Glossary of Economic Terms: Autarchy, Balance of Payments, and More

Glossary of Economic Terms

A

Autarchy

A system of a state that intends to be economically self-sufficient and could be met from its own resources, eliminating imports.

B

Balance of Payments

An account that records transactions and international economic transactions made by a country for a year.

C

Constitution

The fundamental law of a state's organization. The first written constitution was in the U.S. and is still in force. In Spain, the first Constitutional text was drafted by the Cortes of Cadiz in 1812.

Corporatism

Political and economic doctrines advocating the integration of workers and employers in the same occupation into a single organization.

D

Deficit

A situation that occurs in an account, budget, etc., when costs outweigh gains.

Deflation

When an oversupply may lead to lower prices or an economic recession.

Demand

The amount of a good or service that consumers demand and are willing to pay for.

External Debt

A state's obligations to foreign creditors through loans, which it agrees to repay.

Devaluation

Reducing the value of a currency against other countries' currencies. It is performed to improve the trade balance, make imports more expensive, and attract foreign capital.

E

Economic Nationalism

An economic system characterized by the defense of a country's trade, industry, and agriculture against foreign countries through exchange controls on currency and tariffs. This is the opposite of the free trade system, also known as Protectionism.

I

Inflation

The process of persistent rising prices initiated by an imbalance between the production of goods and services and increasing demand. There are three types: demand inflation, which posits that excess supply causes price increases and gives rise to a demand for more goods; cost-push inflation, which attributes inflation to rising production factors such as wages; and structural inflation, which suggests that structural weaknesses and inequalities in the distribution of property are the causes.

S

Speculation

An activity involving buying a type of asset whose price is estimated to increase.

Stock

All company products stored pending their use or sale or to meet future demands.