|IADB||Inter-American Development Bank|
|IASB||International Accounting Standards Board|
|IBRD||International Bank for Reconstruction & Development|
|ICA||International commodity agreement|
|ICC||International Chamber of Commerce|
|ICE||Immigration and Customs Enforcement|
|Iceberg transport cost||
1. A cost of transporting a good that uses up some fraction of the good itself, rather than other resources. By analogy with floating an iceberg, costless except for the part of the iceberg that melts. Far from realistic, but a tractable way of modeling transport costs since it impacts no other market. Due to Samuelson (1954).
2. The economic parameter used to represent this cost in an economic model. It has become routine to use a number larger than one, the excess over one being the amount of the good used up in transport. Thus if iceberg cost is γ>1, then for each unit of a good to be delivered to its destination, γ must be shipped.
|ICN||International Competition Network|
|ICOR||Incremental capital output ratio|
|ICP||International Comparison Program|
|ICSID||International Centre for Settlement of Investment Disputes|
|ICTSD||International Centre for Trade and Sustainable Development|
|IDA||International Development Association|
1. Islamic Development Bank
2. Inter-American Development Bank (more commonly, IADB.)
|Ideal price index||
1. A price index that accurately captures the effect on welfare of consumers due to changes in the goods available to them and their prices, taking account of changes in quality and variety as well as price.
2. The Fisher price index because it lies between the upward-biased Laspeyre price index and the downward-biased Paache price index.
3. If the utility function CES or Dixit-Stiglitz with n goods, prices pi, and elasticity of substitution σ, then the ideal price index is P = (Σi=1n pi1-σ)1/(1-σ).
|Identical preferences||The assumption that individuals -- either within a country or in different countries -- have the same preferences. To be useful, since individuals' and countries' incomes may differ, the assumption is often used together with homothetic preferences.|
|IEA||International Energy Agency|
|IEEPA||International Emergency Economic Powers Act|
|IFAD||International Fund for Agricultural Development|
|IFC||International Finance Corporation|
|IFI||International financial institution|
|IFRS||International Financial Reporting Standards|
|IFS||International Financial Statistics|
|IFSWF||International Forum of Sovereign Wealth Funds|
|IIDE||Institute for International and Development Economics|
|IIE||Institute for International Economics, now the Peterson Institute for International Economics.|
|ILO||International Labor Organization|
1. Any departure from equality.
2. In the balance of payments, any surplus or deficit.
|IMF||International Monetary Fund|
|IMF quota||The amount that each IMF member country is required to contribute, partly in its own currency and partly in U.S. dollars, gold, or other member-country currencies. A country's quota is based upon the its GDP and other characteristics, and is the basis for its voting power and access to financing.|
|Immigration||The migration of people into a country.|
|Immigration and Customs Enforcement||The US agency that "enforces federal laws governing border control, customs, trade and immigration to promote homeland security and public safety."|
|Immiserizing||Causing a person, group, or country to become worse off.|
|Immiserizing growth||Economic growth that makes the country worse off. Bhagwati (1958) coined this term for growth that expands exports and worsens the terms of trade sufficiently that real income falls. Johnson (1955) had shown that a market distorted by a tariff could lose from growth and had also, independently, worked out conditions for Bhagwati's result. [Origin]|
|Immiserizing transfer||A transfer that makes the receiving country worse off.|
|Imperial System||See British Imperial System.|
|Imperfect capital mobility||Any departure from perfect capital mobility, permitting interest rates or returns to capital to differ between countries.|
|Imperfect competition||Any departure from perfect competition. However, imperfect competition usually refers to one of the market structures other than perfect competition.|
|Imperfectly competitive||Refers to an economic agent (firm or consumer), group of agents (industry), model, or analysis that is characterized by imperfect competition. Contrasts with perfectly competitive.|
|Implicit price deflator||
1. A broad measure of prices derived from separate estimates of real and nominal expenditures for GDP or a subcategory of GDP.
2. Without qualification the term usually refers to the GDP deflator. Thus an index of prices for everything a country produces, unlike the CPI, which is restricted to consumption and includes prices of imports.
1. Tariff revenue on a good or group of goods, divided by the corresponding value of imports. Often lower than the official or statutory tariff, due both to PTAs and to failures in customs collection.
2. The difference between the price just inside a border and the price just outside it, especially in the case of a good protected by an import quota.
1. A good that enters into a country, across its border, for commercial purposes.
2. A product, which might be a service, that is provided to domestic residents by a foreign producer.
3. To cause a good or service to be an import under definitions 1 and/or 2.
|Import authorization||The requirement that imports be authorized by a special agency before entering a country, similar to import licensing.|
1. Any bias in favor of importing.
2. Applied to growth, it tends to mean a bias against importing, and against trading more generally. Thus growth that is based disproportionately on accumulation of the factor used intensively in the import-competing industry and/or technological progress favoring that industry.
