Banking
The business of taking deposits, extending credit, and providing payment and financial intermediation services.
Banking System
The network of banks, central-bank institutions, and supporting rules through which credit and payments are organized.
Bankruptcy
A legal process for dealing with debts that cannot be repaid in full.
Bargaining
A process in which parties negotiate over how to divide gains from exchange or cooperation.
Bargaining Power
The ability of a party in negotiation to secure a larger share of the gains from agreement.
Barriers to Entry
Obstacles that make it costly or difficult for new firms to enter a market.
Barriers to Exit
Obstacles that make it costly or difficult for firms to leave a market.
Barter
Direct exchange of goods or services without using money as the payment medium.
Barter Economy
An economy in which exchange takes place through direct trade rather than through money.
Base Erosion and Profit Shifting (BEPS)
Tax-planning strategies that reduce taxable profit in higher-tax countries and shift it elsewhere.
Base Money
The most liquid form of money, consisting mainly of currency in circulation and bank reserves.
Base Period
The reference period against which an index number is compared.
Base Rate
A benchmark interest rate used to price loans and influence borrowing conditions.
Base-Weighted Index
An index number that measures change using weights fixed in a chosen base period.
Basel Agreement
The original international agreement that set minimum capital standards for banks relative to the riskiness of their assets.
Basel II
The second Basel banking framework, built around minimum capital requirements, supervisory review, and market discipline.
Baseline
A baseline is the reference case used to compare actual outcomes, policy changes, or alternative scenarios.
Basic Rate
In UK taxation, the basic rate is the standard marginal income-tax rate applied to taxable income within the basic-rate band.
Basis Point
A basis point is one hundredth of a percentage point, used to describe small changes in rates, yields, and spreads.
Batch Production
Batch production means making goods in groups or runs rather than as a continuous flow or as one-off custom output.
Battle of the Sexes
A coordination game in which both players prefer coordinating to mismatching, but each prefers a different coordinated outcome.
Baumol's Law
Baumol's law says service sectors with slow productivity growth become relatively more expensive as economy-wide wages rise.
Bayes Theorem
Bayes theorem is the rule for updating probabilities after observing new evidence.
Bayesian Econometrics
Bayesian econometrics estimates economic models by combining prior beliefs with observed data to form posterior distributions.
Bayesian Inference
Bayesian inference updates probabilities or parameter beliefs by combining prior information with observed data.
BBB
BBB is a credit rating at the lower end of investment grade, indicating adequate capacity to meet obligations but meaningful exposure to adverse conditions.
Bear
A bear is an investor or market participant who expects prices to fall and positions accordingly.
Bear Market
A bear market is a broad, sustained decline in asset prices accompanied by pessimism, tighter financial conditions, or both.
Bearer Bond
A bearer bond is a bond owned by whoever physically holds the certificate rather than by a registered owner.
Before-Tax Income
Before-tax income is income received before direct taxes are deducted.
Beggar-My-Neighbour Policy
A beggar-my-neighbour policy tries to improve one country's economy by shifting demand, unemployment, or adjustment costs onto other countries.
Behavioural Economics
How psychological biases, limited attention, and reference-dependent preferences shape economic choices and outcomes.
Behavioural Equation
A behavioural equation is a structural equation that represents how households, firms, or other agents respond to incentives and constraints.
Behavioural Theories of the Firm
Behavioural theories of the firm explain firms as organizations with bounded rationality, routines, and multiple internal objectives rather than as single profit-maximizing calculators.
Below-the-Line
Below-the-line items are entries recorded outside the main operating or income result, often relating to financing, appropriation, or capital transactions.
Benefit Principle
The benefit principle says taxes or charges should, as far as possible, be paid by those who benefit from the public spending or service.
Benefits
Benefits are the gains in utility, willingness to pay, or welfare created by consuming a good, taking an action, or adopting a policy.
Benefits in Kind
Benefits in kind are goods or services provided directly rather than paid out as cash.
Benefits System
A benefits system is the set of public programs that provide income support or services when households face low income, unemployment, disability, or other need.
Benelux
Benelux is the economic union of Belgium, the Netherlands, and Luxembourg, often treated as an early example of regional economic integration.
Bergson-Samuelson Social Welfare Function
The Bergson-Samuelson social welfare function represents social welfare as a function of individual utilities, making value judgments explicit.
Bertrand Competition
Bertrand competition is a model in which firms compete by setting prices rather than quantities.
Best Linear Unbiased Estimator
A best linear unbiased estimator is a linear unbiased estimator with the smallest variance among all linear unbiased estimators.
Best-Fit Line
A best-fit line is the line that summarizes the average linear relationship between two variables in a scatterplot.
Beta Coefficient
The beta coefficient measures how strongly an asset's returns tend to move with the market as a whole.
Between-Groups Estimator
The between-groups estimator uses group averages in panel data to estimate how outcomes differ across entities rather than within each entity over time.
Beveridge Curve
The Beveridge curve plots unemployment against job vacancies and is used to study labor-market tightness and matching efficiency.
Beveridge Report
The Beveridge Report was the 1942 UK report that helped shape the postwar welfare state through proposals for social insurance and full-employment policy.
Bias of an Estimator
The bias of an estimator is the difference between its expected value and the true parameter it is trying to estimate.
Bid
A bid is an offer price made by a buyer in a market, auction, or takeover process.
Bid-Ask Spread
The bid-ask spread is the difference between the highest posted buying price and the lowest posted selling price for an asset.
