An activist policy is a government economic policy that uses elements of monetary and/or fiscal policy to respond dynamically to current economic conditions with the objective of stabilizing the economy.
An ad valorem tax is calculated as a percentage of the assessed value of an item, such as property, goods, or services. Common examples include property taxes and value-added taxes (VAT).
An administered price is a price of a good that is specified by a governmental or some other nonmarket agency. Examples include wage price controls and rent controls.
The American Economic Association (AEA) is an organization of economists, primarily consisting of academicians, focused on advancing economic research and discussions.
The American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) is a national trade union center, the largest federation of unions in the United States. It works to improve the lives of working people through its advocacy in policy, economy, and human rights.
Autarky refers to the policy of establishing a self-sufficient and independent national economy, aiming to reduce or eliminate dependence on international trade.
A bailout is an effort by the government to provide sufficient financial assistance to prevent the failure of a specific private or quasi-private entity. The program may consist of loans or grants to satisfy outstanding debts or may involve government purchase of an equity position in the firm.
The base rate is the benchmark interest rate set by a nation's central bank, influencing the rates commercial banks charge borrowers and pay to depositors.
Government rules that attempt to promote domestic industry by raising the cost to consumers of purchasing imported goods.
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.
CBI is an organization that lobbies for British business interests, primarily focusing on influencing UK government policies, the European Union, and other international bodies to foster a favorable business environment.
An expert group of economists appointed by the President of the United States to provide counsel on economic policy.
Government economic policies designed to dampen the effects of the business cycle, such as the Federal Reserve Board's action during the early 1980s inflation to raise interest rates and reduce demand.
Demonetization refers to the withdrawal of a specific form of currency from circulation, rendering it no longer recognized as legal tender. This economic policy is often implemented to combat issues like corruption, counterfeit currency, and inflation.
The removal of controls imposed by governments on the operation of markets, aiming to enhance efficiency and competition but potentially contributing to economic instability under certain conditions.
Discretionary Policy refers to government economic policies that are not automatic or built into the system but require active intervention by policymakers to influence economic activities.
Internationally, restrictions upon trade and financial dealings that a country imposes upon another for political reasons, usually as punishment for following policies of which the sanctioning country disapproves.
The Federal Reserve Board, often referred to simply as the Fed, is the governing body of the Federal Reserve System, the central bank of the United States. Its major responsibilities include overseeing monetary policy, regulating banks, maintaining financial stability, and providing financial services.
Forced saving occurs when consumers are restricted from spending all their income on current consumption. This can be self-imposed, contractually obligated, or enforced by government policy.
The G-10, or Group of Ten, is an advisory forum for the International Monetary Fund (IMF), established in 1962. It consists of finance ministers and central bank governors from 11 key economies, including Canada, France, Germany, Belgium, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom, and the United States.
A forum of the heads of state or government of the major industrial democracies meeting annually since 1975 to deal with the major economic and political issues facing their domestic societies and the international community as a whole.
The General Agreement on Tariffs and Trade (GATT) was a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas.
The Group of 20 (G-20) is an international forum for the governments and central bank governors from 19 countries and the European Union to discuss policy issues pertaining to the promotion of international financial stability.
An import quota is an imposed limit on the quantity of a particular good that may be brought into a country or economy over a specified period of time. These quotas may be implemented by governments, foreign governments, or producers themselves.
Income groups are collections of consumers or other entities that are categorized based on their incomes. This classification allows for the analysis of economic behaviors and the targeting of policies or products to specific income segments.
The 2008 Income Tax Rebate Plan was a significant part of the $168 billion economic stimulus bill proposed by President George W. Bush. It provided tax relief to individuals and couples, raised loan limits for housing agencies, and offered incentive deductions for businesses.
The Infant Industry Argument is an economic rationale for implementing trade protection measures to allow emerging domestic industries to establish and grow without the pressures of international competition.
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.
The International Monetary Fund (IMF) is an international organization established in 1944 to promote global monetary cooperation, ensure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
Jawboning is a persuasive technique where high-ranking officials attempt to influence or pressure others to behave in a desired manner by virtue of their position and authority.
Keynesian Economics is a body of economic thought originated by the British economist John Maynard Keynes. Keynes asserted that government should manipulate the level of aggregate demand to address unemployment and inflation.