|Import-competing||Refers to an industry that competes with imports. That is, in a two-good model with trade, one good is the export good and the other is the import-competing good.|
|Import cover||The number of months of imports that could be paid for by a country's international reserves; thus a measure of the adequacy of its reserves as a hedge against a crisis.|
|Import coverage ratio||See coverage ratio.|
|Import demand elasticity||The elasticity of demand for imports with respect to price.|
|Import deposit||A requirement that importers put some amount of money in an account for some period of time. The purpose may be to assure that import duties will be paid, if they apply (as in the case of a tourist bringing in a car), or the deposit may simply be a nontariff barrier intended to discourage imports. See prior deposit.|
|Import duty||A tariff on imports.|
|Import elasticity||Usually means the import demand elasticity.|
|Import-export company||A firm whose business consists mainly of international trade: buying goods in one country and selling them in another, thus both exporting and importing. Same as export-import company.|
|Import liberalization||Trade liberalization|
|Import license||The permit, or license, to import under an import quota or under exchange controls.|
|Import licensing||See licensing.|
|Import monitoring||A practice introduced by the US, first for steel and later for textiles and apparel, whereby the Department of Commerce records the volume of imports of specified products and makes these data publicly available. These procedures are intended to facilitate administered protection. See SIMA.|
|Import parity price||The price that a purchaser pays or can expect to pay for an imported good, thus the c.i.f. import price plus tariff plus transport cost to the purchaser's location. This and the export parity price together define a range of the possible equilibrium prices for an equivalent domestically produced good.|
|Import penetration||A measure of the importance of imports in the domestic economy, either by sector or overall, usually defined as the value of imports divided by the value of apparent consumption. Same as import share.|
|Import price index||Price index of the goods that a country imports.|
|Import promotion||Any policy that encourages imports. A policy of export promotion generally has the side effect of stimulating imports as well. Today the term is more commonly used for policies used by developed countries intended to assist developing countries in exporting to them.|
|Import propensity||The marginal propensity to import (or sometimes the average propensity, if they are different).|
|Import protection||See protection.|
|Import quantity index||Quantity index of the goods that a country imports.|
|Import quota||See quota.|
|Import quota auction||See auction quota.|
|Import relief||Usually refers to restraint of imports in a sector so as to assist domestic producers, with the connotation that they have been suffering from import competition. If done formally under existing statutes, it is administered protection, but it may also be done informally by a VER or other nontariff barrier.|
|Import restriction||Any measure to reduce imports, including a tariff or nontariff barrier.|
|Import sensitivity||The extent to which an industry is vulnerable to losing sales, profits, or employment due to an increase in imports.|
|Import share||The fraction of domestic purchases in an industry that are spent on imports. Same as import penetration.|
|Import substitute||A good produced domestically that competes with imports, either as a perfect substitute or as a differentiated product.|
|Import substituting industrialization||Import substitution. (ISI)|
|Import substitution||A strategy for economic development that replaces imports with domestic production. It may be motivated by the infant industry argument, or simply by a desire to mimic the industrial structure of advanced countries. Contrasts with export promotion.|
|Import surcharge||A tax levied uniformly on most or all imports, in addition to already existing tariffs.|
|Import surge||An unusual increase in the quantity of imports of a product, such as may be used as the basis for requesting safeguard protection.|
|Import surveillance||The monitoring of imports, usually by means of automatic licensing.|
|Import-weighted average tariff||See trade weighted average tariff.|
|Imports||The quantity or value of all that is imported into a country.|
1. The impossibility of combining all three of the following: monetary independence, exchange rate stability, and full financial market integration.
2. Any trilemma
1. A tax or tariff. (This is not a commonly used word.)
2. The extra cost per unit of an import imposed on the importer in order to satisfy some requirement, such as a technical barrier to trade.
|Impressment||The act of violently forcing unwilling men into military or naval service.|
|Improve the terms of trade||To increase the value of the terms of trade; that is, to raise the relative price of exports compared to imports. As an increase in what the country gets in return for what it gives up, this is associated with improving country's welfare, though whether that actually occurs depends on why prices change.|
|Improve the trade balance||This usually means a rise in exports relative to imports, thus making the balance of trade larger if positive or smaller if negative. The terminology ignores that exports use resources while imports meet domestic needs, reflecting instead the association of exports with either accumulation of wealth or jobs.|
|In kind||Referring to a payment made with goods instead of money.|
|Inada conditions||Two conditions often assumed of production and sometimes utility functions to assure the existence of optimal interior solutions. The two conditions are that the objective function have infinite slope at zero and zero slope at infinity. Due to Inada (1963).|
|Incidence||See tax incidence.|
1. The amount of money (nominal or real) received by a person, household, or other economic unit per unit time. May or may not be in return for services provided or goods sold.
2. National income.
3. The return earned on an asset per unit time.
|Income disparity||Inequality of income, usually referring to differences in average per capita incomes across countries.|
|Income distribution||The fractions of a population that are at various levels of income. Larger differences in income are said to be "worse" and smaller are "better." International trade and factor movements can alter countries' income distributions by changing prices of low- and high-paid factors.|
1. That portion of the effect of price on quantity demanded that reflects the change in real income due to the price change. Contrasts with substitution effect.
2. Any change that is due to a change in income.
|Income elastic||Having an income elasticity greater than one. Contrasts with income inelastic.|
|Income elasticity||Normally the income elasticity of demand; that is, the elasticity of demand with respect to income.|
|Income-expenditure analysis||The simplest Keynesian model for determining national income, in which desired expenditure (consumption plus investment plus government purchases) in equilibrium depends on income. Gives rise to the income-expenditure multiplier.|
|Income inelastic||Having an income elasticity less than one. Contrasts with income elastic.|
|Income redistribution argument for a tariff||The argument that tariffs should be used in order to redistribute income towards the poor. In a rich country, where unskilled labor is the scarce factor, this can make sense as explained in the Stolper-Samuelson Theorem, but it is a second-best argument.|
|Income tax||A tax levied on incomes of persons or corporations. International differences in income tax rates sometimes induce persons and corporations to relocate to lower-tax jurisdictions.|
|Income terms of trade||The purchasing power, in terms of the price of imports, Pm, of the value (price times quantity) of a country's exports: ITT = PxQx/Pm. Concept and term were introduced by Dorrance (1948). [Origin]|
|Incomplete information||See complete information.|
|Incomplete specialization||Production of goods that compete with imports.|
|Incoterms||International commercial terms; that is, the language of international commerce. Examples include CIF, ex works, and FOB. The name was coined by the International Chamber of Commerce, which maintains and updates their definitions and which they call Incoterms rules.|
1. Referring to a single firm or industry, the rise in cost of production that occurs when output is increased by expanding variable inputs while holding some fixed input constant. A corollary of the Law of Diminishing Returns.
