Wealth Effect
The wealth effect describes how changes in asset values (stocks, real estate) influence consumer spending behavior.
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The wealth effect describes how changes in asset values (stocks, real estate) influence consumer spending behavior.
The zero lower bound is when interest rates reach near zero and conventional monetary policy tools become ineffective.
Currency convertibility measures how freely a country's currency can be exchanged for foreign currencies.
Venture debt is loan financing for startups that allows them to raise capital without giving up additional equity.
Twin deficits occur when a country simultaneously faces both a budget deficit and a current account deficit.
Seigniorage is the profit a government earns from the difference between the cost of producing money and its face value.
Devaluation deliberately lowers a currency's value while revaluation raises it, both affecting trade competitiveness.
Currency manipulation is when a government or central bank deliberately devalues its currency to gain trade advantages.
Yield curve control is a central bank policy that targets specific long-term interest rates on government bonds.
Helicopter money is an unconventional policy where the central bank distributes newly created money directly to the public.
Monetary dominance means the central bank sets policy independently; fiscal dominance means government spending dictates monetary policy.
The 2008 Global Financial Crisis was the worst financial disaster since World War II, originating in the US and spreading worldwide.
Financialization refers to the growing size, influence, and dominance of financial markets and institutions in the economy.
EBITDA measures a company's core business performance by showing earnings before interest, taxes, depreciation, and amortization.
Venture capital invests in early-stage startups, while private equity targets mature, established companies.
Capital structure theory analyzes how companies determine the optimal mix of debt and equity to fund operations.
A leveraged buyout is an acquisition of a company using primarily borrowed funds, typically 70-90% debt.
Say's Law states that 'supply creates its own demand' — production generates income that flows back as spending.
The Laffer Curve illustrates that there's an optimal tax rate that maximizes government revenue.
Irving Fisher's debt deflation theory explains how excessive debt combined with falling prices creates a destructive economic spiral.
Minsky's hypothesis argues that prolonged stability encourages excessive risk-taking, eventually leading to financial crises.
Real business cycle theory argues that economic fluctuations are primarily caused by real changes in productivity, not monetary factors.
Rational expectations theory argues that economic agents use all available information to make optimal predictions about the future.
The IS-LM model is a macroeconomic framework that shows how the goods market and money market reach equilibrium together.