A managed economy is one in which the government intervenes extensively to direct economic activity. Such intervention is characteristic of socialist and communist economies, in stark contrast to capitalist economies where market forces predominantly guide economic activity.
A managed float, also known as a dirty float, is an exchange rate system where a currency’s value is primarily determined by market forces but is also occasionally adjusted by the central bank to stabilize or reach specific targets.
The mercantile system, also known as Mercantilism, is an economic policy that is designed to maximize the exports and minimize the imports for an economy. It promotes governmental regulation of a nation's economy to augment state power at the expense of rival national powers.
A monetarist is an economist who believes that the money supply is the key to the ups and downs in the economy. Monetarists, such as the late Milton Friedman, think that the money supply has far more impact on the economy's future course than, say, the level of federal spending.
Monetary reserve refers to a government’s stockpile of foreign currencies and precious metals used to support its currency. It is also the Federal Reserve Board's requirement for banks to keep a certain proportion of their deposits in cash or near-cash equivalents.
The National Bureau of Economic Research (NBER) is a Cambridge, Massachusetts–based private, nonprofit organization committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.
The process through which the government takes ownership of a private business or industry.
Negative Income Tax (NIT) is a proposed system of welfare within which low-income earners receive supplemental pay from the government instead of paying taxes. The idea aims to provide a safety net for the least fortunate by ensuring a minimum level of income.
New Economics refers to revisions of Keynesian Economics that emerged in the 1970s, aimed at addressing economic issues inadequately managed by traditional Keynesian approaches.
Normative economics is a branch of economics that discusses what the economic goals and policies of society should be, often reflecting personal values or opinions. It contrasts with positive economics, which aims to understand how the economy operates.
Economic policies championed by President Barack Obama to achieve economic recovery and effect reforms, calling for increased involvement by the government in the private sector in areas such as health care, banking, automobiles, college education finance, consumer protection, and environmental protection.
An overvalued currency is a currency whose value is artificially higher than its market value due to governmental support or intervention. This misalignment can impact a country's trade balance, economic stability, and competitiveness.
In the UK, a statement made by the Chancellor of the Exchequer in October-December that reports on the state of the economy and points forward to the Budget he will unveil in the spring.
A proportional tax, also known as a flat tax, imposes the same percentage rate of taxation on everyone, regardless of income or wealth level.
Proportional taxation is a tax system where the tax rate remains constant regardless of the amount of income earned. It applies a uniform tax rate to all individuals, which means that both the wealthy and poor pay the same percentage of their income in taxes.
Protectionism encompasses economic policies designed to restrict imports of goods that compete with domestic producers. It aims to shield domestic industries from foreign competition, thereby enabling local businesses to thrive.
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.
Reaganomics is a term used to describe the conservative, free-market economic policies endorsed by President Ronald Reagan and his administration during his time in office from 1981 to 1989.
The Tax Reform Act of 1986 (TRA 1986) represents the most comprehensive tax legislation since the onset of World War II. It aimed to ensure that individuals with equal incomes paid equal taxes, minimized the role of tax incentives in addressing social and economic issues, and primarily used taxes to generate revenues.
Trade barriers are governmental or operational activities or restrictions that make the importation of certain goods into a country difficult or impossible. Examples include tariffs, regulations, and inspections.
The Treasury Department is an executive department of the U.S. government responsible for managing national finances, including collecting taxes, paying bills, and managing currency, government accounts, and public debt. It aims to promote economic growth and stability.
In economic terms, to unfreeze means to remove restrictions, often related to price controls or import/export bans, allowing for market adjustments based on supply and demand.
Value-Added Tax (VAT) is a consumption tax imposed at each step of the production process, calculated as the difference between the purchase cost of an asset to the taxpayer and its resale price. It is a key source of tax revenue in many European countries.
Wage control involves measures to regulate the extent to which wages can be increased, typically in percentage terms, and is usually implemented during periods of governmental wage and price restraints to achieve national priorities like controlling inflation.
Wage Stabilization refers to the act of maintaining wages at a certain level, preventing fluctuations, typically implemented as policy measures to curb inflationary pressure. These policies aim to control rapid changes in wage levels to maintain economic stability.
