| Wage | The payment for the service of a unit of labor, per unit time. In trade theory, it is the only payment to labor, usually unskilled labor. In empirical work, wage data may exclude other compensation, which must be added to get the total cost of employment. |
| Wage insurance | A program to pay displaced workers, when they become re-employed and for a limited period of time, a specified fraction of the difference between their old wage and their lower new wage. As of 2002, the US provides wage insurance to a limited number of workers as part of Alternative Trade Adjustment Assistance. |
| Wage-rental ratio | The ratio of the wage of labor to the rental price of either capital or land, whichever is the other factor in a two-factor Heckscher-Ohlin model. The ratio plays a critical role in this model since it determines the ratios of factors employed in both industries. |
| Waiver | An authorized deviation from the terms of a previously negotiated and legally binding agreement. Many countries have sought and obtained waivers from particular obligations of the GATT and WTO. |
| Walras' Law | The property of a general equilibrium that if all but one of the markets are in equilibrium, then the remaining market is also in equilibrium, automatically. This follows from the budget constraints of the market participants, and it implies that any one market-clearing condition is redundant and can be ignored. |
| Walrasian adjustment | A market adjustment mechanism in which price rises when there is excess demand and falls when there is excess supply. Strictly speaking, these excess supplies and demands are those that would obtain without any history of disequilibrium, as with a Walrasian auctioneer. |
| Walrasian auctioneer | A hypothetical entity that facilitates market adjustment in disequilibrium by announcing prices and collecting information about supply and demand at those prices without any disequilibrium transactions actually taking place. |
| WARP | Weak axiom of revealed preference. |
| Warsaw Pact | A "treaty of friendship, co-operation, and mutual assistance" including the Soviet Union and its satellite states in Central Europe. Signed in 1955, it included eight countries. |
| Washington Consensus | A set of economic practices and reforms deemed by international financial institutions (located in Washington, D.C.) to be helpful for financial stability and economic development; often imposed as conditions for economic assistance by these institutions. Phrase coined by John Williamson (1990). |
| Water in the tariff | The extent to which a tariff is higher than necessary to be prohibitive. |
| Weak axiom of revealed preference | The assumption that a consumer who reveals strict preference for one bundle of goods over another will not, in other circumstances, reveal their preference for the second over the first. That is, if qi, qj are the vectors of goods purchased at prices pi, pj respectively, then piqi>piqj Þ pjqi>pjqj. Used in proving correlation results. |
| Wealth | The total value of the accumulated assets owned by an individual, household, community, or country. |
| Welfare | Refers to the economic well being of an individual, group, or economy. For individuals, it is conceptualized by a utility function. For groups, including countries and the world, it is a tricky philosophical concept, since individuals fare differently. In trade theory, an improvement in welfare is often inferred from an increase in real national income. |
| Welfare criterion | A basis, usually quantitative, for judging whether one state of the world or of an economy is better than another, for use in welfare economics and in evaluation of policies. |
| Welfare economics | The branch of economic thought that deals with economic welfare, including especially various propositions relating competitive general equilibrium to the efficiency and desirability of an allocation. See the first and second theorems of welfare economics. |
| Welfare proposition | In trade theory, this usually refers to any of several gains from trade theorems. |
| Welfare state | A set of government programs that attempt to provide economic security for the population by providing for people when they are unemployed, ill, or elderly. |
| Welfare triangle | In a partial equilibrium market diagram, a triangle representing the net welfare benefit or loss from a policy or other change. In trade theory it often means the triangle or triangles representing the deadweight loss due to a tariff. |
| Western Hemisphere Free Trade Area | Name sometimes proposed for a preferential trading arrangement including most or all of the countries of the western hemisphere. Now called FTAA. |
| WHFTA | Western Hemisphere Free Trade Area |
| Willingness to pay | The largest amount of money that an individual or group could pay, along with a change in policy, without being made worse off. It is therefore a monetary measure of the benefit to them of the policy change. If negative, it measures its cost. |
| WIPO | World Intellectual Property Organization |
| Withholding tax | A tax on income that is levied at the source, thus diverted to the government before the recipient of the income ever sees it. Used in international tax treaties to assist tax collection. |
| Working party | A group that is delegated to study an issue. Used by the WTO as a first step in considering a new issue that may later become the subject of negotiations. |
| World Bank | A group of five closely associated international institutions providing loans and other development assistance to developing countries. The five institutions are IBRD, IDA, IFC, MIGA, and ICSID. As of June 2007, the largest of these, IBRD, had 185 member countries. |
| World Fact Book | An excellent source of information about the countries of the world, including basic economic data. |
| World Intellectual Property Organization | The United Nations organization that establishes and coordinates standards for intellectual property protection. |
| World price | The price of a good on the "world market," meaning the price outside of any country's borders and therefore exclusive of any trade taxes or subsidies that might apply crossing a border into a country but inclusive of any that might apply crossing out of a country. |
| World production possibility frontier | The aggregate production possibility frontier for all of the countries of the world. Usually depicted for a two-good, two-country model. |
| World Trade Organization | A global international organization that specifies and enforces rules for the conduct of international trade policies and serves as a forum for negotiations to reduce barriers to trade. Formed in 1995 as the successor to the GATT, it had 152 member countries as of June 2008. |
| World transformation curve | The world production possibility frontier. |
| WTO | World Trade Organization |