Questions tagged [definition]

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

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1answer
40 views

What type of an income distribution would allow the fastest growth and/or highest sustainability

Is there a theoretical framework to explore the question of what could be the ideal distribution of income among a population that will yield growth and/or sustainability? Let $P(m)$ be a density ...
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58 views

What does annualised GDP shrinkage of 75% and growth of 54.6% mean?

According to Business Today (India), these are the latest figures for 2020 September 3 for GDP change in World's largest economies. In simple terms, what do GDP shrinkage of 75% and growth of 54.6% ...
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128 views

Discounting terminology confusion

An example of the terminology that surrounds discounting that confuses me can be found in "Investment and Hysteresis" by Dixit: Let future revenues be discounted at a positive rate $\rho &...
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1answer
79 views

Why may printing trillions of dollars not lead to inflation?

By definition, inflation should be affected by the increase of the money supply. During the pandemic, there have been numerous huge monetary policies executed, e.g., quantitative easing (QE), ...
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1answer
117 views

Is marketing a field of economics?

I would argue that the marketing (or de-marketing as in the example of a recall) of goods and services is an implementation of knowledge and experience in microeconomics as it deals with the practical ...
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2answers
67 views

Need examples for confusion about rent-seeking. Who is the seeker and what is the rent?

Please answer assuming I have no background in economics. I keep coming across this term in various articles (Example) but get more confused every time I look up what it means. I have read about the ...
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24 views

What is the proper academic term for “realizing sales from online traffic”?

Realizing sales form traffic is one of the major concerns for firms in a digital economy. To my knowledge, online marketing methods (such as SEO) usually generate traffic but not necessarily profits. ...
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1answer
76 views

Definiton of information sets in rational expecations models

I am struggling with the notion of 'information sets' in the context of rational expectation models in economics. I found interesting notes on the web (http://www2.econ.iastate.edu/tesfatsi/reintro....
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20 views

In economics what is “total of pre-tax income of all citizens” called?

What terminology is used in economics/finance to refer to the total of pre-tax income of all citizens of a country? And where to find that information
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1answer
32 views

How is the defintion of the mean preserving spread (MPS) not too general?

The mean preserving spread is defined as follows: Consider two lotteries g and h. Let $x_g$ und $x_h$ denote the corresponding random variables. Then h is a mean preserving spread (MPS) of g, if: $...
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149 views

What is the definition of: 'commodity space'?

I have seen the concept of commodity space being used multiple times in economics, in particular within microeconomics, but I could not find a general definition of it. Based on the examples that I ...
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1answer
46 views

Which single letter abbreviations are typically used for the production factors Land, Labour and Capital?

I often see "L" for Labour and "K" for Capital, as well as "M" for natural resources (i.e. Land) but they don't seem to be applied consistently.
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Understanding the arithmetic in this 1690 text

Nicholas Barbon (1690, A Discourse of Trade) Another use of Interest, is, It is the measure of the Value of the Rent of Land; it sets the Price in Buying and Selling of Land: For, by adding three ...
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41 views

Meaning of “let him take Money at Interest, and not buy at Time”

Dudley North (1691): let him take Money at Interest, and not buy at Time What does the above statement mean? I think "take Money at Interest" simply means "borrow at some interest rate". But I ...
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1answer
20 views

Terminology: _______ financing (meaning financed through the private sector)

I have encountered several similar terms on this notion, including: private sector financing (very clear, but a bit wordy) market financing (somewhat clear, usage seems infrequent) alternative ...
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1answer
61 views

Is there any academic source that uses the following 'standard broad' definitions of externality?

According to answer to this question by KennyLJ., there exists the following definition of externality: The simple, standard, and broad definition I favor is this: A decision's effects are called ...
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102 views

Is the use/consumption of natural resources considered an externality per se?

On a finite planet natural resources are rival goods by definition, i.e. if one agent uses/consumes a natural resource it becomes unavailable for other agents. Mankiw defines an externality as "the ...
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23 views

Leader-follower-leader games

I am trying to find some literature on a variation of a Stackelberg game in which two players, P1 and P2, interact in the following order: P1 plays P2 plays P1 plays The best guess I have for the ...
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1answer
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What does the adjective “structural” mean in “structural reforms” or “structural effects”?

Economists frequently speak of structural reforms and structural effects. For example, Manmohan Singh (1992): The economic crisis was used as an opportunity to implement basic structural reforms ...
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Is there a clear timeline of ECB/Eurosystem's changes to the defintion of M3 (with regard to repos)?

