100 Per Cent Gold Backing
A monetary rule where currency issued is fully backed by gold reserves at a fixed conversion rate.
1992 Programme
The European Community plan to complete a single internal market by removing barriers to trade, capital, services, and labor mobility.
A Priori
Reasoning from assumptions and logic before looking at data, often used to build economic models.
A-Share
Usually a mainland Chinese share listed in renminbi, though some firms also use Class A share labels for voting-rights structures.
AAA Rating
The highest major credit rating, used to signal very low expected default risk.
Abatement
Any action that reduces pollution or other harmful environmental damage.
Abatement Cost
The cost of reducing pollution, either for one more unit or for a total amount of cleanup.
Ability and Earnings
How differences in skill and other productive traits affect wages, and why that complicates estimates of the return to education.
Ability to Pay
The tax principle that people with greater economic capacity should bear more of the tax burden.
Abnormal Obsolescence
An unexpected loss of asset value caused by a technology, regulatory, or demand shock that shortens useful life.
Abnormal Profit
Profit above normal profit after both explicit and implicit costs are taken into account.
Absolute Advantage
The ability to produce a good or service using fewer inputs than another producer.
Absorption
Domestic spending on consumption, investment, and government purchases, often used to analyze trade and current-account balances.
Abstinence
An older economic term for postponing present consumption in order to save and invest for the future.
Abuse of Dominant Position
Anticompetitive conduct by a firm with substantial market power that harms competition rather than merely outperforming rivals.
Accelerated Depreciation
A tax or accounting method that allows larger depreciation deductions in the early years of an asset's life.
Accelerator
A macro idea linking investment to changes in output: rising output raises desired capital and therefore investment.
Acceptance
In trade finance, the act of signing a bill of exchange and becoming legally obligated to pay it at maturity.
Acceptance Region
The set of test-statistic values for which a hypothesis test does not reject the null at a chosen significance level.
Accepting House
A financial intermediary that accepts bills of exchange and guarantees payment at maturity, improving liquidity in trade finance.
Accession Criteria
The political, economic, and institutional conditions a country must satisfy to join the European Union.
Accommodatory Monetary Policy
A monetary-policy stance that keeps financial conditions easy to support spending, output, and employment.
Accounting
The system for recording and reporting economic transactions so firms, lenders, investors, and regulators can make decisions.
Accounting Period
The reporting interval covered by a set of financial statements, usually a fiscal year or a quarter.
Accounting Profit
Profit measured under accounting rules after subtracting explicit recorded costs from revenue.
Accounts
How accounts organize financial records and reduce information problems in firms and public institutions.
Accounts Payable
Short-term obligations to suppliers created when a firm buys goods or services on credit.
Accounts Receivable
Money owed to a firm by customers for goods/services already delivered; a key working-capital item tied to trade credit.
Accrual Rate
The share of pensionable pay a defined-benefit plan credits for each year of service.
Acquisition
A deal in which one firm buys control of another firm or its assets.
Acquisitions Approach
A CPI approach that records prices when households acquire goods and services rather than when they consume service flows over time.
Active Labour Market Policies
Programs that try to improve employment outcomes by helping workers find jobs, build skills, or become cheaper to hire.
Actuarial Assumption
A forecast about mortality, returns, expenses, or behavior used to price and value insurance and pension promises.
Actuarially Fair Odds
Odds or premiums set equal to expected loss before expenses, capital costs, and risk loadings are added.
Actuary
A specialist who uses probability, statistics, and finance to value uncertain future cash flows and manage risk.
Ad Valorem Tax
A tax charged as a percentage of the value or price of the item being taxed.
Adaptation
Investment and behavior change that reduces the damage caused by climate change.
Adaptive Expectations
A backward-looking expectations rule in which forecasts are adjusted gradually in response to past forecast errors.
Adjustable Peg
An exchange-rate regime that keeps a currency near a fixed parity most of the time but allows occasional realignment.
Adjusted R-Squared
A version of R-squared that penalizes models for adding predictors that do not improve fit enough.
Adjustment
The process by which markets, firms, households, or data series move toward a new position after a shock or new information.
Adjustment Costs
Costs that make firms or households change prices, employment, investment, or other decisions gradually instead of instantly.
Adjustment Programme
A package of policies used to correct a balance-of-payments crisis, restore external financing, and stabilize the economy.
Administered Price
A price set or strongly shaped by a government, regulator, or dominant institution rather than left to market clearing alone.
Administration
An insolvency procedure in which an administrator takes control of a distressed company to preserve value and improve outcomes for creditors.
Adoption
The decision by firms, households, or governments to start using a new technology, product, or practice.
Advance Corporation Tax
A former UK tax system under which companies paid tax when distributing dividends, with the payment credited against corporation tax.
Advanced Economies
Countries with high incomes, diversified production, stronger institutions, and typically deeper financial and policy capacity than emerging economies.
Advances
A broad banking term for credit extended to customers, including overdrafts, working-capital facilities, and other loans.
Advantage
In economics, advantage usually refers to absolute advantage or comparative advantage in production, trade, or specialization.
Adverse Selection
A problem caused by hidden information before a transaction, where the riskiest or lowest-quality participants are most likely to accept the offered terms.
