|TAA||Trade adjustment assistance|
|Takeover||The acquisition by one firm of another.|
|Tantrum||See taper tantrum and tariff tantrum.|
|Taper tantrum||The panic response in international bond markets when the Fed began to reduce the level of (to "taper") its policy of quantitative easing.|
1. Any objective of economic policy.
2. The value of an economic variable that policy makers regard as ideal and use as the basis for setting policy. Contrasts with instrument.
3. The level of an exchange rate that guides exchange market intervention by a central bank or exchange stabilization fund.
|Target zone||An exchange regime in which intervention is used to keep the exchange rate between upper and lower limits, the target zone. Since pegged exchange rates also set narrow limits of intervention, "target zone" implies a wider band. Classically analyzed by Krugman (1991c).|
|Targeting||See industrial targeting|
|Tariff||A tax on trade, usually an import tariff but sometimes used to denote an export tax. Tariffs may be ad valorem or specific.|
|Tariff Act of 1857||After more than two decades of mostly low and declining tariffs and prosperity, the US government found itself in surplus and this act lowered tariffs still further.|
|Tariff Act of 1930||Smoot-Hawley Tariff.|
|Tariff Acts of 1870-1883||US tariffs were raised and lowered by small amounts on average four times in this period, with the Tariff Acts of 1870, 1872, 1875, and 1883. The 1883 change got the name Mongrel Tariff due to its unpopularity.|
|Tariff anomaly||An unusual situation in which the tariff on a semi-processed good is higher than on the finished good, causing the effective rate of protection on the finished good to be lower than its tariff and even, potentially, negative. Thus the opposite of tariff escalation.|
|Tariff binding||A commitment, under the GATT, by a country not to raise the tariff on an item above a specified level, also called the tariff binding, the bound rate, or the bound tariff.|
|Tariff classification||See tariff heading.|
|Tariff Commission||The name of what is today the United States International Trade Commission as of its founding in 1916, until it was renamed the USITC in 1975.|
|Tariff complementarity||The idea that reducing a tariff on a good from one trading partner, as in an FTA, creates the incentive to reduce that tariff against other trading partners. Theoretical models of tariff setting disagree on whether this or its opposite, tariff substitutability, makes sense. Term is due to Bagwell and Staiger (1999).|
|Tariff deficit||Despite appearances, this is not a term in international economics. It means the difference between the price (called a tariff) that a regulated utility such as an electricity producer is allowed to charge and its cost per unit.|
|Tariff dispersion||The inequality of the tariffs levied by a country. It is generally the case that, for a given average level of a country's tariffs, greater dispersion causes greater distortion and thus reduces welfare.|
|Tariff engineering||The design and manufacture of a product's characteristics specifically to qualify for a lower tariff than might otherwise have applied.|
|Tariff equivalent||The level of tariff that would be the same as a given NTB in terms of its effect, usually on the quantity of imports.|
|Tariff escalation||In a country's tariff schedule, the tendency for tariffs to be higher on processed goods than on the raw materials from which they are produced. This causes the effective rate of protection on these goods to be higher than the nominal rate and puts LDC producers of primary products at a disadvantage.|
|Tariff factory||A production facility established by a foreign firm through FDI in a country in spite of its higher production costs, in order to serve its market without paying a tariff. Thus the result of tariff-jumping FDI.|
|Tariff game||A game in which the players are countries each setting tariffs on imports from others.|
|Tariff heading||The descriptive name attached to a tariff line, indicating the product to which it applies. Same as tariff classification.|
|Tariff inversion||Inverted tariff structure|
|Tariff items 806 & 807||Lines 806.30 and 807.00 of the U.S. tariff schedule, which permit goods that have been sent abroad for processing or assembly to be admitted subject to duty only on the value added abroad.|
|Tariff jumping||The establishment of a production facility within a foreign country, through FDI or licensing, in order to avoid a tariff on exports into that country.|
|Tariff line||A single item in a country's tariff schedule.|
|Tariff of Abominations||This set of very high tariffs, averaging over 45%, was put in place in 1828 to protect the manufacturers of the Northern US states. It did so at the expense of the Southern states, who gave it this name and worked to reverse it, eventually, with the Compromise Tariff of 1833.|
|Tariff peak||In a tariff schedule, a single tariff or a small group of tariffs that are particularly high, often defined as greater than three times the average nominal tariff.|
|Tariff preference||A lower (or zero) tariff on a product from one country than is applied to imports from most countries. This violation of the MFN principle is permitted in special cases, including some preferential trade arrangements and the GSP.|
|Tariff protection||Protection provided by a tariff.|
|Tariff quota||A tariff rate quota.|
|Tariff rate quota||A combination of an import tariff and an import quota in which imports below a specified quantity enter at a low (or zero) tariff and imports above that quantity enter at a higher tariff. Also called a tariff quota.|
|Tariff redundancy||See redundant tariff.|
1. This can refer to any change in the structure of a country's tariffs.
2. The objective of British political and other figures in 1903, led by Joseph Chamberlain, to raise tariffs on imports especially from the United States and Germany, who were regarded as engaging in unfair trade, and to provide tariff preferences to members of the British Commonwealth.
|Tariff Reform League||The British pressure group pushing for tariff reform in 1903.|
|Tariff revenue||See revenue.|
|Tariff schedule||The list of all of a country's tariffs, organized by product.|
|Tariff Schedule of the United States, Annotated||The official product nomenclature for specifying tariffs in the United States used until 1988, when it was replaced with the harmonized system.|
|Tariff substitutability||See tariff complementarity.|
|Tariff surcharge||Import surcharge|
1. The response of financial markets to an announcement of tariffs, first and perhaps only used when President Trump raised tariffs in 2018.
