Backdoor Monetary Policy
Macroeconomics Banking
Non-transparent central bank actions that influence liquidity, rates, or markets outside standard public channels.
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Backward Induction
Microeconomics
A method for solving sequential games or decisions by analyzing from the final stage back to the first.
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Backward Integration
The expansion of a firm’s activities to include the production of inputs formerly sourced from outside.
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Backward-Bending Supply Curve
Labor Economics Microeconomics
A labor supply curve that slopes up at lower wages but bends backward at higher wages as income effects outweigh substitution effects.
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Backwardation
A situation in which the futures price of a commodity is lower than the spot price.
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Bad Bank
Banking Public Finance Risk Management
A vehicle that purchases and works out non-performing or distressed assets so core banks can clean their balance sheets.
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Bad Debt
Accounting Credit and Lending
Debt that is unlikely to be collected and must be recognized as a loss by the lender or seller.
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Bad Debt Provision
Accounting Credit and Lending Banking
An accounting charge that sets aside an allowance for expected losses on loans or receivables.
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Bad Money Drives Out Good (Gresham’s Law)
Macroeconomics Banking
When two forms of money circulate at a fixed rate, undervalued ‘good’ money is hoarded while overvalued ‘bad’ money remains in circulation.
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Balance
How economists use internal, external, and invisible balances to gauge an economy’s stability.
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Balance of Payments
An overview of the balance of payments, detailing its components, significance, and associated analytical frameworks.
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Balance of Trade
International Economics Macroeconomics
The difference between a country’s exports and imports of goods; a core part of the current account.
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Balance Sheet
A statement that shows a firm’s assets, liabilities, and equity at a point in time using the accounting equation.
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Balance-of-Payments Crisis
International Economics Macroeconomics
A situation where a country cannot finance external payments sustainably, triggering reserve losses, currency pressure, or default risk.
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Balanced Budget
When government revenues equal expenditures over a chosen period, avoiding net new borrowing.
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Balanced Budget Amendment
Public Finance Macroeconomics
A proposed constitutional rule requiring government expenditures not to exceed revenues within a fiscal year.
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Balanced Budget Multiplier
Macroeconomics Public Finance
In Keynesian models, equal increases in government spending and taxes raise output by exactly the spending increase.
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Balanced Growth Path
Macroeconomics
A trajectory where key aggregates—output, capital, and often consumption—grow at the same constant rate, keeping ratios stable.
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Balances with the Bank of England
Banking Macroeconomics
Reserve balances UK commercial banks hold at the Bank of England to settle payments and meet liquidity needs.
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Balancing Item
Economics Statistics
A statistical adjustment used when two theoretically equal aggregates do not match in measured data.
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Baltic Free Trade Agreement
International Economics
Baltic Free Trade Agreement - A free trade agreement between Estonia, Latvia, and Lithuania established in 1993 and remaining in place until the three countries joined the European Union in 2004.
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Banco del Sur
Development Economics International Economics
A South American regional development bank initiative intended to fund projects and reduce reliance on traditional multilateral lenders.
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Bandwidth (Nonparametric Estimation)
Econometrics Statistics
The smoothing window that controls how much neighboring data influence a nonparametric estimate.
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Bank
Banking Macroeconomics Credit and Lending
A financial institution that takes deposits, extends credit, and provides payment and financial services.
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Bank Account
Banking Personal Finance
An agreement with a bank to hold and manage funds, enabling deposits, withdrawals, and payments.
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Bank Deposit
Banking Macroeconomics
Money placed at a bank that becomes a bank liability and a depositor asset.
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Bank for International Settlements
Banking International Economics
An international institution that supports central bank cooperation, monetary stability, and prudential standards.
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Bank Loan
bank loan A loan from a bank to an individual or firm. Bank advances for large amounts or for business purposes are normally made against security, for example the title deeds of buildings or life insurance policies. Bank overdrafts or personal loans for small amounts are often unsecured if the customer is regarded as a good risk.
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Bank Note
Definition and explanation of bank notes in economics.
