Archives: Terms

Definition of Individual Retirement Account (IRA) An Individual Retirement Account (IRA) is a tax-advantaged savings account designed to help individuals save for retirement. IRAs are one of the most popular vehicles for retirement savings in the United States, offering various tax benefits that encourage long-term savings. There are several types […]

Definition of Indirect Inference Indirect inference is a statistical method used in economics and other fields to estimate parameters of an economic model that are not directly observable. The essence of this technique lies in matching artificially simulated data generated by a model with observed real-world data. This process helps […]

Definition of Indigo Era The term “Indigo Era” is not a commonly recognized period in economic history but rather refers to the historical significance of indigo dye in trade, colonial economies, and social structures. The indigo plant was source material for a deep blue dye that was highly valued across […]

Definition of Income Distribution Income distribution refers to how a nation’s total GDP is distributed amongst its population. It’s a measurement of the economic equality or inequality present within a society. Typically, income distribution is categorized into quintiles or deciles, breaking down the population into segments based on their income […]

Definition of Incentive An incentive is a factor or a set of factors that motivates or encourages an individual to perform an action or behave in a specific manner. In the context of economics, incentives can be financial, such as monetary rewards, or non-financial, such as recognition or growth opportunities. […]

Definition of Inada Conditions Inada Conditions refer to a set of assumptions about production functions in the context of economic growth models. Named after Japanese economist Ken-Ichi Inada, these conditions ensure the smooth operation of neoclassical growth models, particularly the Solow-Swan model. In essence, the Inada Conditions specify properties that […]

Definition of Imputation Imputation in economics refers to the process of assigning a value to something by inference from the value of the products or processes to which it contributes. This concept is often applied in national accounts and surveys when actual data are incomplete or missing. The goal of […]

Definition of Impossible Trinity The impossible trinity, also known as the trilemma in international economics, is a concept that posits that it is impossible for a country to achieve the following three at the same time: a fixed foreign exchange rate, free capital movement, and an independent monetary policy. Essentially, […]

Definition of Immiserizing Growth Immiserizing growth is an economic concept that refers to a situation in which economic growth could theoretically lead to a country being worse off than before the growth occurred. This paradoxical outcome, primarily attributed to international trade dynamics, is when the negative effects of growth, such […]

Definition of the Icarus Paradox The Icarus Paradox is a concept derived from Greek mythology, specifically the story of Icarus, who was destroyed by his own success when he flew too close to the Sun, causing his wax wings to melt. In the context of business and strategic management, the […]