Adverse Supply Shock
A negative shock that raises firms' costs or reduces productive capacity, pushing prices up and output down in the short run.
Advertising
Paid communication used by firms to inform, persuade, and influence demand, competition, and product differentiation.
Advisory, Conciliation and Arbitration Service (ACAS)
A UK public body that helps employers and workers resolve disputes at lower cost than prolonged conflict or litigation.
Affirmative Action
Policies designed to reduce persistent gaps in opportunity and representation for historically disadvantaged groups.
After-Sales Service
Support, repairs, warranties, and spare-parts access that shape the full economic value of a product after purchase.
After-Tax Income
Income remaining after direct taxes are paid, which helps determine household consumption, saving, and work incentives.
Age-Dependency Ratio
A ratio comparing dependent age groups with the working-age population, used to gauge demographic pressure on labor income and public finances.
Age-Earnings Profile
The typical pattern by which earnings rise, level off, and sometimes decline across a worker's life cycle.
Agency Cost
The cost created when agents do not perfectly act in the principal's interest and resources must be spent on incentives, monitoring, and control.
Agency Problem
The problem that arises when a principal delegates decisions to an agent whose incentives or information differ from the principal's.
Agency Theory
A framework for analyzing how contracts, incentives, and monitoring can align an agent's behavior with a principal's goals under imperfect information.
Agent-Based Modelling
A computational approach that simulates many interacting agents and studies the macro patterns that emerge from their behavior.
Agglomeration Economies
Productivity and cost advantages that arise when firms and workers cluster geographically.
Aggregate Data
Data created by combining many observations into totals, averages, shares, or rates for a group or economy.
Aggregate Demand
Total planned spending on final goods and services in an economy at each overall price level.
Aggregate Demand Schedule
A schedule showing planned expenditure at different levels of income or output in the Keynesian-cross framework.
Aggregate Production Function
A relationship showing how total output depends on aggregate inputs such as capital, labor, and productivity.
Aggregate Supply
The amount of real output firms are willing to produce at different overall price levels, given input costs, expectations, and productive capacity.
Aggregation
The process of combining many individual values into macro-level totals, averages, or indexes.
Aggregation Problem
The difficulty of representing a heterogeneous economy with a few aggregate variables without distorting the underlying relationships.
Agricultural Protection
Policies such as tariffs, quotas, and subsidies that raise domestic farm prices or incomes relative to world-market outcomes.
Aid
A transfer of money, goods, or services intended to relieve hardship or support development, with important trade-offs around incentives and effectiveness.
Aid to Families with Dependent Children
A former U.S. means-tested cash assistance program whose structure raised classic questions about welfare support and work incentives.
Aid-in-Kind
Aid provided as goods or services rather than cash, often used when targeting or broken markets matter.
Aitken Estimator
The generalized least squares estimator used when regression errors are correlated or have non-constant variance.
Allais Paradox
A famous violation of expected utility theory in which people treat certainty differently from nearby high probabilities.
Almon Distributed Lag
A polynomial distributed-lag method that smooths lag coefficients and reduces parameter count in time-series regression.
Almost Sure Convergence
A strong form of probabilistic convergence in which a sequence converges for every outcome except on a set of probability zero.
Alpha Stocks
A historical London market classification for the most actively traded shares in a dealer market.
Altruism
Preferences that place positive weight on other people's well-being, affecting giving, cooperation, and public-goods provision.
Amalgamation
A business combination in which firms consolidate their assets and liabilities under one corporate structure.
Ambiguity
A situation where outcomes may be known but the probabilities attached to them are not reliably pinned down.
American Economic Association
A professional association that publishes economics research, runs conferences, and helps organize the economics job market.
Amortization
The systematic repayment or cost allocation of a loan or intangible asset over time.
Analysis of Variance
A statistical method for testing whether group means differ by comparing between-group variation with within-group variation.
Animal Spirits
A Keynesian idea describing how confidence, sentiment, and spontaneous optimism can influence spending and investment.
Announcement Effect
A change in prices or decisions today caused by credible news about future policy, earnings, or other economically relevant events.
Annual General Meeting (AGM)
A formal shareholder meeting used to review disclosures, vote on governance matters, and hold managers accountable.
Annual Percentage Rate (APR)
A standardized annual borrowing-cost measure that includes interest plus certain loan fees so credit offers can be compared more fairly.
Annual Population Survey
A large U.K. household survey used to estimate employment, unemployment, and related social and labor-market outcomes.
Annual Report and Accounts
A yearly package of narrative disclosures and audited financial statements used to reduce information asymmetry.
Annualized Growth Rate
A short-period growth rate converted into a one-year equivalent by assuming the same pace continues and compounds.
Annuity
A contract that converts savings into a stream of payments, often used to manage retirement income and longevity risk.
Annuity Factor
The present value of a stream of equal payments and the key bridge between a lump sum and periodic income.
Annuity Rate
The payout rate that turns a premium or lump sum into periodic annuity income.
Anomalies in Economics
Systematic patterns in data or behavior that do not fit a commonly used benchmark model.
Anti-Competitive Practice
Conduct that weakens rivalry and allows firms to raise price, lower quality, or block entry.
Anti-dumping Action
A trade-remedy investigation into whether imports are dumped and whether they injure a domestic industry.