- Industry: Economy; Printing & publishing
- Number of terms: 15233
- Number of blossaries: 1
- Company Profile:
The stuff that enables people to earn a living. Human capital can be increased by investing in education, training and health care. Economists increasingly argue that the accumulation of human as well as physical capital (plant and machinery) is a crucial ingredient of economic growth, par¬ticularly in the new economy. Even so, this conclusion is largely a matter of theory and faith, rather than the result of detailed empirical analysis. Economists have made little progress in solving the tricky problem of how to measure human capital, even within the same country over time, let alone for comparisons between countries. Levels of spending on, say, education are not necessarily a good indicator of how much human capital an education system is creating; indeed, some economists argue that higher education spending may be a consequence of a country becoming wealthy rather than a cause. Never the less, even modest estimates of the stock of human capital in most countries suggests that it would pay to greatly increase investment in medical technologies that would extend the working lives of most people. The non-economic benefits would be worth having, too.
Industry:Economy
Production costs that do not change when the quantity of output produced changes, for instance, the cost of renting an office or factory space. Contrast with variable costs.
Industry:Economy
A middleman. An individual or institution that brings together investors (the source of funds) and users of funds (such as borrowers). May be increasingly at risk of disintermediation.
Industry:Economy
Sales abroad. Exports grew steadily as a share of world output during the second half of the 20th century. Yet by some measures this share was no higher than at the end of the 19th century, before free trade fell victim to a political backlash.
Industry:Economy
The capital gain plus income that investors think they will earn by making an investment, at the time they invest.
Industry:Economy
What people assume about the future, especially when they make decisions. Economists debate whether people have irrational or rational expectations, or adaptive expectations that change to reflect learning from past mistakes.
Industry:Economy
Loans to boost exports. In many countries these are subsidized by a government keen to encourage exports. Typically, the credit comes in two forms: loans to foreign buyers of domestic produce; and guarantees on loans made by banks to domestic companies so they can produce the exports that should pay off the loan. This effectively insures producers against non-payment. When governments compete aggressively with export credits to win business for domestic firms the sums involved can become large. The economic benefit of export credits is unclear at the best of times. This may be because they are largely motivated by political goals.
Industry:Economy
Limits on the amount of foreign currency that can be taken into a country, or of domestic currency that can be taken abroad.
Industry:Economy
A Darwinian approach to economics, sometimes called institutional economics. Following the tradition of Schumpeter, it views the economy as an evolving system and places a strong emphasis on dynamics, changing structures (including technologies, institutions, beliefs and behavior) and disequilibrium processes (such as innovation, selection and imitation).
Industry:Economy
A risk faced by private-sector firms that regulatory changes will hurt their business. In competitive markets, regulatory risk is usually small. But in natural monopoly industries, such as electricity distribution, it may be huge. To ensure that regulatory risk does not deter private firms from offering their services, a government wishing to change its regulations may have good reason to compensate private firms that suffer losses as a result of the change.
Industry:Economy
