Economics Abbreviations
81 abbreviations · part of Business & Finance Abbreviations
Abbreviations from macroeconomics, microeconomics, economic statistics, monetary policy, international trade and development economics, such as GDP, CPI, PPP, QE and FOMC. They fill central bank statements, government data releases, economics textbooks and financial news. Entries explain what each indicator measures, who publishes it and how often, and how related measures (CPI and PCE, GDP and GNP, U-3 and U-6) differ.
| Abbreviation | Stands for | Description |
|---|---|---|
| AD | Aggregate demand | Total demand for goods and services in an economy at a given overall price level, made up of household consumption, business investment, government spending and net… |
| AS | Aggregate supply | Total output of goods and services that firms in an economy are willing and able to produce at a given overall price level. |
| ATC | Average total cost | Total production cost divided by the number of units produced, combining average fixed and average variable costs. |
| AVC | Average variable cost | Variable costs, such as materials and hourly labor, divided by the number of units produced. |
| BoC | Bank of Canada | Canada's central bank, founded in 1934 and based in Ottawa, which sets the policy interest rate, issues banknotes and targets 2 percent inflation within a 1 to 3… |
| BoE | Bank of England | Central bank of the United Kingdom, which sets interest rates to meet the government's 2 percent inflation target, issues banknotes in England and Wales and supervises… |
| BoJ | Bank of Japan | Central bank of Japan, founded in 1882 and based in Tokyo, which sets monetary policy, issues yen banknotes and acts as banker to the government. |
| BoP | Balance of payments | Record of all economic transactions between a country's residents and the rest of the world over a period, made up of the current account (trade, income and transfers)… |
| BOT | Balance of trade | Difference between the value of a country's exports and imports of goods, and sometimes services, over a period. |
| BRICS | Brazil, Russia, India, China and South Africa | Group of major emerging economies, originally Brazil, Russia, India and China, that hold annual summits and cooperate on trade, finance and development. |
| CAD | Current account deficit | Shortfall that occurs when a country's spending on imports of goods and services, income payments abroad and transfers exceeds its earnings from exports and foreign… |
| CBA | Cost-benefit analysis | Systematic method for comparing the total expected costs of a project or policy with its total expected benefits, expressed in money terms and discounted to present… |
| CCI | Consumer Confidence Index | Monthly survey-based measure of US consumers' views on current business and labor-market conditions and their expectations for the next six months, published by The… |
| COLA | Cost-of-living adjustment | Annual increase in Social Security and SSI benefits, as well as federal pensions, to offset inflation. |
| CPI | Consumer price index | Measure of the average change over time in the prices consumers pay for a basket of goods and services, such as food, housing, transportation, clothing and medical care. |
| DSGE | Dynamic stochastic general equilibrium | Class of macroeconomic models built from the optimizing behavior of households and firms and hit by random shocks, used by central banks and researchers to forecast and… |
| DWL | Deadweight loss | 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… |
| ECB | European Central Bank | Central bank for the euro area, based in Frankfurt, which sets monetary policy for the countries that use the euro, aiming for 2 percent inflation over the medium term. |
| EMU | Economic and Monetary Union | Framework of the European Union that coordinates economic and fiscal policy and, for the 21 countries that have adopted the euro, provides a single currency and a… |
| ERM | Exchange Rate Mechanism | European system for limiting fluctuations between member currencies, introduced in 1979 as part of the European Monetary System and replaced by ERM II in 1999. |
| FDI | Foreign direct investment | Investment by a company or individual in one country to acquire a lasting interest and significant control in a business in another country, conventionally at least 10… |
| FFR | Federal funds rate | Interest rate at which US banks lend reserve balances to one another overnight, the main policy rate set by the Federal Reserve as a target range. |
| FOMC | Federal Open Market Committee | Policymaking body of the US Federal Reserve that sets the target range for the federal funds rate and directs open market operations, including bond purchases and… |
| FPI | Foreign portfolio investment | Purchases of stocks, bonds and other financial assets in a foreign country without seeking control of the companies, typically below the 10 percent ownership threshold… |
| FTA | Free trade agreement | Treaty between two or more countries that removes or reduces tariffs, quotas and other barriers on most trade in goods and often services and investment, while each… |
| FX | Foreign exchange | Market for trading currencies, in which one currency is exchanged for another, and by extension the exchange rates themselves. |
