DWL
Business & Finance abbreviation · Economics
| Stands for | Deadweight loss |
|---|---|
| Categories | Business & Finance |
DWL stands for Deadweight loss, an economics abbreviation.
Loss of total economic welfare that occurs when a market produces more or less than the efficient quantity, for example because of taxes, price controls, monopoly pricing or subsidies. It represents trades that would have benefited both buyers and sellers but do not happen.
Example: The tariff creates a DWL because some buyers who valued imports above their cost no longer purchase them.
Usage notes
On a supply-and-demand diagram, deadweight loss appears as a triangle, often called the Harberger triangle after economist Arnold Harberger. It rises roughly with the square of a tax rate, which is why economists favor broad tax bases with low rates.
Related abbreviations
More economics abbreviations
- CAD – Current account deficit
- CBA – Cost-benefit analysis
- CCI – Consumer Confidence Index
- COLA – Cost-of-living adjustment
- CPI – Consumer price index
- DSGE – Dynamic stochastic general equilibrium
- ECB – European Central Bank
- EMU – Economic and Monetary Union
- ERM – Exchange Rate Mechanism
- FDI – Foreign direct investment
- FFR – Federal funds rate
- FOMC – Federal Open Market Committee