Big Bang
In economics, a big bang is a strategy of rapid, comprehensive reform rather than gradual, step-by-step adjustment.
Big Mac Index
The Big Mac Index is an informal purchasing-power-parity comparison that uses the price of a Big Mac across countries to illustrate currency misalignment.
Big Push
The big push is a development-economics idea that poor countries may need coordinated large-scale investment across sectors to escape low-level traps.
Bilateral Monopoly
A bilateral monopoly is a market with one seller and one buyer, so price and quantity are determined by bargaining rather than by competitive market forces alone.
Bilateral Trade
Bilateral trade is trade conducted directly between two countries, often under a specific agreement or balancing arrangement.
Bill
In finance, a bill is a short-term debt instrument, usually sold at a discount and maturing in less than a year.
Bill of Exchange
A bill of exchange is a written order requiring payment of a specified sum at a specified time, commonly used in trade finance.
Billion
A billion means one thousand million in modern economic and financial usage.
Bimodal Distribution
A bimodal distribution has two distinct peaks, often showing that one dataset actually combines two different groups.
Binary Choice Models
Binary choice models estimate the probability of a yes-or-no outcome such as working, defaulting, or buying.
Binomial Distribution
The binomial distribution gives the probability of getting a fixed number of successes in a fixed number of independent trials.
Binomial Pricing
Binomial pricing values an option by letting the underlying asset move up or down step by step and ruling out arbitrage.
Biodiversity Index
A biodiversity index summarizes how many species are present and how evenly they are distributed in an ecosystem.
Biological Interest Rate
The biological interest rate is the return generated by population growth in simple overlapping-generations models.
Black Economy
The black economy consists of production, trade, and income that are hidden from the state to avoid tax, regulation, or legal detection.
Black Market
A black market is an illegal market in which goods or services are traded outside official rules, often at prices different from the legal price.
Black Monday
Black Monday was the global stock-market crash of October 19, 1987, when equity prices fell sharply in a single day.
Black Swan
A black swan is a rare event with very large consequences that standard models often fail to anticipate.
Black-Scholes Equation
The Black-Scholes equation is the no-arbitrage differential equation used to value options in continuous time under standard assumptions.
Blair House Agreement
The Blair House Agreement was a 1992 U.S.-EC deal that helped break the agricultural deadlock in the Uruguay Round trade talks.
Blue Book
The Blue Book is the United Kingdom's main national-accounts publication, reporting GDP, income, expenditure, and related macroeconomic data.
Blue Chip
A blue-chip stock is the share of a large, established company with a long record of profitability, liquidity, and market credibility.
Blue-Collar Worker
A blue-collar worker is a worker whose job is centered on manual, technical, production, maintenance, or transport tasks.
Bond
A bond is a debt security in which an investor lends money to an issuer in exchange for coupons and repayment at maturity.
Bond Default Swap
A bond default swap usually refers to a credit default swap written on a bond, transferring default risk from the protection buyer to the protection seller.
Bond-Rating Agency
A bond-rating agency evaluates the creditworthiness of bond issuers and assigns ratings that summarize default risk.
Bonus
A bonus is pay given in addition to base wages or salary, usually to reward performance, retention, or a specific outcome.
Bonus Issue
A bonus issue is a distribution of additional shares to existing shareholders without requiring them to pay cash for the new shares.
Book Value
Book value is the accounting value recorded on the balance sheet, often measured for a firm as assets minus liabilities.
Boom
A boom is a phase of rapid economic expansion marked by strong spending, rising output, tight labor markets, and often upward pressure on prices.
Bootstrap
A resampling technique that approximates a statistic’s sampling distribution by repeatedly sampling with replacement from observed data.
Borda Count
A voting system where voters rank alternatives, assigning points based on ranks, which are then summed to determine the winner.
Borrowing
The act of incurring debts to finance spending, applicable to individuals, firms, and governments.
Bottleneck
An in-depth exploration of the economic concept of bottlenecks, focusing on its definition, context, and relevance.
Bottom Line
The profit or loss on an activity, typically shown at the foot of financial statements.
Bounded Rationality
An examination of the concept of bounded rationality and its significance in economic theory.
Box–Cox Transformation
An overview and analysis of the Box–Cox transformation, its definition, application, and relevance in economics.
Box–Jenkins Approach
A method for identification, estimation, and diagnostic checking of autoregressive integrated moving average (ARIMA) models in time series analysis.
Boycott
An examination of the term 'boycott' in economic contexts, its origins, applications, and significance
BP Curve
The set of income–interest rate combinations where the balance of payments is in equilibrium within the IS–LM–BP framework.
Brady Plan
A 1989 agreement for restructuring Mexico’s external debt, proposed by the US Secretary of the Treasury.
Brain Drain
A pejorative description of the tendency for talented individuals to migrate from poorer countries to richer countries in search of better employment opportunities and living standards.
Branch Banking
The banking system under which banks are allowed to have branches. Branch banking in some countries, including the United States, has sometimes been restricted to reduce the monopoly power of banks.
Brand
A term used to identify the maker or distributor of a good, with historical roots and significant economic implications.
Brand Loyalty
An exploration of brand loyalty, its economic implications, and its impact on consumer behavior and market dynamics.
Brand Recognition
Understanding the concept of Brand Recognition in Economics and Marketing.
Brandt Report
The report of the Independent Commission on International Development Issues aimed at fostering North-South cooperation, chaired by Willy Brandt, and published in 1980.
Break-Even
Understanding the Break-Even Point in Economics
Break-up Value
The sum a business could realize by ceasing operation entirely and selling off its assets.