by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Balassa-Samuelson Effect?The Balassa-Samuelson Effect is an effect that describes the relationship between an increase in productivity, higher exchange rates and an increase in wage growth. This effect shows that when there is an increased level of...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Feedback-Rule Policy?A Feedback-Rule Policy is a response of a government to prevailing economic situations. When a government is prompted to take certain actions due to the prevailing economic circumstances such as economic instability, it can be...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Indifference Curve?In economics, an indifference curve is a curve that shows the combination of two goods that give a consumer equivalent satisfaction and utility. This curve indicates that a consumer is indifferent about the two products since he derives...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Pigou Effect?Pigou effect is an economic term referring to the relationship between employment, wealth, consumption, and output during the deflation period. According to the Pigou effect, when there is price deflation, the output (employment) increases due...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Paradox of Rationality?The paradox of rationality refers to a game theory’s empirical observation where players who make naive or irrational choices always tend to receive better payoffs compared to those that make rational choices through backward...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Heckscher-Ohlin Model?The Heckscher-Ohlin model, otherwise known as the H-O model or 2x2x2 model, is a mathematical theory used in international trade to evaluate the export pattern of a country relative to the natural resources at their disposal. The...
