Archives: Terms

Definition of Strategic Complements Strategic complements occur in a game-theoretic context where the best action of one player increases the incentives for other players to take similar actions. It refers to a situation in which the payoff to choosing a particular strategy increases as more players choose that same strategy. […]

The provided examples focus on the economic concepts of deadweight loss, inferior goods, human capital, and hint towards the discussion of the St. Petersburg paradox. Due to the nature of these topics, a comprehensive glossary on economic terms related to these areas offers valuable insights into understanding fundamental economic principles […]

Definition of Store of Value A store of value is an asset that maintains its value over time without depreciating. In economics, a store of value is one of the three main functions of money, alongside being a medium of exchange and a unit of account. Assets considered strong stores […]

Definition of Stolper-Samuelson Theorem The Stolper-Samuelson theorem is an economic theory that addresses the relationship between the returns to factors of production and trade in an international context. Derived from the Heckscher-Ohlin model, it posits that an increase in the price of a good will lead to an increase in […]

Definition of the Stockholm School The Stockholm School refers to a group of economists based in Sweden, primarily active during the 1930s, who contributed to the development of macroeconomic theory and pioneered ideas that would later be integral to Keynesian economics. Notably, the Stockholm School advocated for the use of […]

Definition of Stock-Flow Consistent Model A stock-flow consistent (SFC) model is an analytical framework used in macroeconomic analysis that ensures a comprehensive accounting of all the stocks and flows in an economy. This model integrates various economic sectors, such as households, businesses, governments, and the foreign sector, and tracks how […]

Definition of Stochastic Frontier Analysis Stochastic Frontier Analysis (SFA) is an econometric approach used to measure the efficiency and productivity of firms, industries, or countries. Developed in the late 1970s, SFA separates inefficiency effects from random errors in the production function, allowing for the estimation of the ‘frontier’ — the […]

Definition of Steady-State Economy A Steady-State Economy is an economic system structured to balance growth with environmental sustainability, effectively maintaining a stable or mildly fluctuating size of the economy without the negative environmental impacts typically associated with economic growth. It prioritizes ecological stability, resource preservation, and equitable distribution of wealth […]

Definition of Standard of Deferred Payment A standard of deferred payment is an accepted way to settle a debt – a unit in which debts are denominated, and the value of the unit is preserved over time. In simpler terms, it refers to an agreement on the value that will […]

Definition of Stabilization Policy Stabilization policy refers to government strategies and actions aimed at maintaining economic stability by minimizing fluctuations in inflation, output, and unemployment. These policies involve the use of monetary and fiscal tools to control the pace of economic growth and ensure a stable economic environment. Ultimately, the […]