{y^{(-\gamma+1)}}{(-\gamma+1)}$$ with constraint Y = c + pq I have posted before about getting the utility function from ...
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What is the typical utility function of the standard loglinear demand function?

What is the typical utility function of this demand function? $$x_1 = \ln(x_2) - \beta \ln(p_1) + \gamma \ln(y).$$ With budget constraint $y = p x_1 + x_2.$
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What are the examples to the terminology "allocation of scarce resource"

Does allocation of scarce resource mean trading of a perishable goods with the one who needs it most. Say, a drug that can cure cancer and there is only 10 units left. A seller sells the item who pays ...
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Shift in demand vs increase in demand [duplicate]

What is the difference between the concepts of shift in demand and increase in demand? Can these be used interchangeably, and do any of them have multiple meanings in economics?
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Demand vs. demand schedule vs. quantity demanded

What is the difference between the concepts of demand, demand schedule and quantity demanded? Can these be used interchangeably, and do any of them have multiple meanings in economics? Also, is there ...
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What does it mean by the statement "a corporation looses money if it produces more than its value"

Recently I was reading a book on corporate finance titled "corporate finance for dummies". Here in the introduction page the author has given a definition for corporate finance, followed by ...
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Is there a term to refer to the point at which an actor updates a "price"?

Examples of what I mean: A company increases the price of their product to match increasing COGS (e.g. a restaurant increasing their prices because the cost of ingredients has increased significantly)...
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Why we say "active investing puzzle" while we already know the reason?

Han,2021 describe active investing puzzle as: Notably, individual investors trade actively and have invested in active investment funds for decades, and they thereby have on average underperformed ...
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Asking for "impersonal market" definition

By reading a paper of Han,2021, they wrote In most investment models, the influence of individual choices on others is mediated by price or by quantities traded in impersonal markets I do not fully ...
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3 votes
1 answer
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What does "mass" mean in a Macroeconomic model?

A Solow model problem I am trying to solve asks me to assume that the economy consists of identical agents of mass 1. I have never heard of this term before, what does this mean?
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Characterizing goods by R&D costs

Is there a name for distinguishing manufactured goods requiring little/no R&D and ones requiring high/sustained R&D costs? Do these two types of manufactured goods have a name in economics? ...
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1 answer
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The Amsterdam stock exchange market

The Dutch East India Company (founded in 1602) was the first joint-stock company to get a fixed capital stock and as a result, continuous trade in company stock occurred on the Amsterdam Exchange. I ...
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Convex sets definition

I want to understand why do we have to define a function on convex set before we define concavity or convexity. https://mjo.osborne.economics.utoronto.ca/index.php/tutorial/index/1/CVN/t#d:CvxSet I am ...
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Definition of a $k-$strong Nash Equilibrium

Consider a game $G=(N, (A^i)_{i\in N}, (g^i)_{i\in N})$, $N=\{1,2,\dots,n\}$, $A=\Pi_{i\in N}A_i$ is the set of actions and $g^i:A\to \mathbb{R}$ is the payoff function. The latter can be extended ...
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1 vote
1 answer
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Asking for the definition of various types of treatment?

Borusyak (2021) writes the following: We further discuss the implications of our results when treatment is simultaneous rather than staggered, when it can switch on and off, and when multiple ...
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2 votes
1 answer
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Why isn't economic growth defined in terms of the increase in national wealth?

Economic growth is defined as the increase in production or output per unit time. Why isn't it instead defined in terms of the increase in national wealth?
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Confusion regarding the definition of inflation premium

'Inflation premium' is defined here as the higher return that investors demand in exchange for investing in a long-term security, where inflation has a greater potential to reduce the real return. In ...
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1 vote
1 answer
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Is cost for "discount for early payment" is opportunity cost?

Deloof (2003) states that On the other hand, late payment of invoices can be very costly if the firm is offered a discount for early payment. This sentence means that if the firm cannot pay back ...
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8 votes
1 answer
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Is "avoiding being the bearer of bad news" an example of the "principal-agent problem"?

For example: A king designs a bridge, and he unknowingly does a bad job. He asks an engineer for her opinion, but the engineer fears that if she tells the truth, the dictator will be angry with her. ...
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1 answer
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$I(g)$-terminology

During my studies I came across the $I(g)$-symbol, in the sense that $Z_t \sim I(g)$ for an integer $g$ and $Z_t$ is a times series. What exactly does this mean, and does it have to do with ...
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2 answers
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What are some alternative words for "cartel"?

I am looking for some words for "cartel" in economics. I did a search and found a good word is "corporate consolidation" from this newspaper. I am wondering if there is any other ...
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2 votes
2 answers
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Can we rank stochastic dominance of distribution functions that belong to the same class?

The actual distributions I am dealing with are not uniform, but to keep it simple, consider two uniform distributions, one on [1, 2] and the other on [0,2]. Can we say that the first FOSDs the second? ...
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Clarifying the definition of "event study"?

