Archives: Terms

Definition of Convexity Convexity in economics and finance is a measure that shows how the duration of a bond or another financial instrument changes with respect to interest rates. In a broader sense, convexity captures the relationship between price and yield of a bond to demonstrate the bond’s price sensitivity […]

Definition of Convergence Convergence in economics refers to the hypothesis or phenomenon where poorer economies’ per capita incomes tend to grow at a faster rate compared to richer economies. This concept suggests that over time, all economies should converge in terms of income per capita, assuming that they have similar […]

Definition of Contract Theory Contract theory explores how economic actors construct contractual arrangements, primarily in the presence of asymmetric information. It delves into understanding the diverse contractual devices that are employed to tackle issues such as moral hazard and adverse selection. This field of economics investigates the form and structure […]

Definition of Contract Curve The contract curve is a central concept in economics, particularly within the theory of Edgeworth Box diagrams, representing the set of optimal allocations of resources between two parties in an exchange economy. This curve illustrates the combination of distributions between consumers or producers where no further […]

Definition of Consumer Price Index (CPI) The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. CPI is widely used as an economic indicator to gauge inflation, as well as to adjust salaries, […]

Definition of Consumer Confidence Consumer confidence refers to the degree of optimism or pessimism that consumers feel about their financial situation and the general state of the economy. It encompasses the confidence consumers have in their ability to find and retain good jobs, their perception of their financial situation and […]

Definition of Consumer Choice Consumer choice refers to the decisions made by individuals or households regarding the purchase of goods and services. It is based on the preferences, incomes, and the prices of goods and services available in the market. The theory of consumer choice is a fundamental component of […]

Given the extensive information provided in your requests, a comprehensive glossary about these economic concepts is below, incorporating HTML formatting for clarity and structure. — ` Economic Glossary: Key Concepts Explored ` — ` 1. Deadweight Loss ` ` Definition: Deadweight loss refers to the inefficiency created in the market […]

Definition of Conspicuous Compassion Conspicuous compassion is a term used to describe the public demonstration of empathy, sorrow, or concern for the misfortunes of others, primarily as a means of expressing one’s social status rather than genuine empathy. This phenomenon is often observed in the context of charitable giving, volunteering, […]

Definition of Conspicuous Consumption Conspicuous consumption refers to the practice of purchasing goods or services for the sole purpose of displaying wealth or social status rather than to meet basic needs. This term was first coined by economist and sociologist Thorstein Veblen in his 1899 book, “The Theory of the […]