2. Also used to refer to President Trump's actions themselves, when he raised tariffs in 2018.
|Tariff wall||A tariff, presumably a high one, perhaps in lots of industries. The term is used to highlight the difficulty foreign sellers have in getting their products past the tariff, often in the context of the incentive therefore provided for FDI. See foreign investment argument for protection.|
|Tariff-and-retaliation game||The game of countries setting tariffs knowing that by doing so they alter the terms of trade to their own advantage. This is one very specific form of trade war.|
|Tariffication||Conversion of NTBs to tariffs at the level of their tariff equivalents. In the Uruguay Round, agricultural NTBs were tariffied and bound, the purpose being to replace unwieldy NTBs with tariffs that could then become the subject of negotiation. [Origin]|
|Tariffs and retaliation||The process of one country raising its tariff to secure some advantage, to which another country responds by raising its tariff, the first raises its tariff still further, etc. See retaliation and trade war. Classic treatment by Johnson (1953/54).|
|Tastes||In economics, this is usually a synonym for preferences, in the sense of attitudes toward different goods.|
|Tax||An amount of money required to be paid to government by persons or firms.|
|Tax base||The amount on which a taxpayer pays taxes, as for example their taxable income in the case of an income tax, or the taxable value of their property in the case of a property tax.|
|Tax break||Any provision of the tax code, such as a tax credit or tax deduction, that reduces the amount of tax that a firm or individual will pay, perhaps in return for behavior that the government wishes to encourage.|
|Tax buoyancy||A measure of how rapidly the revenue from a tax rises (including due to any change in tax law) as the tax base rises. It is defined, like an elasticity, as %ΔR / %ΔB where R is the real revenue from the tax, B is the real tax base, and %Δ is percent change. It differs from tax elasticity in not holding the tax law constant.|
|Tax compliance||The extent to which economic agents pay the taxes that their government has levied. In developing countries, a low rate of tax compliance is often a significant hindrance to economic development.|
|Tax concession||A special provision for a firm not to pay a tax that it would otherwise owe, provided by a local, state, or national government as an inducement to invest. Competition among governments, seeking to attract investment, to some extent undermines the benefits that countries might otherwise receive from FDI.|
|Tax credit||A provision of the tax code that specifies an amount by which a taxpayer's taxes will be reduced in return for some behavior.|
|Tax deduction||A provision of the tax code that specifies an amount by which a taxpayer's tax base will be reduced in return for some behavior, resulting in a lowering of the amount of tax paid that depends on their tax rate.|
|Tax elasticity||The elasticity of the real revenue from a tax with respect to the real tax base, for a given tax law.|
|Tax haven||A location, usually a country, where either rates of taxation or levels of enforcement are low, so that high taxes in other countries can be avoided by locating there.|
|Tax incidence||How the burden of a tax (or tariff) is distributed between buyers and sellers. A tax typically both raises the price to buyers and lowers it to sellers, by amounts that sum to the tax.|
|Tax inversion||A change in corporate nationality (the corporation's legal domicile) in order to take advantage of the new home's lower corporate tax rate.|
1. In general tax leakage is the difference between what the revenue from a tax would be if the taxed behavior did not change as a result of the tax, and what it actually is.
2. In an international context, tax leakage refers to losses of tax revenue due to reported behavior moving internationally, such as to a jurisdiction with a lower tax rate.
|Tax rebate||The refund of a tax that has been overpaid. Some countries rebate certain taxes that have been paid on goods that are then exported.|
|Tax reform||Restructuring of a country's tax system, most commonly to reduce marginal tax rates while increasing the size of the tax base by covering things that were previously exempt from tax.|
|Tax treaty||An agreement between two countries specifying how each will tax income (of labor, capital, etc.) earned in one by residents of the other, partly in order to avoid double taxation but also to provide for reporting of such income between the countries.|
|Tax-cum-subsidy||This phrase is used to indicate a policy that may be either a tax or a subsidy, depending on which will achieve the stated objective, which is usually to alter or set a relative price. The word "cum" here is Latin for "with," which is slightly inappropriate, since in this context what is usually meant is "or."|
|TBT||Technical barrier to trade|
|TCH||The Clearing House|
|Tea Act of 1773||The granting by the British government to the East India Company of the exclusive right to import tea into, and sell it in, the American colonies. It was one of several policies that led to the American Revolution.|
1.Trade by Enterprise Characteristics database
2.Transatlantic Economic Council
|Technical assistance||When this is part of help to countries provided by the IMF or World Bank, this may go beyond training and advice, and include insisting on institutional changes that countries may resist.|
|Technical barrier to trade||A technical regulation or other requirement (for testing, labeling, packaging, marketing, certification, etc.) applied to imports in a way that restricts trade. More generally called a standard, and the subject of the Tokyo Round Standards Code.|
|Technical change||Usually a synonym for technological progress.|
|Technical inefficiency||See X-efficiency.|
|Technical progress||Same as technological progress.|
|Technical regulation||A requirement of characteristics (such as dimensions, quality, performance, or safety) that a product must meet in order to be sold on a country's market. See standards.|
1. A specific method of production, using a particular combination of inputs.
2. With CRTS, a particular ratio of factors employed in production.
3. A point on an isoquant.
|Technique of analysis||A method used for displaying or manipulating economic models.|
|Technological change||A change in a production function that alters the relationship between inputs and outputs. Normally it is understood to be an improvement in technology, or technological progress, and it is of interest in international economics for its implications for trade and economic welfare.|
|Technological difference||A difference in production functions, usually for the same industry compared between two countries, such that one country has higher output for any given input than the other.|
|Technological progress||A technological change that increases output for any given input.|
1. The complete set of knowledge about how to produce in an economy at a point in time, including techniques of production that are available but not economically viable.