I am quite confused about the definition of an event study. From my understanding, an "event study" is when we examine the impact of an event (e.g., a law) on a dependent variable (e.g., ...
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6 votes
1 answer
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Precision of language regarding "statistical significance" in Wooldridge's *Introductory Econometrics* (7th ed)

I've been reading Jeffrey Wooldridge's textbook Introductory Econometrics: A Modern Approach (7th edition) in preparation for a class I will be teaching. I've appreciated the precise language he uses, ...
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3 votes
2 answers
224 views

What's the difference between Ex-post Incentive Compatibility and Dominant-Strategy Incentive Compatibility

According to the Wikipedia definition of Dominant-Strategy Incentive Compatibility (DSIC): DSIC means truth-telling is a weakly-dominant strategy, i.e. you fare best or at least not worse by being ...
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What type of dividends are there [closed]

Then came Meredith Whitney, with news. Whitney was an obscure analyst of financial firms for an obscure financial firm, Oppenheimer and Co., who, on October 31,2007, ceased to be obscure. On that day ...
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0 answers
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What's the name of this particular economics phenomenon (loss and increase of value over many years)?

I have almost no knowledge of economics so I decided to ask you here. Sorry for tags but I didn't have any idea what should I use. Some things loss its value due to quality and functionality increase. ...
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1 vote
1 answer
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What are the meanings of "difference-in-differences" and "causal estimand"?

In one discussion, I saw the answer containing two words that I think can be used interchangeably, but I am not sure if it's the case. I simply state in other posts that the "generalized" **...
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2 votes
1 answer
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Prices in 'The Wealth of Nations'

While reading 'The Wealth of Nations', I have come across terms like nominal price, consumer price, actual price, exchange price. What each means? What is the difference between them? Note: I am ...
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8 votes
1 answer
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Is there a formal definition of opportunity costs, economic costs, and/or economic profits?

[Edited to remove a mistake in a definition and some typos.] According to various econ textbooks (e.g. this one), there is a fundamental distinction between economic profit and accounting profit: (i) ...
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3 votes
0 answers
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What is normal capacity?

The average variable cost will generally fall as output increases from zero to the normal capacity output due to the occurrence of increasing returns. But beyond the normal capacity output average ...
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1 answer
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What is meant by the sentence in the context of "Monetary Policy in India"? [closed]

To quote from the book, "Indian Economy by Nitin Singhania," this is what I found out,"It is a macroeconomic policy used by RBI to influence the supply of money." What is meant by ...
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2 votes
1 answer
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Having difficultly to understand two indices with regard to inflation

What are these terms "provisional headline inflation" and "imputed index" used to predict in terms of inflation?
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1 vote
1 answer
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Is 'price hike' synonymous with 'price rise'?

Since my childhood I have a belief that in economics price rise and price hike synonymous with each other. Moreover, the Collin dictionary strengthens by belief: Hike But what you experts have to say--...
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3 votes
2 answers
259 views

How to justify the treatment and control groups for Difference-In-Difference with staggered implementation of laws?

A. Background: Dong, 2019 and Dasgupta, 2019 used the same way to generate the treatment and control groups because they all learn about the impact of the same laws on different dependent variables. I ...
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1 vote
1 answer
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What does 'establishment' mean in real estate industry?

I read data on real estate industry and there is a table titled "establishments". The title of it is "number of establishments in real estate for all establishment sizes". Is '...
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4 votes
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Joint significance test in a difference-in-differences setting

I ran the following difference-in-differences regression in software and have some questions about the interpretation of the resulting coefficients and their (joint) significance: $$ P_{it} = \gamma_i ...
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1 vote
1 answer
231 views

Comparing & contrasting decision problems and normal games

I am trying to compare and contrast between decision problems and normal games. Are there any key concepts I should know? Any help would be greatly appreciated.
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2 votes
1 answer
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What are the differences between "Crawling peg" and "Crawl-like arrangement"?

The IMF AREAER 2019 classifies 3 countries as "crawling" and 18 as "crawl-like". It's not clear to me though how these classifications were made and why they couldn't be switched ...
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0 votes
1 answer
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What is the term for workers who outputs more than other workers at the same wage thus depressing wage for others? [closed]

What is the specific term for this worker: A worker who outputs more than other workers at the same wage, therefore now the owner doesn't have to pay workers as much since he gets the same total ...
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2 votes
1 answer
24 views

Name for the intentional reduction in quality in a non-software, price discrimination setting

Is there a general term in economics for the intentional reduction in quality to reduce deviation to the worst alternative in price discrimination? Like "crippleware," but applicable in non-...
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6 votes
2 answers
306 views

What is the service equivalent of an economic 'bad'?

In general conversation, the terms "goods and services" are often used together. In economics, these terms have the following meanings: Goods: In economics, goods are items that satisfy ...
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5 votes
1 answer
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What does 'continuation' as in continuation games, strategies, plays, etc. exactly mean?

I am in my first course in grad level game theory. While I was reading through Fudenberg and Tirole's Game Theory, I constantly come into contact with the word 'continuation' to describe some games ...
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