2. In general equilibrium, increasing opportunity cost.
|Increasing opportunity cost||The characteristic of an economy that the opportunity cost of a good rises as more is produced, resulting in a transformation curve that is concave to the origin. In the HO Model, this happens in spite of CRTS if sectors have different factor intensities.|
|Increasing returns industry||An industry whose technology displays substantial increasing returns to scale. Such an industry may be a natural monopoly. It also may provide an argument for industrial policy to induce such an industry to locate in the domestic economy rather than abroad.|
|Increasing returns to scale||A property of a production function such that changing all inputs by the same proportion changes output more than in proportion. Common forms include homogeneous of degree greater than one and production with constant marginal cost but positive fixed cost. Also called economies of scale, scale economies, and simply increasing returns. Contrasts with decreasing returns and constant returns.|
|Incremental capital output ratio||The amount of additional capital that a developing country requires to increase its output by one unit; thus the reciprocal of the marginal product of capital. Used as an (inverse) indicator of how efficiently a country is using the scarce capital it acquires.|
|Indebtedness||The amount that is owed; thus amount of an entity's (individual, firm, or government) financial obligations to creditors.|
|Index||A quantitative measure, usually of something the measurement of which is not straightforward, such as an average of many diverse prices, or a concept such as economic development or human rights.|
|Index number||A numerical index, usually indicating, by comparison with a base value of 100, the size of the index relative to a base year or other benchmark for comparison. Thus, for example, a CPI of 115 in 2004 with a base year of 1999 means that prices have risen 15% from 1999 to 2004.|
|Index number problem||A question the answer to which depends on a choice of weights. E.g., the effect of trade on the real wage of labor in the specific factors model is an index number problem, depending on how much workers consume of (lower-priced) imported and (higher-priced) exported goods.|
|Index of openness||Openness index|
|Index of sustainable economic welfare||An alternative to GDP intended as a measure of welfare rather than simply production. As such it would take account of such things as income distribution, environmental impact, and leisure. No single measure of ISEW seems to have been agreed upon.|
|Indifference curve||A means of representing the preferences and well-being of consumers. Formally, it is a curve representing the combinations of arguments in a utility function that yield a given level of utility and therefore among which a consumer with that utility function would be indifferent.|
|Indigenous innovation policy||A policy introduced by China in 2009 requiring that purchases by government agencies favor products whose intellectual property has been developed, owned, and registered in China.|
|Indirect exchange rate||The foreign-currency price of a unit of domestic currency. (This definition appears in several places, but it is a mystery to me why this is any less direct than its reciprocal.)|
|Indirect export||Export of a good by someone other than the firm that produced it, such as by a trading company or by a foreign purchaser.|
|Indirect export subsidy||An upstream subsidy.|
|Indirect tax||A tax levied on expenditure, such as a sales tax, excise tax, or value added tax. Contrasts with direct tax.|
|Indirect trade deflection||Same as internal trade deflection. This term seems to be more commonly used than internal trade deflection.|
|Industrial concentration||The extent to which a small number of firms dominates an industry, often measured by a concentration ratio or by a Herfindahl index. Concentration is, in effect, the opposite of competition, although in an open economy imports complicate the relationship.|
|Industrial policy||Government policy to influence which industries expand and, perhaps implicitly, which contract, via subsidies, tax breaks, and other aids to favored industries. The purpose, aside from political favor, may be to foster competitive advantage where there are beneficial externalities and/or scale economies.|
|Industrial targeting||Industrial policy|
|Industrialization||The establishment and subsequent growth of industrial production in a country, usually meaning heavy manufacturing.|
|Industrialized||Having experienced substantial industrialization. Industrialized countries are usually the same as developed countries.|
1. The portion of an economy that produces a particular related group of products; e.g., the motor vehicle industry, the tourism industry, and the mining industry. A list of industries might well include agriculture.
2. One of three main sectors of an economy, the other two being the agriculture and service sectors. Industry in turn includes mining and manufacturing.
