Archives: Terms

Definition of Rules of the Game The term “rules of the game” in economics refers to the formal and informal regulations, standards, and norms that affect economic behavior and outcomes. These rules shape the incentives and constraints faced by economic agents such as individuals, firms, and governments. They cover a […]

Definition of Rules of Origin Rules of origin are the criteria used to define where a product was made and are critical for implementing trade policies such as tariffs, quotas, and preferential trade agreements. These rules are necessary to determine the country of origin of goods, which then dictates the […]

Definition of RPIX RPIX refers to the Retail Prices Index excluding mortgage interest payments. It is a measure of inflation that excludes the cost of mortgage interest payments from the UK’s broader Retail Prices Index (RPI). The RPIX provides a clearer picture of underlying inflation trends by removing the volatility […]

Definition of Royalties Royalties refer to the payments made by one party (the licensee or user) to another (the licensor or owner) for the right to use a particular asset, often intellectual property. These assets can include copyrighted works, patents, trademarks, or even natural resources. Royalties are typically expressed as […]

Definition of Royal Economic Society The Royal Economic Society (RES) is one of the oldest and most prestigious economic associations globally, committed to promoting the study and understanding of economic science. Founded in 1890, the RES serves as a platform for economists to share research, facilitate dialogue, and advance economic […]

Definition of Rounding Error Rounding error arises from approximating a number to a specific level of precision rather than using its exact value. In both mathematical operations and computer arithmetic, rounding errors can occur when numbers are truncated or rounded to fit a certain format or number of decimal places. […]

Definition of Roll-Over of Loans The roll-over of loans refers to the process by which a borrower renews or extends the term of an existing loan rather than repaying it in full upon maturity. This financial maneuver involves negotiating new terms, whether they include interest rates, payment schedules, or overall […]

Definition of Robustness of Policies Robustness of policies refers to the ability of economic and governmental regulations, frameworks, and interventions to effectively achieve their intended objectives under a wide range of conditions and uncertainties. Robust policies are designed to be resilient and adaptable, coping with various economic shocks, market fluctuations, […]

Definition of Risk-Neutral Valuation Risk-neutral valuation is a method used to value financial derivatives and other contingent claims by assuming that investors are indifferent to risk. This approach simplifies the pricing of complex financial instruments by eliminating the influence of risk preferences and focusing solely on the expected future cash […]

Definition of Risk-Neutral Risk-neutral is a term used in economics and finance to describe an attitude towards risk in which an individual’s decisions are not affected by the uncertainty of outcomes. A risk-neutral person is indifferent between choices with the same expected payoff, regardless of the risk or variability involved […]