- Industry: Economy; Printing & publishing
- Number of terms: 15233
- Number of blossaries: 1
- Company Profile:
An attitude to investment that is often criticized. According to critics, speculation involves buying or selling a financial asset with the aim of making a quick profit. This is contrasted with long-term investment, in which an asset is retained despite short-term fluctuations in its value. Speculators actually play a valuable role in financial markets as their appetite for frequent buying and selling provides liquidity to the markets. This benefits longer-term investors, too, as it enables them to get a good price when they do eventually sell.
Industry:Economy
The price quoted for a transaction that is to be made on the spot, that is, paid for now for delivery now. Contrast spot markets with forward contracts and futures markets, where payment and/or delivery will be made at some future date. Also contrast with long-term contracts, in which a price is agreed for repeated transactions over an extended time period and which may not involve immediate payment in full.
Industry:Economy
The difference between one item and another. A much used term in financial markets. Examples are the differences between:
* the bid (what a dealer will pay) and ask or offer (what a dealer will sell for) price of a share or other security;
* the price an underwriter pays for an issue of bonds from a company and the price the underwriter charges the public;
* the yield on two different bonds.
Industry:Economy
Budgetary rules agreed to by Euro zone countries as a condition of joining the Euro. The pact stipulates that all the countries will run a balanced budget in normal times. A government that runs a fiscal deficit bigger than 3% of GDP must take swift corrective action. And if any country breaches the 3% limit for more than three years in a row, it becomes liable to fines of billions of euros. The pact was supposed to be a powerful political symbol that Euro-using countries would not cheat each other. However, Portugal became the first country to break the deficit limit by notching up 4. 1% in 2001. When, in 2002, France and Germany also exceeded the 3% limit, some EU members were outraged and others lobbied for the pact to be modified or even scrapped.
Industry:Economy
Government policies intended to smooth the economic cycle, expanding demand when unemployment is high and reducing it when inflation threatens to increase. Doing this by fine tuning has mostly proved harder than Keynesian policymakers expected, and it has become unfashionable. However, the use of automatic stabilizers remains widespread. For instance, social handouts from the state usually increase during tough times, and taxes increase (fiscal drag), boosting government revenue, when the economy is growing.
Industry:Economy
Term coined in the 1970s for the twin economic problems of stagnation and rising inflation. Until then, these two economic blights had not appeared simultaneously. Indeed, policymakers believed the message of the Phillips curve: that unemployment and inflation were alternatives.
Industry:Economy
All the parties that have an interest, financial or otherwise, in a company, including shareholders, creditors, bondholders, employees, customers, management, the community and government. How these different interests should be catered for, and what to do when they conflict, is much debated. In particular, there is growing disagreement between those who argue that companies should be run primarily in the interests of their shareholders, in order to maximize shareholder value, and those who argue that the wishes of shareholders should sometimes be traded off against those of other stakeholders.
Industry:Economy
A measure of how far a variable moves over time away from its average (mean) value.
Industry:Economy
