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.
While Japan had a trade surplus and the USA had a trade deficit, both had something called a trade balance, which was negative for the USA and positive for Japan.
A country can have an overall trade deficit (like the USA in all years since 1980) and still have trade surpluses with individual countries (e.g., the USA occasionally has trade surpluses with Brazil).
While Japan had a trade surplus and the USA had a trade deficit, both had something called a trade balance, which was negative for the USA and positive for Japan.
A country can have an overall trade deficit (like the USA in all years since 1980) and still have trade surpluses with individual countries (e.g., the USA occasionally has trade surpluses with Brazil).
Usually, when a country runs a trade surplus it tends to export the excess foreign currency back to the deficit country as portfolio investment. In this way, the foreign currency retains its value.
by Abu Yahya February 14, 2009
Of or related to the United States of America; term coined by Frank Lloyd Wright to refer to his new ideal for architecture. This word is preferable to "American" since there are dozens of countries in North and South America. In some Latin American countries, such as Brazil, the use of "American" to refer to US nationals is considered offensive and officially discouraged.
While Canadians and Usonians share a common heritage and close proximity, there are some subtle cultural differences.
by Abu Yahya August 22, 2008
(FINANCE) issue of stock by a firm that already has stock in circulation.
Follow-on offerings account for a little over 83% of new finance capital raised on the NYSE. The other 17% was initial public offering (IPO).
Follow-on offerings account for a little over 83% of new finance capital raised on the NYSE. The other 17% was initial public offering (IPO).
Between 1 January and 31 August 2010, 46 companies had made an initial public offering on the NYSE; another 33 had made a follow-on offering. But while the IPO's accounted for $9.5 billion, the FOO's accounted for almost $55 billion.
by Abu Yahya September 28, 2010
(LOGIC) a logical fallacy in which a person defends against an allegation by accusing an adversary of doing the same thing. It's a classic douchebag move because it implies that the speaker has a RIGHT to be a douchebag, by virtue of the fact that someone ELSE is being a douchebag.
From Latin, for "you, too."
WHY IT'S BAD
Suppose A is accused of terrorism. He reacts by accusing B, his enemy, of terrorism. Now, it's possible (but unlikely) that A actually chose this argument knowing he was totally innocent. More likely he wants to claim that his terrorism is PROVOKED. In effect, he's saying, "I have to do this, or I'm entitled to do this, because B did it first."
First, as logic it's a red herring. But what makes it douchebaggery rather than just another wartime propaganda tactic, is that it's MORALLY irrelevant as well as LOGICALLY irrelevant. The victims of terrorism almost never have any material control over either perpetrator ever.
From Latin, for "you, too."
WHY IT'S BAD
Suppose A is accused of terrorism. He reacts by accusing B, his enemy, of terrorism. Now, it's possible (but unlikely) that A actually chose this argument knowing he was totally innocent. More likely he wants to claim that his terrorism is PROVOKED. In effect, he's saying, "I have to do this, or I'm entitled to do this, because B did it first."
First, as logic it's a red herring. But what makes it douchebaggery rather than just another wartime propaganda tactic, is that it's MORALLY irrelevant as well as LOGICALLY irrelevant. The victims of terrorism almost never have any material control over either perpetrator ever.
ANNA: Abu Yahya, I don't know if your definition of "tu quoque fallacy" belongs in the Urban Dictionary. This isn't Wikipedia, you know.
ABU YAHYA: The reason I did is that I see all the time people using the rationale that, because somebody else did something bad to me, therefore I get to do something similar to anybody. It's sort of like sloppy revenge.
ANNA: Like men punishing random women because their girlfriends allegedly did something shitty to them?
ABU YAHYA: Actually, that's a perfect example of a tu quoque!
ABU YAHYA: The reason I did is that I see all the time people using the rationale that, because somebody else did something bad to me, therefore I get to do something similar to anybody. It's sort of like sloppy revenge.
ANNA: Like men punishing random women because their girlfriends allegedly did something shitty to them?
ABU YAHYA: Actually, that's a perfect example of a tu quoque!
by Abu Yahya June 03, 2010
*noun*; in Keynesian economics, the rate at which aggregate consumption rises in response to a rise in national income.