|Inelastic||Elasticity less than one. For price elasticity of demand, it means expenditure falls as price falls. For income elasticity it means expenditure share falls as income rises. Contrasts with elastic and unit elastic.|
|Inelastic offer curve||An offer curve with inelastic demand for imports. That inelasticity implies that exports decline as imports increase, and therefore that the offer curve is backward bending. Strictly speaking, the natural definition of an offer curve's elasticity would be negative in this case, not just less than one, but that definition is seldom used.|
|Inequality||Differences in per capita income or household income across populations within a country or across countries.|
|Infant industry argument||The theoretical rationale for infant industry protection.|
|Infant industry protection||Protection to sustain a newly established domestic industry that is less productive than foreign producers. If productivity rises with experience, as with learning by doing or dynamic economies of scale, enough to pass Mill's and Bastable's tests, there is a second-best argument for protection. The term is very old and the idea older, but a classic treatment may be found in Baldwin (1969). [Origin]|
|Inferior good||A good the demand for which falls as income rises. The income elasticity of demand is therefore negative. Contrasts with normal good.|
|Infinitely elastic||Having an elasticity that is infinitely large, usually with respect to price, in which case what it means in effect is that the price is constant, given, or fixed. A small open economy, usually by definition, faces world supply and demand that are infinitely elastic at a given world price.|
|Inflation||Increase in the overall price level of an economy, usually as measured by the CPI or by the implicit price deflator.|
|Inflation adjusted||Adjusted for inflation.|
|Inflation rate||The percentage increase in the price level per year. See inflation.|
|Inflation targeting||A principle of monetary policy that the rate of inflation should be kept within a pre-specified range, using expansionary policy when the rate is below that range and contractionary policy above it.|
|Inflation tax||The use of monetary expansion and consequent inflation to finance a government deficit by reducing the real value of outstanding nominal debt. Foreign holders of debt bear the tax, without experiencing inflation, due to exchange rate depreciation.|
|Inflow||See capital inflow.|
|Information Technology Agreement||A plurilateral agreement within the WTO, concluded in 1996, providing for participants to completely eliminate tariffs on specified IT products. As of August 2018, the agreement had 82 participants, covering about 97% of trade in these products.|
|Information Technology Agreement Expansion||An expansion of the 1996 ITA, agreed by 50 WTO members at the Nairobi Ministerial in December 2015, expanding and updating the list of products covered.|
|Information Technology Product||Any product commonly classed as "high technology," including (as listed in the explanation of the ITA, "computers, telecommunication equipment, semiconductors, semiconductor manufacturing and testing equipment, software, scientific instruments, as well as most of the parts and accessories of these products."|
|Inframarginal||Inside of, as opposed to at, the margin. Example: for a firm that is producing 100 units, marginal cost is the cost of the 101st unit, while inframarginal cost refers, usually only qualitatively and without a precise definition, to the cost of units 1,...,100.|
|Inframarginal rent||The quasi rent earned by a perfectly competitive firm in the short run. If price equals marginal cost, then it earns nothing on the marginal unit, but if marginal cost increases with output due to a fixed factor, then price exceeds marginal cost for inframarginal units.|
|Infrastructure||The facilities that must be in place in order for a country or area to function as an economy and as a state, including the capital needed for transportation, communication, and provision of water and power, and the institutions needed for security, health, and education.|
|Injury||Harm to an industry's owners and/or workers. Import protection under the safeguards, AD, and CVD provisions of the GATT require a finding of serious (for safeguards) or material (for AD/CVD) injury. In the US, these are determined by the USITC.|
|Injury margin||In cases of anti-dumping and countervailing duties, the difference between the import price and the price that would be needed to prevent injury.|
|Injury test||The determination by an administrative authority, in a request for administered protection, of whether the domestic industry has experienced sufficient injury to meet the requirement of the protection requested: material injury in cases of unfair trade or serious injury in cases of safeguards.|
|Innovation||The creation or introduction of something new, especially a new product or a new way of producing something.|
1. Anything that is used in a production process, including both the services of primary factors and intermediate inputs.
2. Sometimes input refers only to intermediate inputs, as distinct from primary factors.
|Input-output||Refers to the structure of intermediate transactions among industries, in which one industry's output is an input to another, or even to itself.|
|Input-output table||A table of all inputs and outputs of an economy's industries, including intermediate transactions, primary inputs, and sales to final users. Developed by Wassily Leontief, the table can be used to calculate gross outputs and primary factor inputs needed to produce specified net outputs. Leontief (1954) used this to find the factor content of U.S. trade, generating the Leontief Paradox|
|Inshoring||Term used occasionally as an opposite to offshoring, when a firm that has offshored an activity relocates it back to its home economy.|
1. Too small to matter, usually meaning that the size of a variable or effect is small enough that it will not be noticed in comparison to whatever else is going on.
2. Not statistically significant.
|Insourcing||Same as inshoring, and opposite of outsourcing.|
|Instability||The property of not being stable; thus, moving around over time, and/or uncertain in its movement over time.|
|Institute for International and Development Economics||A web-based network of research economists in Europe and North America focusing on the global economy, trade and financial integration, and international development.|
|Institute for International Economics||See Peterson Institute for International Economics.|
|Institutional investor||An owner of financial assets other than a person, and for whom such ownership is a main part of its business. Main examples are banks, hedge funds, insurance companies, mutual funds, and pension funds.|
1. An economic variable that is controlled by policy makers and can be used to influence other variables, called targets. Examples are monetary and fiscal policies used to achieve external and internal balance.