I found that circa 2012 the ECB/Eurosystem changed their definition of M3 to exclude at least some repos, which previously were included. According to a 2014 Bundesbank publication, the change ...
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2answers
74 views

Should unemployment caused by the government closing non-essential businesses during quarantine be counted as structrural unemployment?

I have following definition of structural unemployment (taken from "Modern principles of economics" by Tyler Cowen and Alex Tabarrok): Long-term unemployment caused by shocks or permanent features ...
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2answers
97 views

Difference(s) between Rational Expectations Equilibrium and Nash equilibium

What is the major difference between the notion of rational expectations equilibrium and Nash equilibium? And why do we, only, have a rational expectation about the first moment (the price) in the ...
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1answer
50 views

What is a super deduction?

This is a term often encountered in documents published by the Big Four (Deloitte, Ernst & Young, Price Waterhouse Coopers, KPMG), for instance in the E&Y 2018 Worldwide R&D Incentives ...
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204 views

What were “scissors prices” (China, 1950s)?

Chan (2018) writes: Implementing such a strategy, the state siphoned off resources in the rural sector for capital accumulation in industry through the well-known process of "scissors prices". ...
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Can structural unemployment be caused by regulations/laws of the government?

I think yes. Is my reasoning correct? The reasoning: Suppose, for an example, that prostitution was legal, but then the State changed its laws and criminalized prostitution. Has the State created ...
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54 views

Can resource be considered scarce if its supply is limited, while quantity of the resource is practically unlimited?

Let's consider energy of our Sun for an example. The Sun will be able to give us lots of energy for millions of years (and even its annual energy output is enormous), it's practically unlimited energy....
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19 views

What is the average percent of value an employee makes which he gets on salary (called)?

I'm looking for any statistics showing the average percent of money employees get from the monetary value they create, primarily from the US or EU. Is there a term for this ratio?
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Durable/non-durable good industries

How to define durable/non-durable good industries? For example, is the industry of Wholesale and retail trades defined as durable good industry? Thanks in advance.
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1answer
37 views

why is the term fiat money or fiat currency and is it the same as legal tender or are there any differences?

I learnt some very basic economics learning about 2, 2.5 decades back. Recently, while reading some article on the web, I came to know about 'fiat money' and 'fiat currency' but have been unable to ...
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1answer
34 views

Essential difference between Neo-Classical and Neo-Liberal economical philosophies

From what I learned about Neo-Classical and Neo-Liberal economical philosophies in different sources such as documentary series or Wiki site articles I understand both are "neo" versions of Classical ...
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1answer
24 views

What's the econ word for “Savings and efficiencies gained via consolidation”?

For example, say you had 5 kitchens making cookies in 5 parts of the city. But, then you bought 1 big kitchen, and moved all of your 5 kitchens to this 1 big location. Due to mass production, we ...
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21 views

How do you call systems in which the more you have, the more you make?

I am looking for a term for systems or dynamics in which the ability to earn a particular resource requires having a minimum of that resource available, and grows progressively or exponentially with ...
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1k views

What precisely is scarcity?

I'm aware that certain terms in economics have precise definitions that don't necessarily line up with our intuition about what they mean. I'm currently writing a paper that heavily relies on the ...
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337 views

What's the opposite of a Pareto improvement called?

Wikipedia defines a Pareto Improvement, "given a certain initial allocation of goods among a set of individuals" as: a change to a different allocation that makes at least one individual or ...
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1answer
34 views

What does 'currency convertibility' mean?

As a student with almost zero background in economics, I've been struggling to comprehend the notion of the currency convertibility. Most of the definitons I've found online talk about the ease with ...
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2answers
113 views

Who first used the term “externality” in economics?

Who first used the term externality in economics, as the term is currently used in its modern sense? (I believe it was already used in philosophy to mean something else and the economics version of ...
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Is there a widely accepted definition of “asset [price] inflation”?

A bit of googling found some conflicting ones... Capel and Houben (BIS) Asset inflation occurs when the prices of financial assets are rising even though they are already above their intrinsic or ...
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1answer
34 views

Name of phenomenon where migrant workers receive decent wage but absolutely no chance of getting any government benefits

Not sure if the title reflects the question very accurately but my question is specific to the Gulf countries which have a huge population of migrant workers, like Saudi and UAE. So, let's say Raj is ...
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1answer
55 views

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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206 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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1answer
220 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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2answers
2k 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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1answer
111 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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2answers
162 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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880 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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214 views

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 ...