Archives: Terms

Definition of the Parable of the Broken Window The Parable of the Broken Window, introduced by French economist Frédéric Bastiat in his 1850 essay “Ce qu’on voit et ce qu’on ne voit pas” (“That Which We See and That Which We Do Not See”), illustrates a common misunderstanding in the […]

### Title: Pacman Conjecture Definition of the Pacman Conjecture The Pacman Conjecture is a theoretical concept in the field of corporate finance and governance. It refers to a defensive strategy used by a company that is the target of a hostile takeover. In this scenario, the target company retaliates by […]

Definition of the Overshooting Model The Overshooting Model is a concept in international economics that explains how exchange rates initially react to changes in monetary policy more than is necessary, before eventually settling to a new equilibrium. This model was developed by economist Rudi Dornbusch in 1976 to describe the […]

Definition of Overlapping Generations Model The overlapping generations model (OLG model) is a theoretical framework used in economics to analyze the behavior of individuals at different stages of their life and how it affects the economy over time. Unlike models that assume a representative individual with an infinite lifespan, the […]

Definition of Ostrom’s Law Ostrom’s Law is a principle named after the American political economist, Elinor Ostrom, who was awarded the Nobel Prize in Economic Sciences in 2009. The law states that “A resource arrangement that works in practice can work in theory.” This law challenges the conventional wisdom that […]

Definition of the Open Music Model The Open Music Model is a theoretical framework for the distribution of digital music and other forms of digital media. It posits a system that maximizes the benefits of digital distribution while addressing the concerns of copyright holders, artists, and consumers. Essentially, it suggests […]

Definition of Open Energy System Models Open energy system models are computational tools used for researching and designing energy systems. These models are “open” in the sense that their source code, data, and methodologies are freely available to the public. This openness fosters transparency, reproducibility, and collaborative improvement. These models […]

Definition of Open Energy Modelling Initiative The Open Energy Modelling Initiative is a collaborative effort aimed at improving, sharing, and promoting open-source energy modeling tools and practices. It seeks to foster a transparent, inclusive, and accessible approach to energy system analysis and policy advice. This initiative emphasizes the importance of […]

Definition of Okishio’s Theorem Okishio’s theorem, formulated by Japanese economist Nobuo Okishio, is a concept in Marxist economics that challenges the traditional interpretation of Karl Marx’s theory of the falling rate of profit. According to Okishio’s theorem, if a capitalist aims to maximize profit rates, any technological advancement or increase […]

Definition of Occupational Licensing Occupational licensing refers to the requirement that individuals must obtain permission from government entities to practice a certain profession. This licensing system is intended to ensure that professionals meet minimum standards of competency and practice ethically to protect public health and safety. Licenses are commonly required […]