| GDI | Gross domestic income | Total income generated by domestic production, including wages, profits, rents and taxes on production, measured from the income side rather than the spending side. |
| GDP | Gross domestic product | Total market value of all final goods and services produced within a country's borders in a given period, usually a quarter or a year. |
| GFC | Global financial crisis | Severe worldwide financial crisis of 2007 to 2009, triggered by losses on US subprime mortgages and culminating in the collapse of Lehman Brothers in September 2008… |
| GNH | Gross national happiness | Development philosophy and index used by Bhutan that measures national progress by well-being across areas such as psychological health, education, culture, good… |
| GNI | Gross national income | Total income earned by a country's residents and businesses, including wages, profits and investment returns from abroad, minus similar payments to non-residents. |
| GNP | Gross national product | Total value of final goods and services produced by a country's residents and businesses, wherever in the world they operate, in a given period. |
| GVA | Gross value added | Value of output minus the value of intermediate inputs used to produce it, measuring the contribution of a sector, region or company to the economy. |
| HDI | Human Development Index | Composite index published by the United Nations Development Programme that ranks countries by life expectancy, education and gross national income per capita on a scale… |
| HHI | Herfindahl-Hirschman Index | Measure of market concentration calculated by squaring each firm's market share (in percent) and adding the results, giving a value from near 0 for a fragmented market… |
| HICP | Harmonised Index of Consumer Prices | Consumer price index compiled by every EU country on a common methodology, coordinated by Eurostat, so that inflation can be compared across member states. |
| IS-LM | Investment-saving / liquidity preference-money supply model | Macroeconomic model showing the combinations of interest rates and output at which the goods market (the IS curve) and the money market (the LM curve) are both in… |
| JOLTS | Job Openings and Labor Turnover Survey | Monthly US Bureau of Labor Statistics survey measuring job openings, hires, quits and layoffs, giving a picture of labor demand and worker mobility beyond the headline… |
| LDC | Least developed country | United Nations category for low-income countries facing severe structural barriers to development, based on income per capita, human assets and economic vulnerability. |
| LFPR | Labor force participation rate | Share of the working-age population, in the US the civilian non-institutional population aged 16 and over, that is either employed or actively looking for work. |
| LMIC | Low- and middle-income countries | Grouping of countries classified by the World Bank as low-income, lower-middle-income or upper-middle-income based on gross national income per capita, used widely in… |
| MC | Marginal cost | Additional cost of producing one more unit of a good or service. |
| MFN | Most favored nation | Principle of the World Trade Organization under which a country must extend to all WTO members any trade advantage, such as a lower tariff, that it grants to any one… |
| MMT | Modern monetary theory | Heterodox macroeconomic school arguing that a government issuing its own currency cannot run out of money in that currency, so its spending is limited mainly by… |
| MPC | Monetary Policy Committee | Nine-member committee of the Bank of England that sets Bank Rate, the UK's main interest rate, and decides on bond purchases or sales. |
| MPS | Marginal propensity to save | Share of an additional unit of income that a household saves rather than spends. |
| MR | Marginal revenue | Additional revenue a firm earns from selling one more unit. |
| NAIRU | Non-accelerating inflation rate of unemployment | Lowest unemployment rate an economy can sustain without causing inflation to rise, according to economic theory. |
| NBER | National Bureau of Economic Research | Private, nonprofit US research organization, founded in 1920, whose Business Cycle Dating Committee is the recognized authority on when US recessions begin and end. |
| NFP | Nonfarm payrolls | Monthly estimate of the change in the number of paid US jobs, excluding farm workers, private household employees and the self-employed, published by the Bureau of… |
| NGDP | Nominal gross domestic product | GDP measured at current prices, without adjusting for inflation, so it reflects both real output and price changes. |
| NIRP | Negative interest-rate policy | Monetary policy in which a central bank sets its policy rate below zero, effectively charging banks for holding excess reserves, to encourage lending and weaken the… |
| NTB | Non-tariff barrier | Restriction on imports or exports other than a tariff, such as quotas, licensing requirements, product standards, sanitary rules, local-content requirements or… |
| ODA | Official development assistance | Government aid designed to promote the economic development and welfare of developing countries, as defined by the OECD's Development Assistance Committee (DAC)… |