2. See financial instrument.
3. Instrumental variable
|Instrumental variable||In econometrics, a variable that is correlated with a variable of interest and independent of the dependent variable of a regression. Use of an instrument is an effective way of controlling for endogeneity.|
|Insurance||A financial arrangement to reduce risk. The purchaser of insurance pays a fixed amount, in return for which the seller agrees to pay some larger amount if an unlikely adverse event occurs.|
|Intangible service||Same as service, since all services are intangible.|
|Integrated World Economy||A hypothetical, theoretical benchmark in which both goods and factors move costlessly between countries. The IWE is associated with a rectangular diagram depicting allocation of factors to countries, showing conditions for FPE. The name was coined by Dixit and Norman (1980), but the concept and technique was introduced by Travis (1964).|
|A box diagram, somewhat analogous to an Edgeworth box, depicting alternative allocations of world endowments of two factors between two countries. It is used to illustrate the conditions for factor price equalization.|
|Integration||Economic integration refers to reducing barriers among countries to transactions and to movements of goods, capital, and labor, including harmonization of laws, regulations, and standards. Common forms include FTAs, customs unions, and common markets. Sometimes classified as shallow integration vs. deep integration.|
|Intellectual property||Products of the mind, such as inventions, works of art, music, writing, film, etc., ownership of which may be governed by patents, trademarks, and copyrights.|
|Intellectual property protection||Laws that establish and maintain ownership rights to intellectual property. The principal forms of IP protection are patents, trademarks, and copyrights.|
|Intellectual property right||The right to control and derive the benefits from something one has invented, discovered, or created.|
|Intensity||The amount that something is used, as compared to something else. See factor intensity.|
|Intensive||Of production, using a relatively large amount of a specified input, such as labor intensive or capital intensive. See factor intensity.|
|Intensive margin||Refers to varying the amount of trade (or other activity) of a firm, industry, or country by varying the quantities of a given number of products, as opposed to the extensive margin at which it would vary the number of products.|
|Inter-American Development Bank||A development bank for the countries of Latin America and the Caribbean.|
|Interbank rate||The rate of interest charged by a bank on a loan to another bank. See LIBOR.|
|Interdependence||See economic interdependence.|
|Interest||The amount paid by a borrower to a lender above the amount (the principal) that has been borrowed.|
|Interest arbitrage||A form of arbitrage intended to profit from a difference in interest rates in different markets. It consists of simultaneously borrowing at the low interest rate and lending at the higher interest rate in order to profit from the difference. If done in two different currencies, it may be covered or uncovered.|
|Interest bearing account||An account in a bank or other financial institution that pays interest to the depositor.|
|Interest equalization tax||A 15% tax on interest received from foreign borrowers levied between 1963 and 1974 by the United States, intended to discourage capital outflows.|
|Interest parity||Equality of returns on otherwise identical financial assets denominated in different currencies. May be uncovered, with returns including expected changes in exchange rates, or covered, with returns including the forward premium or discount. Also called interest rate parity and interest parity condition.|
|Interest rate||The rate of return on bonds, loans, or deposits. When one speaks of "the" interest rate, it is usually in a model or other context in which there is only one.|
|Interest rate parity||Interest parity|
|Interest rate spread||See spread.|
|Intergovernmental organization||An organization the members of which are national governments. Examples include the United Nations, its many subsidiary organizations such as UNCTAD, and a great many others.|
|Inter-industry trade||Trade in which a country's exports and imports are in different industries. Typical of models of comparative advantage, such as the Ricardian Model and Heckscher-Ohlin Model. Contrasts with intra-industry trade.|
|Intermediate good||Same as intermediate input.|
|Intermediate input||An input to production that has itself been produced and that, unlike capital, is used up in production. As an input it is in contrast to a primary input and as an output it is in contrast to a final good. A very large portion of international trade is in intermediate inputs.|
|Intermediate transaction||The sale of a product by one firm to another, presumably to be used as an intermediate input.|
|Intermittent dumping||Dumping that occurs for short periods of time, presumably to dispose of temporary surpluses of goods and not intended to eliminate competition. Same as sporadic dumping and distress dumping.|
|Intermodalism||The use of more than one form (mode) of transportation, as when a shipment travels by both sea and rail.|
|Internal balance||A target level for domestic aggregate economic activity, such as a level of GDP that minimizes unemployment without being inflationary. See the assignment problem. Contrasts with external balance.|
|Internal debt||The amount owed by a country to, in effect, itself. It includes, for example, the portion of the government debt that is denominated in the country's own currency and held by its own residents.|
|Internal devaluation||Reduction in a country's nominal wages and prices in order to make it more competitive internationally. Achieves the same purpose as an exchange rate devaluation but at much greater cost, since it normally requires recession to make it happen.|
|Internal economies of scale||Economies of scale that are internal to a firm; that is, the firm's average costs fall as its own output rises. Likely to be inconsistent with perfect competition. Contrasts with external economies of scale.|
|Internal equilibrium||Internal balance|
|Internal market||See complete the internal market.|
|Internal rate of return||A way of quantifying the stream over time of returns on an investment relative to its cost. Defined as the interest rate at which the present value of the returns equals the cost.|
|Internal trade deflection||The shift of domestic sales from a low-tariff member of an FTA to a high-tariff member, displacing imports there and inducing more imports at home. Effects are same as trade deflection without being stopped by rules of origin. Identified and named by Richardson (1995), though others have used the equivalent indirect trade deflection.|
|Internalization||One of the three pillars of the OLI paradigm for understanding FDI and the formation of multinational enterprises, this refers to the advantage that a firm derives from keeping multiple activities within the same organization.|
|Internalize||To cause, usually by a tax or subsidy, an external cost or benefit of someone's actions to be experienced by them directly, so that they will take it into account in their decisions.|
|International||Involving transactions or relations between nations. The term, according to Suganami (1978), was coined by Bentham (1789).|
|International Accounting Standards Board||An independent body, based in London, that sets accounting standards in the form of the International Financial Reporting Standards.|
|International adjustment process||
1. Any mechanism for change in international markets.
2. The mechanism by which payments imbalances diminish under pegged exchange rates and nonsterilization. Like the specie flow mechanism, exchange-market intervention causes money supplies of surplus countries to expand and vice versa, leading to price and interest rate changes that correct the current and capital account imbalances.