For example, suppose the marginal propensity to consume (MPC) is 0.95. If the national income is 100 billion dollars, and it rises 10%, then consumption will rise by 9.5 billion, and saving will rise by 0.5 billion.
If this theory is correct, then an expanding economy will suffer insufficient demand for its own output, and a recession will be inevitable.
This is why national governments respond to recessions with deficit spending: they are trying to counteract the MPC's effect on aggregate demand, and bring it in line with potential output.
For example, suppose the marginal propensity to consume (MPC) is 0.95. If the national income is 100 billion dollars, and it rises 10%, then consumption will rise by 9.5 billion, and saving will rise by 0.5 billion.
If this theory is correct, then an expanding economy will suffer insufficient demand for its own output, and a recession will be inevitable.
This is why national governments respond to recessions with deficit spending: they are trying to counteract the MPC's effect on aggregate demand, and bring it in line with potential output.
Not only is the marginal propensity to consume weaker in a wealthy community, but, owing to its accumulation of capital being already larger, the opportunities for further investment are less attractive...
J.M. Keynes, *The General Theory of Employment, Interest, and Money* (1936), Ch.3
J.M. Keynes, *The General Theory of Employment, Interest, and Money* (1936), Ch.3
by Abu Yahya March 03, 2009
*noun*; prolonged economic crisis characterized by drastic (i.e., >20%) decline in output, reduction in employment, and deflation. Other technical conditions include a liquidity trap and "permanent" (i.e., persisting in many sectors for several quarters) failure to reach equilibrium.
Usually the word "depression" (when referring to economics) is used to refer to the Great Depression, although in fact there were eight incidents of a global depression between 1815 and 1922. These were
--- 1815-21
--- 1832-33
--- 1837-44
--- 1854-57
--- 1867-68
--- 1876-79
--- 1893-96
--- 1920-22
In addition, there have been many localized depressions, panics (e.g., the 1907 Panic {USA}, followed by the Mexican Depression of 1908), and recessions.
DIFFERENCE BETWEEN RECESSION & DEPRESSION
The technical distinction between a recession and depression can vary, although economists usually agree on which is which. In Keynesian economics, a depression is defined by the existence of a flat liquidity-money (LM) curve (which means that interest rates have no influence on people's determination to hold their wealth as cash); and/or a nearly vertical investment-savings (IS) curve (which means interest rates have no influence on the willingness of entrepreneurs to expand/continue operations).
In contrast, a recession is a much less drastic event. Interest rates still have influence on investment and liquidity, and there is no deflation. Conventional fiscal policy and monetary policy, combined and in moderate doses, can restore full employment.
Neoclassical economics/New Classical economics defines a recession as a shift in people's income/leisure preferences as the result of a technology shock. The technology shock sharply reduces the returns to labor, so workers are paid less and many withdraw their labor from the market. In a depression, the technology shocks are compounded and cause a permanent change in the production function; large numbers of enterprise are no longer viable.
More generally, a recession involves the downward phase of a routine business cycle; these typically occur every three-seven years. A depression represents a partial collapse of the industrial system, and a comprehensive collapse of the financial system.
Usually the word "depression" (when referring to economics) is used to refer to the Great Depression, although in fact there were eight incidents of a global depression between 1815 and 1922. These were
--- 1815-21
--- 1832-33
--- 1837-44
--- 1854-57
--- 1867-68
--- 1876-79
--- 1893-96
--- 1920-22
In addition, there have been many localized depressions, panics (e.g., the 1907 Panic {USA}, followed by the Mexican Depression of 1908), and recessions.
DIFFERENCE BETWEEN RECESSION & DEPRESSION
The technical distinction between a recession and depression can vary, although economists usually agree on which is which. In Keynesian economics, a depression is defined by the existence of a flat liquidity-money (LM) curve (which means that interest rates have no influence on people's determination to hold their wealth as cash); and/or a nearly vertical investment-savings (IS) curve (which means interest rates have no influence on the willingness of entrepreneurs to expand/continue operations).
