Economics/Glossary

Main Article

Discussion

A

Adverse selection [r]: a partial market failure that occurs when there are traders who take advantage of asymmetric information, raising uncertainty and leading to a reduction in the value of its products. ^[e]
Agency cost [r]: Add brief definition or description
Applied statistics [r]: the practice of collecting and interpreting numerical observations for the purpose of generating information. ^[e]
Arbitrage [r]: transactions to take advantage of a price differences of a product in different markets by buying where it is cheap and selling where it is dear. The possibility of arbitrage often prevents the occurrence of price differences. ^[e]
Asset price bubble [r]: The condition of an asset market in which price is governed by speculators' expectations that it will increase. ^[e]
Asymmetric information [r]: a situation in which a seller has information that is not available to potential buyers - or vice-versa. ^[e]
Austrian School of economics [r]: A school of economists who reject the tenets of macroeconomics and oppose the practice of collective economic management; and whose methodology concentrates upon the decisions of individuals and the operation of the market mechanism. ^[e]
Automatic stabilisers [r]: the tendency in times of falling economic activity for the government spending to rise, and for tax receipts to fall - and the reverse tendency in times of rising economic activity ^[e]

B

"Bad bank" [r]: A subsidiary, or separate corporation, created to hold and manage non-performing assets transferred to it by a rescued bank. ^[e]
Balance sheet recession [r]: A recession that occurs when banks or households attempt to correct a sudden increase in their leverage (brought about, for example, by the bursting of an asset price bubble), as a result of which banks use deposits to increase their reserves rather to give credit, and householders use income to pay off debt rather than to make purchases. ^[e]
Banking panic [r]: A widespread fear of insolvency because of uncertainty concerning the true value of banking assets. ^[e]
Base money [r]: currency in circulation plus bank vault cash plus deposits held by banks at the central bank (termed "high-powered money" in the US, and referred to as M0 in the UK). ^[e]
Basis point [r]: (bp) one hundredth of a percentage point . ^[e]
Bill (finance) [r]: {a) A loan with a duration of no more than a year (b)a documentary record of short-term indebtedness. ^[e]
Bill of Exchange [r]: A written order to pay the holder a stated sum of money at a stated date (otherwise known as a "draft", the person who is paid being termed the "drawer"). ^[e]
Bond (finance) [r]: a fixed-interest security issued by governments, companies, banks and others. ^[e]
BRICs [r]: Brazil, Russia, India and China - a group of countries that acts as a pressure group within the Group of Twenty. ^[e]
Broad money [r]: cash, current account deposits in banks and other financial institutions, savings deposits and time-restricted deposits (see also high-powered money). ^[e]
Broker [r]: Add brief definition or description
Bubble (economics) [r]: Add brief definition or description
Budget balance [r]: Add brief definition or description
Budget deficit [r]: Add brief definition or description