Archives: Terms

Definition of Rostow’s Stages of Growth Rostow’s stages of growth is a theory put forth by American economist Walt Whitman Rostow in the 1960s. This theory posits that economic growth occurs in five basic stages, common to all societies. Rostow’s model outlines a linear progression that starts from a traditional […]

Definition of Rostovian Take-Off Model The Rostovian Take-Off Model is a theory of economic growth proposed by economist Walt Rostow. This model outlines five stages of economic development, with the “take-off” stage being crucial for a country to transition from a traditional society to a modern economic one. It emphasizes […]

Definition of Robustness Robustness in economics refers to the strength and resilience of an economic system, strategy, or model to withstand shocks, stress, or changes without suffering degradation or loss of functionality. This concept underscores the capacity of an economic entity—be it a market, a financial system, or an economic […]

Definition of Robinson Crusoe Economy A Robinson Crusoe economy is a simple framework used in economics to study some of the basic principles of trade, production, and resource allocation. It is named after Daniel Defoe’s fictional character, Robinson Crusoe, who was shipwrecked and isolated on an uninhabited island. In such […]

Definition of Robin Hood Effect The Robin Hood effect is an economic concept that refers to the redistribution of income and wealth from the wealthier segments of society to the poorer segments. This effect is named after the legendary figure Robin Hood, who, according to folklore, stole from the rich […]

### Definition of Rivalry Rivalry in economics refers to the situation when the consumption of a good or service by one person diminishes the ability of another person to consume the same good or service. This characteristic is a fundamental aspect of the classification of goods and plays a crucial […]

Definition of Risk-Return Relationship The risk-return relationship is a fundamental concept in economics and finance that describes the principle that potential return on investment is directly correlated with the level of risk taken. In simpler terms, the higher the risk of an investment, the higher the potential reward, and vice […]

Definition of Risk Premium The risk premium is the additional return an investor expects to receive from an investment due to its higher risk compared to a risk-free asset. Essentially, it’s the compensation investors require for bearing the extra volatility and potential for loss that comes with certain investments. This […]

Definition of Risk Aversion Risk aversion is a concept in economics and finance that refers to the preference of individuals to avoid uncertainty or potential losses when making investment decisions. It characterizes an investor’s reluctance to take on a project or investment that has an uncertain payoff, even if the […]

Definition of Ricardian Socialism Ricardian socialism is a branch of economic theory that emerged in the early 19th century, building upon the work of classical economist David Ricardo. This theory critiques the capitalist system, especially focusing on issues of labor and the distribution of income. Unlike Ricardo’s emphasis on the […]