|International Bank for Reconstruction & Development||The largest of the five institutions that comprise the World Bank Group, IBRD provides loans and development assistance to middle-income countries and creditworthy poorer countries.|
|International Bovine Meat Agreement||A plurilateral agreement on trade in bovine meat, originally negotiated as part of the Tokyo Round, continued briefly as a plurilateral agreement after the Uruguay Round, but terminated in 1997.|
|International capital movement||The acquisition or sale of assets, financial or real, across international borders. Measured in the financial account of the balance of payments.|
|International cartel||See cartel.|
|International Centre for Settlement of Investment Disputes||One of the five institutions that comprise the World Bank Group, ICSID provides facilities for the settlement - by conciliation or arbitration - of investment disputes between foreign investors and their host countries.|
|International Centre for Trade and Sustainable Development||An "independent non-profit organisation based in Geneva, Switzerland" whose goal "is to advance sustainable development through trade-related policymaking."|
|International Chamber of Commerce||Calling itself the "voice of world business," the ICC promotes the cause of international business and open markets. It produces the Open Markets Index.|
|International Cocoa Organization||An intergovernmental organization set up in 1973 to administer the International Cocoa Agreement, the most recent (as of August 2018) version of which, the 7th, was negotiated in 2010 and came into force in October 2012. See international commodity agreement.|
|International Coffee Organization||An intergovernmental organization set up in 1963 that administers the International Coffee Agreement. As of August 2018, the latest agreement entered into force in 2007. See international commodity agreement.|
|International commodity agreement||An agreement among producing and consuming countries to improve the functioning of the global market for a commodity. May be administrative, providing information, or economic, influencing world price, usually using a buffer stock to stabilize it. ICAs are overseen by UNCTAD.|
|International Comparison Program||A program currently coordinated by the World Bank to gather extensive information about prices in many countries so as to ascertain the purchasing power of their currencies and thus permit international comparisons of real incomes. These data are used by the Penn World Table.|
|International Competition Network||A network for cooperation among the antitrust agencies of a large number of both developed and developing countries.|
|International competitiveness||See competitiveness.|
|International Consumption Correlations Puzzle||The observation that the correlations across countries of their growth of consumption are lower than one would expect if international capital markets permitted greater international pooling of risks. Identified by Obstfeld and Rogoff (2001) as one of their Six Major Puzzles in International Macroeconomics.|
|International Cotton Advisory Committee||An association of governments dealing with cotton. It grew out of an International Cotton Meeting in 1939. See international commodity agreement.|
|International Dairy Agreement||A plurilateral agreement on trade in dairy products, originally negotiated as part of the Tokyo Round, continued briefly as a plurilateral agreement after the Uruguay Round, but terminated in 1997.|
|International Development Association||One of the five institutions that comprise the World Bank Group, IDA provides interest free loans and other services to the poorest countries.|
|International economics||The study of economic interactions among countries -- including trade, investment, financial transactions, and movement of people -- and the policies and institutions that influence them.|
|International economies of scale||International returns to scale|
|International elasticity puzzle||The contrast between the low elasticities of substitution between domestic and imported goods needed empirically to match the data in models of international real business cycles and the high elasticities needed to match the growth of trade after trade liberalization. Due to Ruhl (2008).|
|International Emergency Economic Powers Act||"Enacted October 28, 1977, [this] is a United States federal law authorizing the President to regulate commerce after declaring a national emergency in response to any unusual and extraordinary threat to the United States which has a foreign source."|
|International Energy Agency||An organization formed in 1974 to help countries collectively respond to oil supply disruptions and generally to "ensure reliable, affordable, and clean energy to its members and beyond."|
|International exhaustion||Under international exhaustion, rights of the owner of intellectual property to control further distribution end with first sale anywhere in the world, and parallel imports cannot be excluded. Contrasts with national exhaustion.|
|International externality||An externality that extends across national borders. A negative example is emission of greenhouse gases that contribute to global warming. A positive example is technological innovation that diffuses to other countries.|
|International factor movement||The international movement of any factor of production, including primarily labor and capital. Thus includes migration and foreign direct investment. Also may include the movement of financial capital in the form of international borrowing and lending.|
1. The monetary side of international economics, in contrast to the real side, or real trade. Also often called international monetary economics or international macroeconomics. Each term has a slightly different meaning, and none really seems right for the entire field.
2. The study of international financial markets including exchange rates.
|International Finance Corporation||One of the five institutions that comprise the World Bank Group, IFC promotes growth in the developing world by financing private sector investments and providing technical assistance and advice to governments and businesses.|
|International financial institution||Usually refers to intergovernmental organizations dealing with financial issues, most often the IMF and/or the World Bank.|
|International Financial Reporting Standards||Accounting standards set by the International Accounting Standards Board and required in Europe and parts of Asia, Africa and Latin America. Other countries have committed to adopt or converge toward these, and the US permits non-US companies to use them, though US companies use the Generally Accepted Accounting Priciples.|
