*adj*; the tendency of some systems to return to normal conditions after a disruption. For example, a spinning gyroscope will return to its original inclination if you push it away. The term is usually applied to theories about how the economy works.
Economists traditionally describe market economies as self-correcting. However, when depressions or recessions strike, they are usually obligated to help the process along.
by Abu Yahya March 23, 2009
Get the Self-Correcting mug.anything of value that a society has, whether it produced the thing or not, and whether the thing is traded commercially or not.
For example the USA has natural gas (which it did not produce), air (which it did not produce), computers (which it did produce) and personal freedom (which it did produce). Air and personal freedom are not tradeable goods; it's not possible to establish ownership rights for air or freedom.
Philosophers believe that the proper distribution of social goods is still an open question, even if the distribution of economic goods (like computers) is not.
For example the USA has natural gas (which it did not produce), air (which it did not produce), computers (which it did produce) and personal freedom (which it did produce). Air and personal freedom are not tradeable goods; it's not possible to establish ownership rights for air or freedom.
Philosophers believe that the proper distribution of social goods is still an open question, even if the distribution of economic goods (like computers) is not.
An inequality in the basic structure must always be justified to those in the disadvantaged position. This holds whatever the primary social good and especially for liberty.
John Rawls, *A Theory of Justice*, p.201
John Rawls, *A Theory of Justice*, p.201
by Abu Yahya February 14, 2009
Get the social good mug.a graph correlating inflation against unemployment rates. Using a horizontal axis to represent unemployment, and a vertical axis to represent inflation, A.W. Phillips found the rate of inflation and unemployment in Great Britain for every year between 1861 and 1957. When he had plotted the 97 dots on the chart, he had a rather neat hyperbola convex to the origin of the graph.
In other words, if the rate of unemployment was low, the rate of inflation was high, and vice versa. At the time, economists concluded that this was a logical outcome of both being influenced by the rate of interest: if interest rates were low, then unemployment would be low and prices would rise, but if interest rates were high then there would be lots of unemployment and workers would not have much money to spend... so prices would go down.
Unfortunately, when economists tried to design policy around this concept they disrupted the smooth relationship. In the years since the 1960's, there has not been a straightforward relationship, and Keynesian economics has had to be drastically revised to a post-Phillips Curve regime.
There is some correlation between inflation and unemployment, but the correlation is much more complicated than originally thought. It is quite possible to have high unemployment and high inflation (i.e., a high "misery index").
In other words, if the rate of unemployment was low, the rate of inflation was high, and vice versa. At the time, economists concluded that this was a logical outcome of both being influenced by the rate of interest: if interest rates were low, then unemployment would be low and prices would rise, but if interest rates were high then there would be lots of unemployment and workers would not have much money to spend... so prices would go down.
Unfortunately, when economists tried to design policy around this concept they disrupted the smooth relationship. In the years since the 1960's, there has not been a straightforward relationship, and Keynesian economics has had to be drastically revised to a post-Phillips Curve regime.
There is some correlation between inflation and unemployment, but the correlation is much more complicated than originally thought. It is quite possible to have high unemployment and high inflation (i.e., a high "misery index").
The Phillips Curve implies a trade-off between unemployment and inflation. Unfortunately, this trade-off may sometimes represent more of a Faustian bargain.
by Abu Yahya February 14, 2009
Get the Phillips Curve mug.(ECONOMICS) international bank created after World War 2 to coordinate currency stabilization. Main policy tool consists of lending money to central bank of countries facing a liquidity crisis.
In some cases, as when a member government is insolvent, the IMF will impose a structural adjustment program (SAP) requiring the government to jettison programs it has to serve the poor. For this reason, the IMF is often harshly criticized.
In some cases, as when a member government is insolvent, the IMF will impose a structural adjustment program (SAP) requiring the government to jettison programs it has to serve the poor. For this reason, the IMF is often harshly criticized.
It is often said that the International Monetary Fund makes economic crises worse by imposing the same austerity program everywhere, thereby further reducing a member state's ability to pay its sovereign debt.
(Another way of putting this is that the IMF's policies are pro-cyclical
(Another way of putting this is that the IMF's policies are pro-cyclical
by Abu Yahya May 05, 2010
Get the International Monetary Fund mug.(FINANCE) bonds issued by the treasury of a country.
In the USA, the US Department of the Treasury serves as the underwriter for the federal government; it floats bonds and short term securities ("paper"), which is then used by central banks around the world as hot money.
Includes
--the t-bill: short term (>91 days); discounted
--the treasury note: up to 10 years; coupons
--the treasury bond: longer than 20 years; coupons
In the USA, the US Department of the Treasury serves as the underwriter for the federal government; it floats bonds and short term securities ("paper"), which is then used by central banks around the world as hot money.
Includes
--the t-bill: short term (>91 days); discounted
--the treasury note: up to 10 years; coupons
--the treasury bond: longer than 20 years; coupons
by Abu Yahya May 05, 2010
Get the Treasury securities mug.(ECONOMICS) A bank that is empowered to issue currency. In the USA, between 1863 (National Bank Act) and 1935, any bank with a federally issued charter (i.e., a national bank) was allowed to issue currency. After 1914, few did.
The US Treasury issued a small number of banknotes until 1971.
In the UK, banknotes of the Bank of England are legal tender; but the Royal Bank of Scotland is also a bank of issue.
Today, in almost every country of the world, the sole bank of issue is the central bank of that country.
The US Treasury issued a small number of banknotes until 1971.
In the UK, banknotes of the Bank of England are legal tender; but the Royal Bank of Scotland is also a bank of issue.
Today, in almost every country of the world, the sole bank of issue is the central bank of that country.
by Abu Yahya May 05, 2010
Get the bank of issue mug.the amount of goods and services that a country exports, minus the goods and services that it imports *in a calendar year*. In 1999 Japan exported much more than it imported, so it had a trade surplus. The same year, the United States imported more than it exported, and therefore had a large trade deficit.
The trade balance is negative if a country runs a trade deficit, and positive if it runs a trade surplus.
The trade balance is negative if a country runs a trade deficit, and positive if it runs a trade surplus.
The trade balance is an extremely important indicator of economic health for most countries. Typically (not not always) the value of the currency is strongly influenced by the trade balance also.
by Abu Yahya February 14, 2009
Get the trade balance mug.