2. The set of production functions available to an economy.
3. Referring to industries that are experiencing, or recently have experienced, technological progress.
1. A time lag between the appearance of a new technology and its acquisition by a country.
2. The presence in a country of a technology that other countries do not have, so that it can produce and export a good whose cost might otherwise (if other countries had the same technology but different factor prices) be higher than abroad.
|Technology gap model||A model of trade that is driven by a technology gap that is of different importance for different industries, so that technologically advanced countries have comparative advantage in sectors where technology is most important. [Origin]|
|Technology intensive||Referring to an industry in which technology is advancing rapidly, and thus where successful operation requires heavy expenditure on R&D.|
|Technology spillover||Same as technology transfer, though usually not done intentionally by the transferor.|
|Technology transfer||The communication or transmission of a technology from one firm or country to another. This may be accomplished in a variety of ways, ranging from deliberate licensing to reverse engineering.|
|Temporary admission||Permission to import a good duty free for use as an input in producing for export. See drawback and export processing zone.|
|Temporary producer movement||A mode of supplying a traded service through the temporary movement of persons employed by the supplier into the buyer's country.|
|Temporary Trade Barriers Database||Maintained by the World Bank, this makes available data on trade remedies for 42 economies as of April 2020. It incorporates the Global Antidumping Database.|
|Tender||To offer a product for sale at a specified price, usually in response to a specific request from a potential purchaser. Government procurement, for example, that is not open to international tendering is a form of nontariff barrier.|
|Tequila Crisis||The economic and financial crisis that began in late 1994 when the Mexican peso devalued, causing disruption in the Mexican economy that then spread through other countries of Latin America. Peso crisis.|
|Term deposit||An amount held at a bank or other financial institution subject to a minimum time period, or term, before it can be withdrawn without penalty. Also called a time deposit.|
|Term structure of interest rates||Yield curve|
|Terms of trade||
1. Most commonly in economics, the relative price, on world markets, of a country's exports compared to its imports. Also called the net barter terms of trade and commodity terms of trade. See improve the terms of trade.* Introduced by Marshall (1923). [Origin]
2. Any of several other related concepts: gross barter terms of trade, income terms of trade, single factoral terms of trade, and double factoral terms of trade.
3. Outside of the economics of international trade, this expression often refers more broadly to the policies, facilities, and other arrangements that characterize the trade between one country or group of countries and another.
4. Unusually but rather common among economists of international money/macro/finance, some use not definition 1., but its reciprocal: the relative price of imports compared to exports. Thus in Obstfeld (1980): "... the terms of trade, defined as the price of foreign consumption goods in terms of home goods."
|Terms of trade argument||Same as the optimal tariff argument, which works by restricting the quantity of trade in order to improve the terms of trade.|
|Terms of trade controversy||Disagreement over the validity of the Prebisch-Singer Hypothesis.|
|Terms of trade deterioration||A decrease the relative price of exports compared to imports, or equivalently an increase in the relative price of imports compared to exports. Given the ambiguity in the definition of the terms of trade (see definitions 1. and 4.), this is clearer than a rise or fall. Contrasts with terms of trade improvement.|
|Terms of trade effect||The effect of a tariff on the terms of trade. By reducing the demand for imports, a tariff levied by a large country causes the prices of those imported goods to fall on the world market relative to the country's exports, improving its terms of trade.|
|Terms of trade improvement||An increase the relative price of exports compared to imports, or equivalently a decrease in the relative price of imports compared to exports. Given the ambiguity in the definition of the terms of trade (see definitions 1. and 4.), this is clearer than a rise or fall. Contrasts with terms of trade deterioration.|
|Tertiary sector||The portion of an economy producing services, in contrast to the primary sector and the secondary sector.|
|Tesobono||A Mexican government bond, denominated in pesos but with principal and interest indexed to US dollars, issued in the run-up to the Tequila Crisis to attract foreign funds. They then exacerbated the harm when the peso ultimately devalued.|
|TEU||Twenty-foot equivalent unit|
|Textbook Heckscher-Ohlin Model||The 2x2x2 model.|
|Textiles||Cloth. The textile sector is important for trade, along with apparel, because with some exceptions (synthetics) it is a very labor intensive sector, and it is therefore a likely source of comparative advantage for developing countries. See textiles and apparel.|
|Textiles and apparel||These largely labor intensive sectors are often the first manufactured exports of developing countries. Because of the threat to employment in developed countries, however, they have long been protected there. This has only recently changed under the WTO's ATC.|
|Textiles and Clothing Agreement||Agreement on Textiles and Clothing|
|TFP||Total factor productivity|
|TFPQ||Total factor productivity, quantity|
|TFPR||Total factor productivity, revenue|
|TFTA||Tripartite Free Trade Area|
|TFTEA||Trade Facilitation and Trade Enforcement Act|
1. Paul Krugman's suggested policy for responding to a foreign subsidy: send their embassy a thank-you note, on the grounds that one benefits from cheaper imports via the terms of trade. [Origin]
2. Krugman (2009) suggested this again as the US response if China were to sell dollars, as that it would improve US competitiveness and employment. (This is opposite of #1, presumably reflecting concern in 2009 with short-run weakness of US aggregate demand rather than longer-run effects of terms of trade.)
|The Clearing House||A "banking association and payments company that is owned by the largest commercial banks and dates back to 1853." It owns and operates the CHIPS international payments system.|
|Theoretical proposition||A property of an economic model that is derived (deduced) from its assumptions. It usually takes the form of a prediction about something that would be true if the world conformed to the model's assumptions, and perhaps also to additional assumptions specified in the proposition.|
|Theory of second best||See second best.|
|Think tank||An organization, usually nonprofit, that primarily engages in research and commentary.|
|Third best||Even further from optimal than second best.|
|Third World||Refers to all less developed countries as a group. Term was coined by Alfred Sauvy during the Cold War, when the first world was the developed capitalist countries and the second world was the communist countries, although those terms were seldom used. [Origin]|
1. The empirical regularity observed by Thirlwall (1979) that for many countries the rate of growth of output, gY, is approximated by the rate of growth of exports, gX, divided by the country's elasticity of demand for imports, ηM: gY = gX/ηM.
