- Industry: Economy; Printing & publishing
- Number of terms: 15233
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The time taken to find a new job. Because some people will devote all their time to this search, there will always be some frictional unemployment, even when there is otherwise full employment.
Industry:Economy
The big hitters of the financial markets: pension funds, fund-management companies, insurance companies, investment banks, hedge funds, charitable endowment trusts. In the United States, around half of publicly traded shares are owned by institutions and half by individual investors. In the UK, institutions own over two-thirds of listed shares. This gives them considerable clout, including the ability to move the prices in financial markets and to call company bosses to account. But because institutions mostly invest other people’s money, they are themselves prone to agency costs, sometimes acting against the best long-term interests of the people who trust them with their savings.
Industry:Economy
Products that are less in demand as consumers get richer. For normal goods, demand increases as consumers have more to spend
Industry:Economy
Does economic growth create more or less equality? Do unequal societies grow more or less slowly than equal ones? Economists have debated these questions for as long as anyone can remember. One problem is to agree which sort of inequality matters: equality of outcome (that is, income) or of opportunity? Another is how then to measure it. Equality of opportunity, which, in theory, should make a difference to growth, because it is about giving people the chance to make the most of their human capital, is probably beyond the ability of statisticians to analyze rigorously. The most often used measure of income inequality is the Gini coefficient. The evidence suggests that extreme poverty is more likely to slow growth than income inequality itself. This is because very poor people cannot buy the education they need to enable them to become richer and their children may be forced to forgo schooling in order to work for money. Economic growth has generally reduced inequality within a country. This has been partly as a result of redistributive tax and benefits systems, which have become so significant that they may now be causing slower growth in some countries. The availability of welfare benefits may have discouraged unemployed people from seeking out a better job; and the high taxes needed to pay for the benefits may have discouraged some wealthy people from working as hard as they would have done under a friendlier tax regime. However, the new economy may see inequality in rich countries widen again, thanks to its alleged winner-takes-all distribution of financial rewards.
Industry:Economy
When the supply or demand for something is insensitive to changes in another variable, such as price. (See elasticity. )
Industry:Economy
Adam Smith’s shorthand for the ability of the free market to allocate factors of production, goods and services to their most valuable use. If everybody acts from self-interest, spurred on by the profit motive, then the economy will work more efficiently, and more productively, than it would do were economic activity directed instead by some sort of central planner. It is, wrote Smith, as if an “invisible hand” guides the actions of individuals to combine for the common good. Smith recognized that the invisible hand was not infallible, however, and that some government action might be needed, such as to impose antitrust laws, enforce property rights, and to provide policing and national defense.
Industry:Economy
Keeping pace with inflation. In many countries, wages, pensions, unemployment benefits and some other sorts of income are automatically raised according to recent movements in the consumer price index. This allows these different sorts of income to retain their value in real terms.
Industry:Economy
The “good life” guide. Calculated since 1990 by the United Nations Development Program, the Human Development Index quantifies a country’s development in terms of such things as education, length of life and clean water, as well as income. Since the mid-1970s, the quality of life for humans throughout the world has improved enormously overall. America's human development index rose by around one-tenth between 1975 and 2001, for example. More spectacularly, during the same period, China's rose by around 40% and Indonesia's by nearly 50%. Even so, in 2001, some 54 countries were poorer than in 1990, and in 34, mostly in Africa and the former Soviet Union, life expectancy had fallen, reversing an impressive long-term trend, largely because of the HIV/AIDS epidemic and crime. Some 21 countries had a lower overall human development index in 2003 than in 1990.
Industry:Economy
Exports and imports of things you cannot touch or see: services, such as banking or advertising and other intangibles, such as copyrights. Invisible trade accounts for a growing slice of the value of world trade
Industry:Economy
The stuff that enables people to earn a living. Human capital can be increased by investing in education, training and health care. Economists increasingly argue that the accumulation of human as well as physical capital (plant and machinery) is a crucial ingredient of economic growth, par¬ticularly in the new economy. Even so, this conclusion is largely a matter of theory and faith, rather than the result of detailed empirical analysis. Economists have made little progress in solving the tricky problem of how to measure human capital, even within the same country over time, let alone for comparisons between countries. Levels of spending on, say, education are not necessarily a good indicator of how much human capital an education system is creating; indeed, some economists argue that higher education spending may be a consequence of a country becoming wealthy rather than a cause. Never the less, even modest estimates of the stock of human capital in most countries suggests that it would pay to greatly increase investment in medical technologies that would extend the working lives of most people. The non-economic benefits would be worth having, too.
Industry:Economy