|International Financial Statistics||
1. A monthly publication of the International Monetary Fund.
2. An online database of international financial and economic data provided by the International Monetary Fund.
|International Fisher Effect||The theory that exchange-rate changes will match, or be expected to match, international differences in nominal interest rates. It follows from the (domestic) Fisher Effect together with purchasing power parity.|
|International Forum of Sovereign Wealth Funds||A voluntary group of sovereign wealth funds that meets to exchange views and propagate the Santiago Principles. As of August 2018, it had 32 member funds.|
|International Fund for Agricultural Development||A United Nations specialized agency that finances projects primarily for food production in developing countries.|
|International Grains Council||An intergovernmental organization, concerned with grains trade, that administers the Grains Trade Convention of 1995. See international commodity agreement.|
|International indebtedness||The amount that a country's government and/or its private sector has borrowed from other countries and/or international financial institutions.|
|International institution||An organization established by multiple national governments, usually to administer programs or pursue purposes that the governments have agreed upon.|
1. International capital movement
2. Foreign direct investment.
|International investment position||The total value of assets, real and financial, owned abroad by a country's people, firms, and government, minus the total value of foreign-owned assets in the country.|
|International Jute Organization||The organization set up in 1984 to implement the International Agreement on Jute and Jute Products, 1982. Its successor organization is the International Jute Study Group which administers a new agreement as of 2002. See international commodity agreement.|
|International Labour Organization||A United Nations specialized agency that establishes and monitors compliance with international standards for human and labor rights.|
|International Law||The rules that countries recognize as governing their relations with one another. May be divided broadly into customary international law and conventional international law.|
|International Lead and Zinc Study Group||The international organization formed in 1959 to share information about lead and zinc. See international commodity agreement.|
|International liquidity||Refers to the adequacy of a country's, or the world's, international reserves. Under the Bretton Woods System, liquidity was a problem, since it depended on US dollars and thus a US deficit. The SDR was an attempt to fix this.|
|International macroeconomics||Same as international finance, but with more emphasis on the international determination of macroeconomic variables such as national income and the price level.|
|International monetary economics||Same as international finance, but with more emphasis on the role of money and less on other financial assets.|
|International Monetary Fund||An organization formed originally to help countries to stabilize exchange rates, but today pursuing a broader agenda of financial stability and assistance. As of August 2018, it had 189 member countries.|
|International Olive Council||The intergovernmental organization in charge of administering the International Olive Oil Agreement, which originated in 1956. See international commodity agreement.|
|International Organization for Migration||International organization assisting migrants and the management of migration.|
|International Organization for Standardization||An NGO, using the acronym ISO, that develops and publishes international standards. It is a network of national standards institutes from 161 countries (as of August 2018). Some of these institutes are parts of governments, while others are private-sector partnerships of industry associations.|
|International parity conditions||Refers collectively to purchasing power parity and interest parity.|
|International political economy||A field of study within social science, especially political science, that addresses the interrelationships between international economics and political forces and institutions.|
|International price||World price|
1. All aspects of interactions among nations.
2. The field within the discipline of political science that studies the mechanisms and institutions through which countries interact.
|International reserves||Foreign-currency assets and gold, held by a central bank, used for intervening in the exchange market to influence or peg the exchange rate. Usually includes foreign currencies (especially US dollars), other assets denominated in foreign currencies, gold, and a small amount of SDRs.|
|International returns to scale||External economies of scale that extend across the world and are not confined to a single country. Due to Ethier (1982).|
|International Rubber Study Group||An intergovernmental organization, founded in 1944, that provides a forum for the discussion of matters affecting the supply and demand for both synthetic and natural rubber. See international commodity agreement.|
|International sanction||See sanction definition #2.|
|International Services Agreement||A proposed plurilateral agreement to be negotiated by a group of willing countries outside the framework of the Doha Round, liberalizing trade in services. The idea seems to have begun in 2011 or 2012, and evolved into the Trade in Services Agreement, the status of which is uncertain as of August 2018.|
|International specialization||See specialization.|
|International Standard Industrial Classification||A classification system for industries, ISIC is organized by the activity performed by the industry, and used for recording and reporting data on industrial activities, including output and employment.|
|International Sugar Organization||An intergovernmental body that administers the International Sugar Agreement of 1992. See international commodity agreement.|
|International System of Units||The system of units of measurement, Système Internationale d'Unités and abbreviated SI in all languages, adopted by the 11th General Conference on Weights and Measures in Paris in 1960. It extends and incorporates the metric system and has been adopted by many countries (but not the US).|
1. This could mean, if it existed, a tax levied by an international body on the governments or private sector actors throughout the world. This does not exist, however, except among small groups of countries that have agreed to share resources, such as the European Union.
2. The field of study that deals with how separate national taxing authorities interact and how private sector actors respond to international differences in taxing regimes.