2. Equivalently, letting export growth be driven by foreign income growth, gY*, and the elasticity of (foreign) demand for exports, ηX, this equates the ratio of foreign and domestic growth rates to the ratio of the trade elasticities: gY/gY* = ηX/ηM. The latter was dubbed by Krugman (1989) the "45-degree rule."
|Three Seas Initiativve||A geopolitical joint project by Poland and Croatia to act as a forum for twelve European countries that border the Baltic, Adriatic and Black Seas.|
|Tied aid||Aid that is given under the condition that part or all of it must be used to purchase goods from the country providing the aid.|
|Tied loan||Loan that is given under the condition that part or all of it must be used to purchase goods from the country providing the loan.|
|Tiger economy||Any one of several economies that have developed extremely rapidly over a period of years. Especially the Four Tigers, but also a number of others who had growth spurts more recently. [Origin]|
|Tight money||A monetary policy that is contractionary, thus with high interest rates for borrowing. Contrasts with easy money.|
|TIM||Trade Integration Mechanism|
|Time deposit||Term deposit|
|Time inconsistency||The problem that arises when decision makers, especially policy makers, make plans for policy in the future that they know will not be preferred when the time to implement them arrives. Knowing this, others will not find the commitment to the first policy credible.|
|Time preference||The attachment of a higher weight in utility to consumption in the present compared to consumption in the future. A common formulation of utility from a time path of consumption c(t) would be U = ∫c(t)e−ρt, where ρ>0 is the rate of time preference.|
|Time series variation||The changes in an economic variable that occur over time for a given economic unit such as a consumer, firm, industry, or country. Often used to seek evidence of effects of macroeconomic and financial policies. Contrasts with cross sectional variation.|
|TIR Convention||A 1949 agreement that now (April 2020) includes 76 countries, providing for transport of goods by road across countries, with duties levied only on reaching their destination. (TIR stands for the French "Transports Internationaux Routiers" - International Road Transport.)|
|TISA||Trade in Services Agreement|
|Title VII||Title VII of the Omnibus Trade and Competitiveness Act of 1988 is a US law to monitor and enforce international agreements on government procurement as they affect US exporters.|
|TiVA||Trade in Value Added Database|
|TLC||Tratado de Libre Comercio (Spanish for Free Trade Agreement)|
|To market||See pricing to market.|
|Tobin tax||A small tax on international currency transactions, proposed by James Tobin in 1978 to discourage destabilizing short-term international capital movements. Advocates suggest a tax of 0.1-0.25% with revenue used for urgent global priorities. Others question enforceability.|
|Tobin's Q||The ratio of a firm's market value to the replacement cost of its assets. Used as a guide to investment. Due to Tobin (1969).|
|Tõgrõg||The main currency unit of Mongolia, also called tugrik.|
|Toman||The main currency unit of Iran as of May 2020, when it replaced the rial, one toman being equal to 10,000 rials.|
|Tokyo Round||The 7th round of multilateral trade negotiations that took place under GATT auspices, commencing 1973 and completed in 1979. This was the first trade round to deal with NTBs, by negotiating the Tokyo Round Codes.|
|Tokyo Round Codes||The plurilateral agreements negotiated in the Tokyo Round covering several NTBs, arising from customs valuation, standards, government procurement, etc. The WTO replaced most of these with agreements applying to all members, the only exceptions today being the agreements on civil aircraft and government procurement.|
|Torquay Round||The third (1950-51) of the trade rounds conducted under the auspices of the GATT, initiated at the town of Torquay, U.K.|
|TOT||Terms of trade|
|Total Aggregate Measurement of Support||Same as aggregate measurement of support.|
|Total Economy Database||A database maintained by the Conference Board "with annual data covering GDP, population, employment, hours, labor quality, capital services, labor productivity, and Total Factor Productivity for 123 countries in the world."|
|Total factor productivity||A measure of the output of an industry or economy relative to the size of all of its primary factor inputs. The term, and its acronym TFP, often refers to the growth of this measure, as measured by the Solow residual. See also Hicks neutral technical progress.|
|Total factor productivity, quantity||TFP as measured from firm quantity produced, which is the conceptually correct measure of TFP, but harder to observe than TFPR.|
|Total factor productivity, revenue||TFP as measured from firm revenue, which is imperfect if price is not constant.|
|Total product||The output of a firm or industry, as distinct from average product and marginal product.|
|Townshend Revenue Act||A tax on the imports of Britain's American colonies, proposed by British chancellor of the Exchequer Charles Townshend and enacted by Parliament in 1767. It was one of several policies that led to the American Revolution.|
|Toy model||This term is often used to describe a simplified version of a more complex model, the toy version being used to illustrate the essential mechanism(s) involved in the full model, where those mechanisms might be hidden within the complexity.|
|TPA||Trade Promotion Authority|
|TPRC||Trade Policy Research Centre|
|TPRM||Trade Policy Review Mechanism|
|Tracing||The principle, sometimes applied in rules of origin, that only the domestically-produced content of intermediate inputs can count as domestic in products that use them as inputs. Contrasts with roll-up, and requires greater effort to keep track of inputs.|
1. Capable of being traded among countries.
2. A good or service that is tradable; with tradables referring to an aggregate of such goods and services.
1. To exchange one item for another; one person or firm providing an item (good, service, asset, etc.) to another person or firm, with the latter providing a different item to the first in return, as payment.
