Economic Growth

Accelerator, Accelerator Principle
The Accelerator Principle is an economic concept that proposes investment levels respond to growth in output, suggesting that changes in the rate of output growth result in changes in investment.
Board of Governors (of the Federal Reserve System)
The seven-member managing body of the Federal Reserve System, commonly called the Federal Reserve Board, which sets policy on banking regulations and the money supply.
BRIC
BRIC is an acronym denoting the economies of Brazil, Russia, India, and China, which experienced rapid growth in the 2000s and are predicted to overtake many Western economies by 2050. Related acronyms like BRICET and BRIMC include other emerging markets.
Bull Market
A bull market signifies a prolonged rise in the price of stocks, commodities, or bonds. It reflects investor optimism and confidence, often fueled by strong economic indicators and corporate earnings.
Capital Deepening
Capital deepening refers to the process of increasing the amount of capital per worker in an economy. This typically means that each worker has more tools, equipment, or technology to use in their work, leading to higher productivity and economic growth.
Capital Formation
Capital formation refers to the creation or expansion of capital through savings, which are then invested in buildings, machinery, equipment, and other assets that produce goods and services, thereby contributing to economic growth.
Capital Outflow
Capital outflow refers to the exodus of capital from a country, driven by a combination of political and economic factors. Domestic and foreign owners of assets may sell their holdings and relocate their money to countries with more political stability and economic growth potential. Large capital outflows may prompt countries to impose currency controls or other measures to restrict the movement of money.
Capital Resource
Capital resources are assets such as factories, buildings, and equipment used in the production of goods. These are crucial for the growth and development of industries.
Capital Widening
Capital widening in macroeconomics refers to the process of increasing an economy's capital stock to enhance production levels.
Confederation of British Industry (CBI)
The Confederation of British Industry (CBI) is a UK-based organization with a mission to represent and advocate for business interests at the national and international level. It engages in policy development and lobbying to influence regulations and promote economic growth.
Constant Returns to Scale
Constant Returns to Scale refers to a situation in economic production where the amount of output changes at the same rate as the quantity of inputs used. For example, a doubling of raw materials and labor would result in a doubling of the final product.
Consumer Confidence Survey
A leading indicator of consumer spending that gauges public confidence about the health of the U.S. economy through a survey of opinions on various economic factors.
Easy Money
Easy money refers to a state of the national money supply when the Federal Reserve System allows ample funds to build in the banking system, resulting in lowered interest rates and increased loan accessibility, which encourages economic growth and can potentially lead to inflation.
Economic Growth
Economic growth refers to the increase, from period to period, of the real value of an economy's production of goods and services, commonly expressed as an increase in Gross Domestic Product (GDP).
Emerging Market
An emerging market refers to a foreign economy that is developing due to the spread of capitalism and has created its own stock market. These markets are analogous to small growth companies, possessing high potential coupled with high risk.
Federal Open Market Committee (FOMC)
The Federal Open Market Committee (FOMC) is a key committee within the Federal Reserve System responsible for setting short-term monetary policy in the United States. The FOMC is instrumental in regulating the money supply and influencing economic conditions to achieve sustainable economic growth.
Fiscal Policy
Fiscal policy involves the strategic use of government spending and taxation to influence a nation's macroeconomic conditions. It plays a crucial role in managing economic cycles by affecting demand, employment, inflation, and overall economic growth.
Foreign Trade Multiplier
The Foreign Trade Multiplier is a concept in economics that measures the increase in a country's GDP due to efficiencies and interconnections of foreign trade activities. It demonstrates how trade can amplify economic growth by leveraging the comprehensive benefits of exporting and importing.
Goldilocks Economy
A colloquial term for an economy that combines low inflation with steady economic growth. Such an economy is 'not too hot, not too cold, but just right,' similar to the porridge in the story of Goldilocks and the Three Bears.
Gross National Product (GNP)
Gross National Product (GNP) is a measure of the economic output of a country, accounting for the market value of all goods and services produced by the residents of the country, whether located domestically or abroad.
Growth Accounting
Growth accounting is a method used in economics to determine the contribution of different factors (such as labor, capital, and technology) to economic growth.
Help Wanted Advertising
Help wanted advertising consists of classified newspaper advertisements by job categories, placed by management seeking potential employees. These ads are crucial economic indicators signaling job opportunities and economic growth.
IMF (International Monetary Fund)
The International Monetary Fund (IMF) is an international financial institution that provides monetary cooperation and financial stability to its member countries, aiming to facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
Industrial Development Board (IDB)
An Industrial Development Board (IDB) is a governmental or quasi-governmental entity established to promote and support economic development within a specific jurisdiction. Its primary role is to attract, retain, and expand businesses and industries to enhance the local economy, create jobs, and improve the quality of life for residents.
Industrial Revenue Bond
An industrial revenue bond (IRB) is a type of municipal bond issued to finance industrial development projects for private corporations. They are typically used for the construction or acquisition of facilities and equipment, encouraging economic growth and job creation.
Inflationary Gap
An inflationary gap occurs when aggregate demand exceeds aggregate supply, causing price increases in a fully employed economy or production increases if the economy is not at full employment. This phenomenon is often attributed to government deficits and excess spending.
