Archives: Terms

Definition of Goodhart’s Law Goodhart’s Law is an adage named after British economist Charles Goodhart, which he originally formulated in the context of economic measures. It states that “When a measure becomes a target, it ceases to be a good measure.” The essence of Goodhart’s Law is that once a […]

Definition of Gold Standard The gold standard is a monetary system where a country’s currency or paper money has a value directly linked to gold. Under this system, governments guarantee the exchange of currency for a specific amount of gold, and the value of that currency is pegged to the […]

Definition of Global Labor Arbitrage Global labor arbitrage refers to the practice by companies of taking advantage of lower labor costs in different countries or regions to maximize efficiency and minimize operational costs. This process involves relocating specific business processes or manufacturing operations to locations where labor is significantly cheaper […]

Definition of Gini Coefficient The Gini coefficient is a measure used to express the level of inequality in income or wealth distribution within a population. It is typically represented as a value between 0 and 1, where 0 signifies perfect equality (everyone has the same income or wealth) and 1 […]

Definition of Gift Economy A gift economy is a mode of exchange where valuables are not traded or sold, but rather given without an explicit agreement for immediate or future rewards. This contrast sharply with market economies, where transactions are typically quid pro quo, or with barter economies, where a […]

Definition of Gibson’s Paradox Gibson’s Paradox is an economic observation that highlights an empirical relationship between the price levels and interest rates in an economy, contrary to conventional expectations. Historically, it denotes the positive correlation found between the prices of goods and services (or the general price level) and the […]

Definition of Gibrat’s Law Gibrat’s Law, also known as the Law of Proportionate Effect, suggests that the size of a firm does not determine its growth rate and that all firms, regardless of their sizes, have an equal chance of experiencing proportional growth. This concept posits that the growth of […]

Definition of the Gibbard–Satterthwaite Theorem The Gibbard–Satterthwaite theorem is a fundamental result in social choice theory, which is a branch of economics and political science. This theorem demonstrates that in a voting system where three or more alternatives are present, if the system is deterministic, non-imposed (meaning all outcomes are […]

Definition of Gerschenkron Effect The Gerschenkron effect is an economic theory proposed by Alexander Gerschenkron that posits latecomer countries can experience more rapid industrial development compared to early developers. This theory suggests that countries that begin to industrialize later have the advantage of adopting the latest technologies already developed by […]

Definition of Georgism Georgism, also known as Geoism and single tax theory, is an economic philosophy and ideology named after the American economist and social reformer Henry George (1839–1897). Georgism advocates for the public collection of rent on land, with the belief that individuals should own the fruits of their […]