2. To export and/or import.
3. The quantity or value of exports and/or imports.
|Trade Act of 1934||Reciprocal Trade Agreements Act of 1934.|
|Trade Act of 1962||Trade Expansion Act of 1962.|
|Trade Act of 1974||Trade Reform Act of 1974|
|Trade Act of 1979||Trade Agreements Act of 1979|
|Trade Act of 1988||Omnibus Trade and Competitiveness Act of 1988.|
|Trade adjustment assistance||A program of adjustment assistance for workers and firms in industries that have suffered from competition with imports. In the U.S., TAA began with the Trade Expansion Act of 1962, and it has been renewed and expanded since then, including as part of the NAFTA.|
|Trade agreement||A negotiated agreement among two or more countries to limit or alter their policies with respect to trade. A common type in recent years has been agreements to form preferential trading arrangements.|
|Trade Agreements Act of 1934||Reciprocal Trade Agreements Act of 1934|
|Trade Agreements Act of 1979||The legislation implementing the Tokyo Round agreement in the United States.|
|Trade Agreements Extension Act of 1951||In addition to extending the authority of the President to enter into trade agreements for an additional two years, this required suspension of any tariff concessions, including MFN status to the USSR and other Communist countries.|
|Trade Analysis Information System||A publicly available database on tariffs, non-tariff measures, and imports assembled and provided by UNCTAD and the World Bank.|
|Trade and Development Act of 2000||The first significant trade legislation passed by the U.S. Congress after the Trade Act of 1988, this renewed and extended AGOA and the CBI, and it included miscellaneous other trade measures such as requiring carousel retaliation.|
|Trade and investment||The interactions between, and the rules and policies governing, international trade and foreign direct investment. One of the Singapore Issues.|
|One of the most frequently used diagrams of trade theory, using a transformation curve together with one or more price lines and sometimes community indifference curves to illustrate production, consumption, and trade and the effects on them of tariffs and other exogenous changes.|
|Trade and Wages Debate||The debate between and among trade economists and labor economists as to the reason for the increase in the relative wages of skilled labor, compared to unskilled labor, in the U.S. starting in the 1980s. A central issue was the importance of "trade" as a contributing cause.|
|Trade as an engine of growth||See engine of growth.|
|Trade as the handmaiden of growth||See handmaiden of growth.|
|Trade balance||Balance of trade.|
|Trade balance ratio||The ratio of value of exports to value of imports. Equals one if trade balance is zero, greater than one if a surplus, and less than one if a deficit. Has the advantage of indicating how large a surplus or deficit is compared to imports, since R=X/M and B=X-M imply R-1=B/M.|
|Trade balancing mechanism||A policy that seeks to limit trade deficits (or increase surpluses) by using import licensing to limit total imports to the total value of exports. Introduced by Argentina in 2011.|
|Trade barrier||An artificial disincentive to export and/or import, such as a tariff, quota, or other NTB.|
|Trade bias||See bias of a trade regime.|
|Trade bloc||Trading bloc.|
|Trade by Enterprise Characteristics database||A collection of annual data on international trade "broken down by different categories of enterprises," provided by the OECD.|
|Trade collapse||See Great Trade Collapse.|
|Trade co-movement puzzle||The positive correlation between business cycles of countries that trade a lot with each other. This is a puzzle because it cannot be explained by modern conventional theories of the real business cycle, though it seems an obvious implication of early Keynesian models of foreign repercussions.|
A government official in charge of international trade.
2. The member of the European Commission responsible for the EU's common commercial policy and thus trade.
|Trade complementarity index||A measure of the extent to which one of two countries, j, exports what the other, k, imports. Defined as TCjk = 100 Σi( | mik xij | / 2 ), where xij is the share of good i in all exports of country j and mik is the share of good i in all imports of country k.|
|Trade concentration index||Any of several measures of the extent to which exports of a particular product or to a particular country come from only a small number of countries. May be a Herfindahl Index or another measure used for similar purposes in other areas of economic or statistical analysis.|
|Trade cost||Any cost incurred in order to engage in international trade, including transport cost, insurance, etc. May be fixed and/or variable.|
|Trade cost factor||A number that is multiplied by the quantity or price of a traded good to reflect the impact of a trade cost. E.g., if cost of trade is a percentage c, then the trade cost factor might be f=1+c, to scale up the price that must be paid or the quantity (if cost is iceberg) that must be shipped for one unit to arrive.|
|Trade cost puzzle||
1. The empirical finding, usually from gravity models, that bilateral trade declines with distance more rapidly than can be accounted for by the trade costs that are implicit in price differences across countries and locations.
2. The observation that the effect of distance, as measured by gravity models, has not declined over the last half century.
|Trade creation||Trade between members of a PTA that replaces what would have been production in the importing country were it not for the PTA. Associated with welfare improvement for the importing country since it reduces the cost of the imported good. Concept, and trade diversion, due to Viner (1950).|
1. An amount that is loaned to an exporter to be repaid when the exports are paid for by the foreign importer.
2. Credit extended by an exporter to an importer, permitting them to pay at some time after they take delivery.
|Trade defense measure||Any of several policies that permit tariffs or other trade restrictions to prevent or correct injury to domestic industry due to imports. Most common (and WTO-permitted) forms are safeguards, anti-dumping duties , and countervailing duties.|
|Trade deficit||Imports minus exports of goods and services. See deficit.|
1. Entry, into a low-tariff member of a free trade area, of imports intended for a purchaser in its higher-tariff partner. This is normally prevented by rules of origin. Term was introduced with this meaning by Shibata (1967). [Origin]
2. A change in the destination of exports in response to an increase in a trade barrier in another market, as when a rise in a tariff on an export from A to B causes the exports to be sold instead to C. Term was introduced with this meaning by Bown and Crowley (2007).
