Archives: Terms

Definition of Two-Stage Least Squares (2SLS) Two-Stage Least Squares (2SLS) is an extension of the ordinary least squares (OLS) regression technique. Primarily used in econometrics, 2SLS addresses scenarios where the independent variables are correlated with the error terms, which can lead to biased and inconsistent estimates. The technique is particularly […]

Definition of Two-Sector Endogenous Growth Model The two-sector endogenous growth model is a framework within economic theory that explains long-term economic growth as driven by internal factors rather than external influences. This model divides the economy into two distinct sectors: The production sector, which generates final goods and services The […]

Definition of Two-Part Tariff A two-part tariff is a pricing strategy that involves two separate charges to consumers: a fixed fee and a variable usage fee. The fixed fee is usually a lump-sum payment that grants the consumer the right to purchase the product or service, while the variable usage […]

Definition of Two-Gap Model The Two-Gap Model is a theory in development economics that identifies two major gaps or constraints—savings and foreign exchange—that impede economic development in developing countries. The premise of the model is that these countries face a dichotomy where domestic savings are insufficient to fund the necessary […]

Definition of Turnpike Theorem The Turnpike Theorem is a concept in economics and optimal control theory suggesting that, under certain conditions, the optimal path of economic investment and growth will closely follow a stable, balanced growth path, or “turnpike,” for the majority of the planning period. Even if initial and […]

Definition of Turnover Tax Turnover tax is a tax levied on a company’s gross revenues from sales, rather than on its profits. This type of tax is typically applied to all sales transactions, regardless of whether the business is making a profit or not. It’s often similar in function to […]

Definition of Turnover Turnover, in the context of human resources and economics, refers to the rate at which employees leave a workforce and are replaced within a given period. It is often expressed as a percentage and can be analyzed both within specific departments and across the entire organization. High […]

Definition of Turnkey Project A turnkey project is a type of project that is constructed so that it can be sold to any buyer as a completed product. This term comes from the idea that the buyer only needs to “turn the key” to start operating the project or business. […]

Definition of Trustee A trustee is an individual or organization that holds or manages and administers property or assets for the benefit of a third party. Trustees are fiduciaries, meaning they have a legal and ethical obligation to act in the best interests of the beneficiaries. Trustees can be appointed […]

Definition of Trust in Economics Trust, in the context of economics, refers to the confidence or belief that one party has in the reliability, integrity, and fairness of another party. This belief can pertain to individuals, organizations, or even socio-economic systems. Trust plays a crucial role in enabling transactions, fostering […]