- Industrie: Economy; Printing & publishing
- Number of terms: 15233
- Number of blossaries: 1
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A controversial concept, often used by politicians to justify imposing a tax on profit that in theory is earned unexpectedly, through circumstances beyond the control of the company concerned, and is thus deemed undeserved and ripe for the taking by the tax authorities. As the profits were neither expected nor a result of the efforts of the firm, taxing them should not harm the firm’s incentives to maximize future profits. The problem comes when greedy politicians start claiming that profits are windfalls when in fact they are deserved and expected. Then taxing them sends a signal to firms that they should not try too hard to make profits, as if they do too well they will not get to keep the profits anyway. If this became widely believed, effort would probably decline and economic growth would be slower.
Industry:Economy
Money you can trust. A hard currency is expected to retain its value, or even benefit from appreciation, against softer currencies. This makes it a popular choice for people involved in international transactions. The dollar, D-Mark, sterling and the Swiss franc each became a hard currency, if only some of the time, during the 20th century.
Industry:Economy
The most widely accepted measure of risk in financial markets is the amount by which the price of a security swings up and down. The more volatile the price, the riskier is the security. Not least because there is no obvious alternative, economists often use past volatility to forecast the future risk of a security. However, as the saying goes, past results are not necessarily guides to future performance.
Industry:Economy
Term coined in the 1970s for the twin economic problems of stagnation and rising inflation. Until then, these two economic blights had not appeared simultaneously. Indeed, policymakers believed the message of the Phillips curve: that unemployment and inflation were alternatives.
Industry:Economy
How good consumers feel about their economic prospects. Measures of average consumer confidence can be a useful, though not infallible, indicators of how much consumers are likely to spend. Combined with measures such as business confidence, it can shed light on overall levels of economic activity.
Industry:Economy
What economic activity is all about, but how can it be made to happen? Economists have plenty of theories, but none of them has all the answers. Adam Smith attributed growth to the invisible hand, a view shared by most followers of classical economics. Neo-classical economics had a different theory of growth, devised by Robert Solow during the 1950s. This argued that a sustained increase in investment increases an economy's growth rate only temporarily: the ratio of capital to labor goes up, the marginal product of capital declines and the economy moves back to a long-term growth path. Output will then increase at the same rate as the growth in the workforce (quality-adjusted, in later versions) plus a factor to reflect improvements in productivity. This theory predicts specific relationships among some basic economic statistics. Yet some of these predictions fail to fit the facts. For example, income disparities between countries are greater than the differences in their savings rates would suggest. Moreover, although the model says that economic growth ultimately depends on the rate of technological change, it fails to explain exactly what determines this rate. Technological change is treated as exogenous. Some economists argued that doing this ignored the main engine of growth. They developed a new growth theory, in which improvements in productivity were endogenous, meaning that they were the result of things taking place within the economic model being used and not merely assumed to happen, as in the neo-classical models. Endogenous growth was due, in particular, to technological innovation and investments in human capital. In looking for explanations for differences in rates of growth, including between rich and developing countries, the new growth theory concentrates on what the incentives are in an economy to create additional human capital and to invent new products. Factors determining these incentives include government policies. Countries with broadly free-market policies, in particular free trade and the maintenance of secure property rights, typically have higher growth rates. Open economies have grown much faster on average than closed economies. Higher public spending relative to GDP is generally associated with slower growth. Also bad for growth are high inflation and political instability. As countries grew richer during the 20th century annual growth rates declined, as a result of diminishing returns to capital. By 1990, most developed countries reckoned to have long-term trend growth rates of 2-2. 5% a year. However, during the 1990s, growth rates started to rise, especially in the United States. Some economists said this was the result of the birth of a new economy based on a revolution in productivity, largely because of rapid technological innovation but also (perhaps directly stemming from the spread of new technology) to increases in the value of human capital.
Industry:Economy
Cancelling or rescheduling a borrower’s debts to lessen the pain of the debt burden. Debt forgiveness is increasingly viewed as the best way to relieve the financial problems facing poorer countries. Some of these countries have to pay so much in interest each year to foreign lenders that they have little money left to spend on the long-term solutions to their poverty, such as educating their workers and building a modern infrastructure. In 1998 the World Bank calculated that around 40 of the world’s poorest countries had an “unsustainably high” debt burden: the present value of their total debts was more than 220% of their exports. Debt forgiveness has potential drawbacks. For instance, there is a risk of moral hazard. If countries that borrow too much are let off their financial obligations, poor countries may feel they have nothing to lose by borrowing as much as they can. This is why policymakers often argue that debt forgiveness should come with a conditionality clause, for instance, a requirement that countries have a track record of implementing economic reforms designed to prevent a repeat of the errors that first created the need for debt forgiveness. This is the approach taken by the World Bank's HIPC (highly indebted poor country) initiative, launched in 1996 and expanded in 1999. However, by 2003, only eight of the 38 poor countries eligible under the program had made enough progress in reform to have some debt forgiven.
Industry:Economy
Changing the payment schedule for a debt by agreement between borrower and lender. This is usually done when the borrower is struggling to make payments under the original schedule. Rescheduling can involve reducing interest ¬payments but extending the period over which they are collected; putting back the date of repayment of the loan; reducing interest payments but increasing the amount that has to be repaid eventually; and so on. The rescheduling may or may not require the lender to bear some financial loss. The rescheduling may or may not require the lender to bear some financial loss. The rescheduling of loans to countries usually takes place through the Paris Club and London Club.
Industry:Economy
Stopnja rodnosti v državi treba stalno hraniti njenega prebivalstva. v bogatih državah, to je običajno domneva, da je 2. 1 otroka na žensko, dodatno 0. 1, ki odražajo verjetnost, da bo nekaj otrok umre pred starši. v revnejših državah z višjo umrljivost dojenčkov, je stopnja nadomeščanja lahko precej višje. v mnogih državah, v začetku devetdesetih, je stopnja rodnosti padla pod nadomestno stopnjo. Tam je bilo veliko razprav o tem, zakaj, in veliko sporazuma, če ta trend nadaljuje, teh držav lahko obraz dolgoročne težave, kot so relativno vedno večji delež upokojenih starejših ljudi, ki imajo relativno krčenje delež mlajših ljudi podpira.
Industry:Economy
Dogovor, v katerem ena stranka prodaja varščino na drugo stranko in se strinja, da kupite nazaj na določen datum za določeno ceno. Centralnih bank obravnavajo v kratkoročne repo za zagotavljanje likvidnosti v finančni sistem, odkup vrednostnih papirjev iz banke z gotovino, pod pogojem, da banke bo odkupovala, jih nekaj tednov kasneje.
Industry:Economy