3. Internal trade deflection.
|Trade dependency||See dependency theory.|
|Trade dispute||Any disagreement between nations involving their international trade or trade policies. Today, most such disputes appear as cases before the WTO dispute settlement mechanism, but prior to the WTO, some were handled by the GATT while others were dealt with bilaterally, sometimes precipitating trade wars.|
|Trade distortion||A policy that alters the amount of trade, up or down, from what it would otherwise be. Agricultural subsidies, even if not based on quantity of exports, are trade distorting unless they are paid independently of whether and how much farmers produce.|
|Trade diversion||Trade that occurs between members of a PTA that replaces what would have been imports from a country outside the PTA. Associated with welfare reduction for the importing country since it increases the cost of the imported good. Concept, and trade creation, due to Viner (1950).|
|Trade effect of depreciation||The increase in exports and reduction in imports that occurs when a country's currency depreciates, its cheaper currency making its own goods cheaper relative to foreign goods.|
|Trade Expansion Act of 1962||The legislation authorizing US participation in the Kennedy Round, replacing the Reciprocal Trade Agreements Act of 1934. It also established Trade Adjustment Assistance.|
|Trade expenditure function||For an economy, this is the difference between its expenditure function and its revenue function: TE(P,V,U) = E(P,U) − R(P,V). Its partial derivatives, representing quantities demanded minus supplied due to Shephard's lemma, are therefore net imports.|
|Trade facilitation||One of the Singapore Issues, this refers in the Doha Declaration to "expediting the movement, release and clearance of goods, including goods in transit." This includes customs procedures and other practices that may add to the cost or time requirements of trade.|
|Trade Facilitation and Trade Enforcement Act||United States legislation passed in 2005 with the overall objective "to ensure a fair and competitive trade environment." It made a number of technical changes in the ways that the US deals with anti-dumping and countervailing duties, intellectual property issues, and duty drawbacks, among others.|
|Trade finance||The mechanisms by which firms that are engaged in trade cover their costs, including borrowing, forfaiting, export factoring, etc.|
|Trade flow||The quantity or value of a country's bilateral trade with another country.|
|Trade imbalance||A trade surplus or trade deficit.|
|Trade in services||The provision of a service to buyers within or from one country by a firm in or from another country. As such transactions did not involve a physical product crossing borders, they were not seen as "trade" and were not covered by GATT. In the mid-1980s they were recognized as a form of trade and were incorporated into the WTO's GATS.|
|Trade in Services Agreement||A proposed plurilateral agreement among a group of willing countries in the WTO, liberalizing trade in services. Negotiations were initiated by Australia and the United States in 2013. As of April 2020, the status of these negotiations is uncertain.|
|Trade in tasks||International fragmentation|
|Trade in value added||Value added trade|
|Trade in Value Added Database||Data collected by the OECD and WTO that captures "the value added by each country" of the world "in the production of goods and services that are consumed worldwide."|
|Trade indicator||A trade indicator can be any sort of data, or even an anecdote, that suggests how the volume or composition of trade compares across time or across countries. Trade indicators are published by the World Bank and the OECD, among others.|
|Trade indifference curve||In a diagram measuring quantities of exports and imports, a curve representing amounts of trade among which a freely trading country is indifferent, based on its community indifference curves and its transformation curve. Due to Meade (1952).|
|Trade integration||The process of increasing a country's participation in world markets through trade, accomplished by trade liberalization.|
|Trade Integration Mechanism||A policy introduced in 2004 by the IMF to make resources more "predictably available" to member countries meeting balance of payments problems due to multilateral trade liberalization.|
|Trade intensity index||For a group or bloc of countries, usually in a PTA, the ratio of the bloc's share of intra-bloc trade to the bloc's share in world trade. If greater than one, this is said to suggest that the bloc displays trade diversion. Index seems to be due to Frankel (1997).|
|Trade liberalization||Reduction of tariffs and removal or relaxation of NTBs.|
|Trade minister||The government official, at the ministerial or cabinet level, primarily responsible for issues of international trade policy; the minister of international trade. In the U.S., that is the USTR.|
|Trade ministry||The unit of government primarily responsible for issues of international trade policy and trade negotiations, headed by the trade minister. In the U.S., although trade policy is split across several units of government, trade negotiations are handled by the office of USTR.|
1. An office or other facility maintained in one country by the government of another to help residents of both to engage in international trade between them.
2. A group of persons representing business and government of a country that travels to another country to promote its exports.