International Monetary Fund (IMF)
An international organization comprising 184 member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance-of-payments adjustment. The IMF, founded in 1945, is headquartered in Washington, D.C.
Intervention
Intervention in economics refers to government economic activity with the objective of influencing economic growth, controlling inflation, impacting the composition of the economy's output, and more.
Invention
In economics, invention refers to the development of entirely new technologies or methods of production, distinguishing it from innovation which focuses on improving existing technologies and methods.
Investment Expenditure
Investment expenditure, also known as capital expenditure, is the spending by businesses or governments on long-term assets to generate future growth.
Investment Strategy
An investment strategy is a plan to allocate assets among various investment choices such as stocks, bonds, cash equivalents, commodities, and real estate. An effective investment strategy considers factors like interest rates, inflation, economic growth, the investor's age, risk tolerance, available capital, and future capital needs.
Malthusian Law of Population
The Malthusian Law of Population is a proposition by the early 19th-century philosopher Thomas Malthus that suggests economic growth occurs more slowly than population growth, implying that general prosperity is impossible. Malthus did not account for the rapid increases in productivity brought on by industrialization.
Manufacturing and Trade Inventories and Sales
A key economic indicator representing the combined values of trade sales and shipments by manufacturers, as well as values of inventories and business sales. The inventory rates of change indicate the growth or contraction within the economy.
Marginal Propensity to Save (MPS)
The Marginal Propensity to Save (MPS) represents the proportion of additional income that is saved rather than consumed by households. It plays a critical role in determining the economy's potential for investment and growth.
Mature Economy
A mature economy refers to the economy of a nation whose population has stabilized or is declining and whose economic growth is no longer robust.
Momentum
Momentum refers to the rate of acceleration of an economic, price, or volume movement. It signifies the strength and likelihood of continued growth in these areas.
Monetary Policy Committee (MPC)
The Monetary Policy Committee (MPC) is a body within central banks that is responsible for setting the interest rates and other monetary policies to achieve economic stability and growth.
Natural Rate of Growth
The rate of growth in national income that maintains the current level of employment and wages. This rate equals the growth rate of the labor force added to the rate of productivity.
No-Growth
No-growth describes a condition of little or no economic expansion as measured by changes in the Gross Domestic Product (GDP).
North American Free Trade Agreement (NAFTA)
The North American Free Trade Agreement (NAFTA) was a trilateral trade agreement between Canada, Mexico, and the United States aimed at reducing trade barriers and promoting economic growth. It was replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020.
Okun's Law
An empirical relationship between unemployment and gross domestic product (GDP), developed by economist Arthur Okun, which states that for every 1% increase in unemployment, there is a corresponding 2% decrease in the national GDP.
Personal Consumption Expenditures (PCE)
Personal Consumption Expenditures (PCE), provided by the Bureau of Economic Analysis (BEA), measure the goods and services purchased by households and nonprofit institutions serving households (NPISHs) residing in the United States.
Potential GDP
Potential GDP is the maximum feasible level of Gross Domestic Product (GDP) that an economy can achieve when its resources, including capital and labor, are fully utilized.
Prosperity
A situation characterized by economic growth, low unemployment, and a general sense of well-being among the majority of the economy's population.
Pump Priming
An economic policy of increasing government expenditures and/or reducing taxes in order to stimulate the economy to higher levels of output. Pump priming measures are temporary, aimed at fostering spontaneous and sustained economic growth.
Securities Markets
Securities markets are venues where securities are bought and sold, encompassing both organized exchanges and over-the-counter (OTC) markets. These markets facilitate the flow of capital from investors to companies, enabling economic growth and liquidity.
Service Sector
The service sector is a crucial part of the economy, encompassing businesses that provide services rather than tangible goods. This sector is significant for employment creation and contributions to the Gross Domestic Product (GDP).
Small Business
According to the U.S. Department of Commerce, a small business is defined as a business employing less than 100 people. Small businesses play a disproportionately important role in innovation as well as in economic and employment growth in the United States.
Stagnation
Stagnation refers to a period of no or slow economic growth, or economic decline in real (inflation-adjusted) terms. Economic growth of about 1% or less per year is generally taken to constitute stagnation.
Tax Holiday
A tax holiday is a government incentive program that offers a temporary reduction or elimination of tax payments for businesses, providing economic impetus for specific activities such as export growth or new industry development.
Tax Increment Financing (TIF)
Tax Increment Financing (TIF) is a public financing method used by municipalities to subsidize costs for development or redevelopment projects in distressed areas, with the goal of stimulating economic growth and increasing future tax revenues.
Trickle Down Theory
The Trickle Down Theory is an economic concept suggesting that policies benefiting the wealthy and businesses can ultimately benefit lower-income individuals through increased economic activity.
Unbalanced Growth
Economic growth in which certain sectors of the economy grow faster than others, causing economic dislocations or economically risky over-reliance on specific sectors.
Upswing
An upswing refers to a period characterized by an improvement or acceleration in economic growth, also known as an economic expansion. This phase typically features increased economic activity, rising GDP, higher employment rates, and often improvements in consumer and business confidence.

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