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Bank of Credit and Commerce International
An entry detailing the significance, collapse, and implications of the Bank of Credit and Commerce International (BCCI) in the banking sector.
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Bank of England
Definition and meaning of the Bank of England as the central bank of the United Kingdom.
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Bank Rate
A comprehensive entry detailing the definition, history, and implications of the Bank Rate.
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Bank Regulation
The application to banks of public controls stricter than those on businesses in general, justified by concerns that bank failures may disrupt the economy more profoundly than other business failures.
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Bank Run
An examination of bank runs, a situation characterized by massive withdrawals from a bank due to a loss of confidence from depositors.
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Banker's Draft
A comprehensive entry on the concept and application of a Banker's Draft in financial transactions.
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Bankers Automated Credit System
The system by which depositors instruct their banks to make payments to named accounts, widely used for payments such as dividends and wages.
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Banking
The provision of payments facilities, credit, and capital to individuals, firms, and the government.
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banking system
An overview and detailed breakdown of the banking system, encompassing traditional banks, central banks, regulatory bodies, and shadow banks.
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Bankruptcy
A legal arrangement for individuals unable to pay their debts, involving asset liquidation and creditor repayment.
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Bargaining
An exploration of the term bargaining in economics, including its definition, historical context, and analytical frameworks.
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Bargaining Power
The ability to obtain a large share of the possible joint benefits to be derived from any agreement.
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Barriers to Entry
A comprehensive overview of barriers to entry that obstruct new firms from entering a market or new workers from competing for employment.
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Barriers to Exit
Obstacles that make it costly for a firm to exit a market, thereby intensifying competition.
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Barter
An overview of the concept of barter, its historical context, definitions, and related analytical frameworks.
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Barter Economy
A comprehensive exploration of a barter economy, where goods and services are exchanged directly without a medium of exchange like money.
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Base Erosion and Profit Shifting (BEPS)
An analysis of Base Erosion and Profit Shifting (BEPS), focusing on the multinational corporate strategies to minimize tax liabilities by shifting profits to low-tax jurisdictions.
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Base Money
An overview of the term 'base money,' also known as the monetary base, and its significance in economics.
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Base Period
The period whose data are identified with an index of 100 (or sometimes 1) for the construction of an index number.
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Base Rate
An overview of the base rate, its definition, and its implications in economics and banking.
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Base-Weighted Index
A weighted average of prices or quantities, informed by the quantities or prices of the base period, fundamental in understanding price level changes over time.
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Basel Agreement
International risk-based capital adequacy standards established for banks in 1988 by the Basel Committee on Banking Supervision.
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Basel II
An entry explaining Basel II, the second Basel Agreement, aimed at creating an international standard on capital adequacy.
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Baseline
An economic projection illustrating how the economy would develop if existing trends and policies continue unchanged.
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Basic Rate
The foundational income tax band in the UK that applies a standard percentage to earnings within defined thresholds.
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basis point
Measurement unit for changes or differences in interest rates, equal to 1 per cent of 1 percentage point.
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Batch Production
Microeconomics
A production method where output is made in discrete runs (batches), trading off setup costs against flexibility and inventory.
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Battle of the Sexes
A game theory concept illustrating gains from coordination and the difficulties in achieving it
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Baumol’s law
The assertion that over time the size of the public sector will increase as a proportion of the economy, due to its relative labour intensity and inability to substitute capital for labor.
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Bayes Theorem
A foundational relationship in probability theory that connects conditional probabilities with marginal probabilities.
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Bayesian Econometrics
An approach to estimation and inference in econometrics using probability distributions to express uncertainty about parameters.
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Bayesian Inference
An approach to hypothesis testing that assesses which of two hypotheses, the null (H0) or the alternative (H1), is more likely to be correct, considering prior knowledge.
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BBB
An explanation of the BBB rating, a medium risk classification by Standard & Poor's for securities.
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Bear
Investments Trading Equities
An investor who expects prices to decline and positions to profit from falling markets.