|Trade model||An economic model that explains certain causes, effects, and/or characteristics of international trade.|
|Trade negotiation||A negotiation between pairs of governments, or among groups of governments, exchanging commitments to alter their trade policies, usually involving reductions in tariffs and sometimes nontariff barriers.|
|Trade openness||See openness.|
|Trade parity pricing||This refers to setting prices -- or allowing prices to be set by the market -- at levels determined by world prices. In countries such as India, where prices of certain products such as oil have been traditionally controlled by government, trade parity pricing may be a radical change for producers and consumers.|
|Trade pattern||What goods and services a country trades, with whom, and in what direction. Explaining this is a major purpose of trade theory, especially with regards to which goods a country exports and imports. This may be done directly, as the commodity pattern of trade, or indirectly as the factor content pattern of trade.|
|Trade policy||Any policy affecting international trade, but especially including especially tariffs and nontariff barriers.|
|Trade Policy Research Centre||A research organization that was active in the 1970s and 1980s, but no longer seems to exist, at least in that form. At its height it involved many important international economists and influenced trade policies and trade negotiations.|
|Trade Policy Review Mechanism||The periodic review of the trade policies and practices of the member countries of the WTO, conducted and published by the WTO. The review may, if appropriate, call for reform, but there is no immediate consequence of a determination that a member is out of compliance.|
|Trade preference||A policy of admitting imports from one or more countries at lower (perhaps zero) tariffs than apply to otherwise comparable imports from other countries. See preferences and Preferential Trading Arrangement.|
|Trade Promotion Authority||The name that began being used (as of 2000) for Fast Track.|
|Trade Reform Act of 1974||Actually signed on Jan. 3, 1975, this US law renewed and revised authority to negotiate trade agreements and also dealt with new issues including tariff preferences, unfair trade, the escape clause, and adjustment assistance, and it introduced fast track authority.|
|Trade regime||The rules and practices prevailing in a country's international trade relationships.|
|Trade remedy||Protection provided by any of the following: anti-dumping duties, countervailing duties, or safeguards protection.|
|Trade restriction||Any policy that reduces the amount of exports or imports, such as a tariff, quota, or other nontariff barrier.|
|Trade Restrictiveness Index||
The level of a uniform ad valorem tariff that would have the same overall effects as the actual tariff structure. If tariffs are unequal, it will be larger than an average of the tariffs.
2. A theoretically consistent index of the restrictiveness of trade policy -- both tariffs and NTBs -- developed by Anderson and Neary (1996).
|Trade round||A set of multilateral negotiations, held under the auspices of the GATT and WTO, in which countries exchange commitments to reduce tariffs and agree to extensions of the GATT rules. Most recent were the Kennedy, Tokyo, Uruguay, and Doha Rounds.|
|Trade sanction||Use of a trade policy as a sanction (definition 2), such as an embargo imposed against a country for violating human rights.|
|Trade secret||A piece of information, known to a firm but not to others, about its production or business practices. Unlike a patent, which discloses information but protects it for a limited time, a trade secret can be kept indefinitely. But the protection of secrets under both national laws and TRIPs, is much weaker.|
1. The portion of the economy that produces tradable goods, and thus exports and/or competes with imports.
2. The portion of the economy that actually engages in international trade, exporting and/or importing or providing trade services.
|Trade service||A service that is an input to an act of international trade. Examples include transportation to, from, or between ports; insurance; or the provision of trade credit.|
|Trade share||This can mean a variety of things, but most commonly it refers either to imports or exports as a percentage of GDP.|
|Trade SIFT||Systematic Integrated Framework for Trade Analysis|
|Trade surplus||Exports minus imports of goods and services, or balance of trade. See surplus.|
|Trade theory||The body of economic thought that seeks to explain why and how countries engage in international trade and the welfare implication of that trade, encompassing especially the Ricardian Model, the Heckscher-Ohlin Model, and the New Trade Theory.|
|Trade triangle||In the trade and transformation curve diagram, the right triangle formed by the world price line and the production and consumption points, the sides of which represent the quantities exported and imported.|
1. Generally, a period in which each of two countries alternate in further restricting trade from the other. More specifically, the process of tariffs and retaliation
2. Interpreted by Syropoulos (2002) as a non-cooperative Nash equilibrium in a tariff game, as introduced by Johnson (1953/54).
3. The Trump Trade War.
|Trade winds||The prevailing winds that blow from the east near the equator and were important for early commerce to the Americas.|
|Trade-related aspects of intellectual property rights||This was the term used for bringing intellectual property protection into the Uruguay Round of trade negotiations under the pretense that only trade-related aspects of the issue would be included. In practice, that did not constrain the coverage of the resulting TRIPs agreement.|
|Trade-related investment measure||Any policy applied to foreign direct investment that has an impact on international trade, such as an export requirement. The Uruguay Round included negotiations on TRIMs.|
|Trade-weighted average tariff||The average of a country's tariffs, weighted by value of imports. This is easily calculated as the ratio of total tariff revenue to total value of imports.|
|Trade-weighted exchange rate||The weighted average of a country's bilateral exchange rates using bilateral trade -- exports plus imports -- as weights. Also called an effective exchange rate.|
|Traded good||A good that is exported or imported or -- sometimes -- a good that could be exported or imported if it weren't for those pesky tariffs.|
|Traded/nontraded good price ratio||One definition of real exchange rate.|
|Trademark||A symbol and/or name representing a commercial enterprise, whose right to the exclusive use of that symbol is, along with patents and copyrights, one of the fundamental intellectual property rights that are the subject of the WTO TRIPS agreement.|
|Trading arrangement||An agreement between two or more countries concerning the rules under which trade among them will be conducted, either in a particular industry or more broadly.|
|Trading bloc||A group of countries that are somehow closely associated in international trade, usually in some sort of PTA.|
1. A firm that facilitates transactions between buyers and sellers, often in different countries. Trading companies may specialize in exports and/or imports, and they typically do not take ownership of goods, but rather take a commission from sellers.
2. "Trading Company" is also part of the names of many firms that may not satisfy definition 1.
|Trading partner||A trading partner of one country is any other country with which it trades. Sometimes restricted, not very rigorously, to countries with which it trades a lot, or countries in the same preferential trading arrangement.|
1. This term is used variously to describe a very poor country, a subsistence economy, a primitive agricultural economy, or a pre-industrial economy.
2. More formally, in a traditional economy, resources are allocated based on the historical roles of individuals and families, passed down across generations, and markets play little if any role.
|Tragedy of the Commons||The tendency of a publicly available resource to be overused, because individual users do not bear the full cost of their use, which is instead shared by everybody. This is a particular problem when a resource, such as an ocean fishery, is not in the jurisdiction of a single government. Term first used by Hardin (1968).|
|TRAINS||Trade Analysis Information System|
1. French for "slice," in finance it usually refers to the pieces of a security that has been divided into parts for sale to different parties.