|International trade||See trade.|
|International Trade Administration||A part of the United States Department of Commerce, the ITA acts on behalf of U.S. businesses in global competition. In trade policy, its Import Administration has the duty of determining whether imports are dumped or subsidized and therefore may be subject to anti-dumping and/or countervailing duties.|
|International Trade Centre||An international agency whose purpose is to help developing countries export. It is a "joint technical cooperation agency" of UNCTAD and the WTO.|
|International Trade Commission||The United States International Trade Commission|
|International Trade Organization||Conceived as a complement to the Bretton Woods institutions, the ITO was to provide international discipline in the uses of trade policies. The Havana Charter for the ITO was not approved by the United States Congress, however, and the initiative died, replaced by the continuing importance of the GATT.|
|International Tropical Timber Organization||An organization created in 1986 under the auspices of the United Nations for consultation among producers and consumers of tropical timber. An objective was that all timber traded by members should originate from sustainably managed forests.|
|International Working Group of Sovereign Wealth Funds||A group of countries that maintain sovereign wealth funds and that formulated the Santiago Principles. In 2009 the group established the International Forum of Sovereign Wealth Funds.|
|Internationalization||Another term for fragmentation. Used by Grossman and Helpman (1999).|
|Intertemporal||Occurring across time, or across different periods of time.|
|Intertemporal trade||Trade across time, as when a country imports in one time period paying for the imports with exports in a different time period, earlier or later. An trade imbalance is presumed to reflect intertemporal trade.|
|Intervention||See market intervention and exchange market intervention.|
|Intervention currency||A currency that is commonly used by central banks for exchange market intervention. See reserve currency.|
|Intra-firm trade||International trade conducted within a firm, as when a subsidiary of a company exports to or imports from another subsidiary or the parent company in a different country.|
|Intra-industry trade||Trade in which a country exports and imports in the same industry, in contrast to interindustry trade. Ubiquitous in the data, much IIT is due to aggregation. Can be horizontal or vertical. Grubel and Lloyd (1975) wrote the book on IIT and introduced the Grubel-Lloyd index to measure it.|
|Intra-mediate trade||Another term for fragmentation. Used by Antweiler and Trefler (2002).|
|Intra-product specialization||Another term for fragmentation. Used by Arndt (1997).|
|Inventories||Goods being kept on hand for future use as inputs to production or for future sale.|
|Inverse demand function||A function representing the relationship between quantity demanded and price, specified for convenience with price as a function of quantity instead of the more usual quantity as a function of price. Thus if a conventional demand function is QD = a − bP, then the inverse demand function is P = (a/b) − QD/b.|
|Inverse supply function||A function representing the relationship between quantity supplied and price, specified for convenience with price as a function of quantity instead of the more usual quantity as a function of price. Thus if a conventional supply function is QS = a + bP, then the inverse supply function is P = QS/b − (a/b). Especially appropriate if supply is infinitely elastic (i.e., constant cost, c0): P = c0.|
|Inversion||See tax inversion.|
|Inverted tariff structure||A situation in which the tariff on an industry's product is lower than the tariff(s) on product(s) that it uses as input(s). Result is an ERP that is smaller than the tariff on the product. It may, if the gap is large, yield negative effective protection.|
|Invertible||Said of a matrix if its inverse exists. That is, a matrix A is invertible if there exists another matrix B such that BA=I, where I is the identity matrix.|
1. Addition to the stock of capital of a firm or country.
2. Purchase of an asset, real or financial.
3. The use of resources today for the purpose of increasing productivity or income in the future.
|Investment bank||A commercial institution that provides a variety of services to firms and other entities that seek to raise funds and/or invest their own funds. These services include underwriting, advising, managing assets, and providing their own or borrowed funds. The largest investment banks today operate in many countries.|
|Investment deflection||In the context of a free trade area, investment in the member country with a lower tariff on an imported input, causing production deflection.|
|Investment performance requirement||See performance requirement.|
|Investor-state dispute settlement||A common provision of some FTAs and BITs. It allows a firm from one country that has invested in another to bring action against a unit of the host government if it acted to reduce the value of the firm's investment, and to settle the dispute through an arbitration panel rather than a court.|
|Invisible||In referring to international trade, used as a synonym for "service." "Invisibles trade" is trade in services. Contrasts with visible.|
|Invoice||The itemized bill for a transaction, stating the nature of the transaction and its price. In international trade, the invoice price is often the preferred basis for levying an ad valorem tariff.|
|Inward FDI||Foreign direct investment by a foreign firm establishing a facility within the domestic country. Contrasts with outward FDI.|
|Inward-oriented development||A strategy of promoting development by encouraging production, as well as research and development, for domestic markets. Seems to be the same as import substitution, although proponents make a distinction between them.|
|IOM||International Organization for Migration|
|IPE||International political economy|
|IPRs||Intellectual property rights|
|IRR||Internal rate of return|
|IRS||Increasing returns to scale = IRTS.|
|IRTS||Increasing returns to scale.|
|IS curve||In the IS-LM model, the curve representing the combinations of national income and interest rate at which aggregate supply and demand for goods are equal. It is normally downward sloping: a rise in income increases output by more than consumption, requiring a fall in interest rate to raise investment.|
|ISA||International Services Agreement.|
|ISDS||Investor-state dispute settlement.|
|ISEW||Index of sustainable economic welfare|
|ISI||Import substituting industrialization|
|Islamic Development Bank||A development bank for Muslim countries and communities.|
|ISIC||International Standard Industrial Classification|
|IS-LM Model||A Keynesian macroeconomic model, popular especially in the 1960s, in which national income and the interest rate were determined by the intersection of two curves, the IS curve and the LM curve. Due to Hicks (1937) and Hansen (1949).|
|See IS-LM-BP Model.|
|IS-LM-BP Model||A particular version of the Mundell-Fleming Model that extends the IS-LM model by including in the diagram a third curve, the BP-curve, representing the balance of payments and/or the exchange market.|
|ISO||Acronym of the International Organization for Standardization, chosen to be used in all languages even though it may not exactly match the organization's name in any.|
|ISO 9000||A family of standards for quality management systems, maintained by the International Organization for Standardization.|
|Iso-price curve||A curve along which price is (or prices are) constant, most commonly in factor-price space where it shows the combinations of prices of factors consistent with zero profit in producing a good at a specified price of the good.|
|Isocost line||A line along which the cost of something -- usually a combination of two factors of production -- is constant. Since these are usually drawn for given prices, which are therefore constant along the line, an isocost line is usually a straight line, with slope equal to the ratio of the (factor) prices.|
|Isoquant||A curve representing the combinations of factor inputs that yield a given level of output in a production function.|
|Israel-US Free Trade Area||A free trade area that was initiated in 1985 between the United States and Israel.|
|IT Product||Information Technology Product|
1. Information Technology Agreement
2. International Trade Administration
1. International Trade Centre
2. International Trade Commission (USITC)
|ITO||International Trade Organization|
|ITT||Income terms of trade|
|IWE||Integrated World Economy|
|IWG||International Working Group of Sovereign Wealth Funds|