abu yahya's definitions
*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 7, 2009
Get the depression mug.Capital investment in a foreign country that takes the form of purchases of securities (stocks, bonds, and commercial paper) in the companies of firms based in that country. Contrast to FDI.
by abu yahya September 28, 2008
Get the portfolio investment mug.(FINANCE) business entity formed to pool money provided by investors in order to buy majority stakes in existing companies. A common practice is to then "take the company private," so that it no longer has shares trading on the stock market. The company is then restructured, so that it has entirely different management practices, or a different business strategy. Afterward, the PE fund will most likely re-sell the company on the stock market in a sponsored IPO.
Private equity funds are usually limited liability partnerships (LLPs), which gives them special privileges of nondisclosure; most are organized in the State of Delaware. PEF's have sponsors, or "principals," who are responsible for organizing the fund and recruiting other investors.
Among the best-known PE funds are Blackstone Group*, Kohlberg Kravis Roberts (KKR)*, Goldman Sachs Capital Partners*, Carlyle Group, Permira, Apollo Management, Providence Equity, TPG Capital, Warburg Pincus, and Cerberus. Companies marked with an asterisk (*) are publically listed corporations; most PE funds are pivately managed. The selection above includes the largest ones by capital under management.
Private equity funds are usually limited liability partnerships (LLPs), which gives them special privileges of nondisclosure; most are organized in the State of Delaware. PEF's have sponsors, or "principals," who are responsible for organizing the fund and recruiting other investors.
Among the best-known PE funds are Blackstone Group*, Kohlberg Kravis Roberts (KKR)*, Goldman Sachs Capital Partners*, Carlyle Group, Permira, Apollo Management, Providence Equity, TPG Capital, Warburg Pincus, and Cerberus. Companies marked with an asterisk (*) are publically listed corporations; most PE funds are pivately managed. The selection above includes the largest ones by capital under management.
The private equity fund first appeared in the 1970's as a result of changes to ERISA. Institutional investors, usually pension funds, could be legal partners in an LLP; they also required a place to park assets with very high rates of return.
In the USA, PE funds have long been sinecures for the most powerful political dynasties: the Rockefellers, the Romneys, the Bushes, and others.
In the USA, PE funds have long been sinecures for the most powerful political dynasties: the Rockefellers, the Romneys, the Bushes, and others.
by Abu Yahya September 1, 2010
Get the private equity fund mug.(FINANCE) a situation in which an investor owns financial instruments (shares, bonds, financial derivatives, etc.) that will make the most money IF some other thing declines in value.
Therefore, one always has to take a short position on something in particular. A short position on gold means the investor expects gold to decline in value in the near future, and has bought various things to make money if it does.
Some ways to take a short position on X include:
(1) buying a put option on X
(2) writing a call option on X
(3) borrowing X and selling it (shorting a stock)
#3 is the classical way to take a short position. It was dangerous because a skillful trader could squeeze the shorts using a corner.
Therefore, one always has to take a short position on something in particular. A short position on gold means the investor expects gold to decline in value in the near future, and has bought various things to make money if it does.
Some ways to take a short position on X include:
(1) buying a put option on X
(2) writing a call option on X
(3) borrowing X and selling it (shorting a stock)
#3 is the classical way to take a short position. It was dangerous because a skillful trader could squeeze the shorts using a corner.
BILL: I guess you took a bath when the stock market tanked, huh?
ANA: Nope. I took a short position on all of the nine largest banks. Did rather well, thank you very much.
BIL: Sweet!
ANA: Nope. I took a short position on all of the nine largest banks. Did rather well, thank you very much.
BIL: Sweet!
by Abu Yahya April 5, 2010
Get the short position mug.foreign direct investment; includes direct capital investment in companies that have not yet issued stock. As opposed to portfolio investment (purchases of traded securities in a firm). Both FDI and portfolio investment refer to capital transfers from country to country.
by abu yahya September 28, 2008
Get the FDI mug.Latin, "thus"; used to indicate that an error in the original has been replicated in a quote.
When you're quoting someone else, and the original includes an error (spelling, fact, conception) it may be necessary to assure readers that (a) you noticed the error and (b) it is not yours, but that of the person you're quoting. Since it is a Latin expression, it needs to be italicized, and in the Urban Dictionary this means enclosing it in asterisks.
When you're quoting someone else, and the original includes an error (spelling, fact, conception) it may be necessary to assure readers that (a) you noticed the error and (b) it is not yours, but that of the person you're quoting. Since it is a Latin expression, it needs to be italicized, and in the Urban Dictionary this means enclosing it in asterisks.
His columns are full of brilliant insights such as this one:
"World War II erupted at Munich *sic* in 1941 *sic* because President Roosevelt *sic* was too weak-kneed to stand up to Hilter *sic*."
The man should not be allowed to go about unattended, let alone publish newspaper columns.
"World War II erupted at Munich *sic* in 1941 *sic* because President Roosevelt *sic* was too weak-kneed to stand up to Hilter *sic*."
The man should not be allowed to go about unattended, let alone publish newspaper columns.
by Abu Yahya March 7, 2009
Get the *sic* 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.
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
Get the trade surplus mug.