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Bear Market
A stock market in which prices are expected to fall.
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Bearer Bond
A security where the person or organization holding the certificate of title is entitled to receive any interest and redemption payments.
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Before-tax Income
The income of an individual or company before deduction of direct taxes.
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Beggar-my-neighbour Policy
A policy that aims to benefit one country at the expense of others by mitigating economic issues internally, often worsening the issues for trading partners.
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Behavioral Economics
Behavioral Economics
How psychological biases, limited attention, and reference-dependent preferences shape economic choices and outcomes.
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Behavioural Equation
Definition and meaning of behavioural equation in economics
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Behavioural Insights Team
An overview of the Behavioural Insights Team (BIT), also known as the Nudge Unit, its inception, purpose, and contributions to public policy.
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Behavioural Theories of the Firm
Understanding the behavioural theories of the firm that look into the objectives of individuals and groups within firms rather than rigid profit maximization assumptions.
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Below-the-Line
Items following but not part of the profit-and-loss accounts of firms or the income sections of national income accounts.
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Benefit Principle
The principle that the cost of public expenditures should be met by those who benefit from them.
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Benefits
Economics Microeconomics Public Finance
The value or utility gained from an action, good, or policy, often analyzed at the margin.
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Benefits in Kind
The concept and implications of government provision of goods and services directly to citizens instead of monetary benefits.
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Benefits System
An overview of the benefits system, its purpose, various forms, and the economic implications.
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Benelux
A customs union of Belgium, the Netherlands, and Luxembourg
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Bergson–Samuelson Social Welfare Function
A framework in welfare economics that represents collective preferences and societal well-being.
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Bertrand Competition
An overview of Bertrand competition, focusing on its definition, historical context, and analytical frameworks.
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Best Linear Unbiased Estimator (BLUE)
Definition and meaning of the Best Linear Unbiased Estimator (BLUE) in statistics and econometrics.
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Best-Fit Line
A line on a scatter diagram representing the optimal relationship between two variables.
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Beta Coefficient
How the beta coefficient measures an asset’s sensitivity to market movements and informs expected returns.
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Beta Stocks
Shares in the second rank for frequency of trading on a stock exchange
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between-groups estimator
An estimator of the parameters in a linear regression model with panel data, using the time averages of the data for each cross-section unit.
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Beveridge Curve
A graph depicting the relationship between unemployment and the job vacancy rate, indicating labor market efficiency.
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Beveridge Report
A report on social security prepared by Sir William Beveridge during the Second World War, pivotal to the creation of the post-war welfare state in the UK.
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bias of an estimator
Understanding the concept of the bias of an estimator in economics and statistics
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Bid
An overview of the term bid, including its definition and relevance in economics, particularly in relation to hostile and takeover bids.
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Bid–Ask Spread
Definition and meaning of bid–ask spread in financial markets, detailing its significance and implications.
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Big Bang
Definition and meaning of the economic term 'Big Bang,' emphasizing the argument for rapid reforms.
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Big Four
A term used to describe either the four largest UK 'high street' banks or the four largest accounting firms.
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Big Mac Index
Big Mac Index, a measure introduced by The Economist in 1986, compares exchange rates to the cost of a Big Mac in different countries, illustrating purchasing power parity theory.
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Big Push
A doctrine in development economics that suggests the synchronized expansion of multiple sectors is necessary for the development of a poor country.
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Big Society
An agenda of the Conservative-Liberal Democrat coalition government in the UK, launched in 2010, aimed at giving power to local governments and encouraging community involvement.
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Bilateral Monopoly
A market situation wherein a single buyer faces a single seller in negotiations for price and quantity.
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Bilateral Trade
A situation where trade between two countries must balance or be financed directly between them.
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Bill
Definition and meaning of a bill as a short-dated security maturing in under a year
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Bill of Exchange
A short-dated security used to finance foreign trade.
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Billion
Definition and variations of the term 'billion' in economic contexts
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Bimodal Distribution
Definition and Meaning of Bimodal Distribution in Economics
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