In contrast, a recession is a much less drastic event. Interest rates still have influence on investment and liquidity, and there is no deflation. Conventional fiscal policy and monetary policy, combined and in moderate doses, can restore full employment.
Neoclassical economics/New Classical economics defines a recession as a shift in people's income/leisure preferences as the result of a technology shock. The technology shock sharply reduces the returns to labor, so workers are paid less and many withdraw their labor from the market. In a depression, the technology shocks are compounded and cause a permanent change in the production function; large numbers of enterprise are no longer viable.
More generally, a recession involves the downward phase of a routine business cycle; these typically occur every three-seven years. A depression represents a partial collapse of the industrial system, and a comprehensive collapse of the financial system.
From 1929 to 1933 the U.S. price level fell 25 percent. Many economists blame this deflation for the severity of the Great Depression. They argue that the deflation may have turned what in 1931 was a typical economic downturn into an unprecedented *sic* period of high unemployment and depressed income.
N. Gregory Mankiw, William M. Scarth, *Macroeconomics: Canadian Edition*, 2nd ed. (2003) p.318
N. Gregory Mankiw, William M. Scarth, *Macroeconomics: Canadian Edition*, 2nd ed. (2003) p.318
by Abu Yahya March 08, 2009
*noun*; generic term for economic thought developed from 1776 to 1930, which assumed the following basic concepts:
1. all types of goods, including factors of production, can be efficiently traded in markets;
2. given free markets, all goods available for purchase will, in fact, be purchased (including labor);
3. free markets include unlimited ability of prices of commodities to move upwards or downward to ensure the quantity supplied matches the quantity demanded.
*Subdivisions*
Adam Smith (1723-1790), auther of *The Wealth of Nations* (1776) is usually credited with compiling the critical ideas into a single theory.
Some historians regard the classical era as really beginning after 1817, with the work of David Ricardo (1772-1823) and Nassau Senior (1790-1864). Ricardo and David developed the concept of diminishing marginal utility to explain the idea of factor cost, and ultimately, market equilibrium.
After 1870, however, classical economics experienced the marginal revolution, in which the field adopted a much more systematic approach to addressing major research questions.
As a result of the Great Depression (1929-1939), classical economics generally faded from view until the late 1970's. At this time, the rational expectations hypothesis and real business cycle theory were refined in order to address problems that had crippled classical economics in the 1920's.
Textbooks addressing classical economic research since 1964 usually call it "New Classical economics." From 1982 to 2006, nearly all Nobel prizes in economics were awarded to New Classical economics such as
George Stigler, Ronald Coase, Robert Lucas Jr., Edward Prescott, and Edmund Phelps.
1. all types of goods, including factors of production, can be efficiently traded in markets;
2. given free markets, all goods available for purchase will, in fact, be purchased (including labor);
3. free markets include unlimited ability of prices of commodities to move upwards or downward to ensure the quantity supplied matches the quantity demanded.
*Subdivisions*
Adam Smith (1723-1790), auther of *The Wealth of Nations* (1776) is usually credited with compiling the critical ideas into a single theory.
Some historians regard the classical era as really beginning after 1817, with the work of David Ricardo (1772-1823) and Nassau Senior (1790-1864). Ricardo and David developed the concept of diminishing marginal utility to explain the idea of factor cost, and ultimately, market equilibrium.
After 1870, however, classical economics experienced the marginal revolution, in which the field adopted a much more systematic approach to addressing major research questions.
As a result of the Great Depression (1929-1939), classical economics generally faded from view until the late 1970's. At this time, the rational expectations hypothesis and real business cycle theory were refined in order to address problems that had crippled classical economics in the 1920's.
Textbooks addressing classical economic research since 1964 usually call it "New Classical economics." From 1982 to 2006, nearly all Nobel prizes in economics were awarded to New Classical economics such as
George Stigler, Ronald Coase, Robert Lucas Jr., Edward Prescott, and Edmund Phelps.
Proponents of classical economics are nearly always extremely conservative in their political views, and usually conclude that the sole legitimate role of the state is to defend property rights.
by Abu Yahya March 03, 2009