| PBoC | People's Bank of China | Central bank of China, based in Beijing, which sets monetary policy, manages the renminbi exchange rate and regulates parts of the financial system, operating under the… |
| PCE | Personal consumption expenditures | Measure of spending by US households and nonprofits on goods and services, published monthly by the Bureau of Economic Analysis. |
| PED | Price elasticity of demand | Measure of how responsive the quantity demanded of a good is to a change in its price, calculated as the percentage change in quantity divided by the percentage change… |
| PIIGS | Portugal, Ireland, Italy, Greece and Spain | Acronym used mainly during the 2010 to 2012 eurozone debt crisis for five economies with high public debt or deficits, banking problems or weak competitiveness. |
| PMI | Purchasing Managers' Index | Monthly economic indicator based on surveys of purchasing managers about new orders, output, employment, supplier deliveries and inventories. |
| PPF | Production possibilities frontier | Curve showing the maximum combinations of two goods an economy can produce with its available resources and technology. |
| PPI | Producer price index | Measure of the average change in prices that domestic producers receive for their output, covering goods, services and construction at various stages of production. |
| PPP | Public-private partnership | Long-term contract between a government and a private company to finance, build and often operate public infrastructure or services, such as toll roads, hospitals… |
| PSU | Public sector undertaking | Indian term for a company in which the central or a state government holds a majority stake, such as State Bank of India, Coal India or ONGC. |
| QE | Quantitative easing | Monetary policy in which a central bank creates money to buy large amounts of government bonds or other financial assets, lowering long-term interest rates and… |
| QT | Quantitative tightening | Process by which a central bank shrinks its balance sheet after quantitative easing, either by letting bonds mature without reinvesting the proceeds or by actively… |
| RBA | Reserve Bank of Australia | Australia's central bank, which sets the cash rate target to keep inflation between 2 and 3 percent, issues banknotes and oversees the payments system. |
| RBI | Reserve Bank of India | India's central bank, established in 1935 and nationalized in 1949, which sets monetary policy through its Monetary Policy Committee, regulates banks, manages the rupee… |
| REER | Real effective exchange rate | Trade-weighted average of a currency's exchange rates against its trading partners, adjusted for differences in inflation. |
| RPI | Retail Prices Index | Older UK inflation measure, first published in 1947, that includes housing costs such as mortgage interest and uses a formula that tends to show higher inflation than… |
| SDR | Special drawing rights | International reserve asset created by the International Monetary Fund in 1969 to supplement member countries' official reserves, valued against a basket of five… |
| SEZ | Special economic zone | Designated area within a country where business and trade rules differ from the rest of the country, typically offering tax breaks, simplified customs, relaxed… |
| SNB | Swiss National Bank | Central bank of Switzerland, with offices in Bern and Zurich, which sets monetary policy to keep inflation between 0 and 2 percent and often intervenes in currency… |
| SOE | State-owned enterprise | Company in which the government holds full or majority ownership or effective control, often operating in strategic sectors such as energy, utilities, banking… |
| TFP | Total factor productivity | Portion of output growth not explained by increases in measured inputs such as labor and capital, attributed to technology, efficiency and innovation. |
| ToT | Terms of trade | Ratio of a country's export prices to its import prices, usually expressed as an index. |
| U-3 | Official unemployment rate (U-3) | Headline US unemployment rate: the share of the labor force that is jobless, available for work and has looked for a job in the past four weeks. |
| U-6 | Broadest unemployment rate (U-6) | Most comprehensive US measure of labor underutilization, adding to the officially unemployed the marginally attached workers, including discouraged workers who have… |
| UBI | Universal basic income | Policy proposal under which every adult, or every citizen, receives a regular, unconditional cash payment from the government regardless of income or employment. |
| WPI | Wholesale price index | Index tracking changes in the prices of goods traded in bulk between businesses, such as raw materials, fuel and manufactured products, before they reach retail. |
| YCC | Yield curve control | Monetary policy in which a central bank targets a specific yield on government bonds of a particular maturity, buying or selling as many bonds as needed to hold the… |
| ZIRP | Zero interest-rate policy | Monetary policy of holding the central bank's short-term policy rate at or near zero to stimulate borrowing, spending and investment, typically during a severe downturn. |
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