2. In the IMF, each member can draw upon or borrow amounts that are set as 25% of its IMF quota, the first called the gold tranche and each subsequent one called a credit tranche.
|Trans-Atlantic Trade and Investment Partnership||A proposed preferential trading arrangement between the United States and the European Union, negotiations for which began in 2013. The website of USTR still, in April 2020 in its archives, treats these negotiations as ongoing, but the website of the European Commission says that the negotiations "ended without conclusion at the end of 2016."|
|Trans-Pacific Partnership||A preferential trading arrangement that was negotiated by the United States with 11 other countries of the Asia-Pacific region. Negotiations were completed October 5, 2015, but without it being ratified, US President Trump pulled out of it. In 2018, the eleven other parties to the agreement negotiated the CPTPP.|
|Trans-Pacific Strategic Economic Partnership Agreement||The "P4" agreement among four countries -- Brunei Darussalam, Chile, New Zealand and Singapore -- that provides a "framework on which relationships between the Parties can be strengthened." Began in 2002 with three countries, adding Brunei in 2005.|
1. On the foreign exchange and other financial markets, this includes broker's fees and/or the bid/ask spread.
2. Much more broadly, this can refer to any sort of cost associated with the exchange of goods or services, including information costs, legal fees, and other costs incurred in overcoming market imperfections.
|Transaction value||The actual price of a product, paid or payable, used for customs valuation purposes.|
|Transatlantic Economic Council||A political body in which the US and EU seek to cooperate to advance economic integration between the two.|
|Transfer paradox||A transfer that makes the recipient worse off (i.e., an immiserizing transfer) and/or that makes the donor better off.|
|Transfer payment||Payment made by the government or private sector of one country to another as a gift or aid, not as payment for any good or service nor as an obligation. Also called a unilateral transfer.|
|Transfer price||Literally this is the price charged on goods and services traded between subsidiaries of (often) a multinational) corporation. However, the term usually connotes setting prices to minimize taxes paid, in response to differences in corporate tax rates. Contrasts with arm's length price.|
|Transfer problem||Made famous in a debate between Keynes (1929a,b,c) and Ohlin (1929a,b), this is the question of whether a financial transfer from one country to another will cause, at an unchanged real exchange rate, an equal change in the countries' bilateral trade balance, thus effecting the transfer in real terms.|
|Transfer union||A group of countries that unite enough to use transfer payments from government to government as a regular means to serving countries' changing needs. The EU is not a transfer union, though some have suggested that it should become one; creation of the EFSF in 2010 was a step in that direction.|
|Transformation curve||Same as production possibility frontier. The name comes from the idea that, by devoting resources to producing one good instead of another, it is as though one good is being transformed into another.|
|Transit zone||A particular type of free trade zone where a port is provided by a coastal country for a neighbor that is landlocked or lacks port facilities. Goods may enter and leave the zone without being subject to the coastal country's customs procedures or paying its tariffs.|
|Transition||The process of converting from a centrally planned, non-market economy to a market economy. During that process, it is a transition economy.|
|Transition indicator||An index of the progress that a country has made in the process of transition, produced by the EBRD.|
|Translog function||The transcendental logarithmic production function, a flexible functional form due to Christensen et al. (1973). With output Y and inputs Xi, it takes the form ln Y = α0 + Σi αi ln Xi + 1/2 Σi Σj βij ln Xi ln Xj.|
|Translog gravity||A formulation of the relationship between bilateral trade flows and determinants such as trade costs and incomes, somewhat similar to the gravity equation, but derived from preferences specified with a translog function. Due to Novy (2013).|
|Transmission mechanism||See monetary transmission mechanism.|
1. Same as multinational corporation, though for some reason this term seems to be preferred by those who don't like them.
2. A corporation whose national identity is a matter of convenience only, and that will move its headquarters readily in response to incentives.
|Transparency||The clarity with which a regulation, policy, or institution can be understood and anticipated. Depends on openness, predictability, and comprehensibility. Lack of transparency can itself be an NTB.|
|Transparency International||A global NGO seeking to free the world from corruption.|
|Transplant||A factory located in a country other than the home country of its owner.|
|Transport cost||The cost of transporting a good, especially in international trade.|
|Transportation cost||Transport cost.|
1. The transfer of a cargo from one ship or other form of transport to another.
2. The routing of a shipment through an intermediate port that is neither the origin nor the destination, especially if in a different country than both.
3. Routing through a different country, as above, in order to conceal the true country of origin or in order to exploit a preferential tariff. See trade deflection.
|Travel and Tourism Competitiveness Index||A measure of country competitiveness in the area of travel and tourism, produced annually by the World Economic Forum.|
|Treasury bill||A short-term bond issued by a government, usually referring to those issued by the U.S. government. Considered to carry close to zero risk, countries other than the U.S. often hold a large portion of their international reserves in the form of U.S. treasury bills.|
|Treaty of Rome||The 1957 agreement among six countries of Western Europe to form the European Economic Community, which went into effect January 1, 1958.|
|Treaty of Utrecht||An early forerunner of the GATT, the Treaty of Utrecht of 1713 included, in its Navigation and Commerce Treaty between England and France, the first explicit use of the concept of Most Favored Nation. Though negotiated, it was rejected by the British parliament in order to preserve a PTA with Portugal.|
|Treaty of Westphalia||The treaty of 1648 that marked the end of the Thirty Years War and that marked the beginning of the modern nation-state -- that is, countries with sovereignty and independence as we know them today.|
|Treaty port||Any of several coastal cities, mostly in Asia, made open to international trade and to residence by foreigners, as a result of pressure from foreign powers.|
|Treaty shopping||Said to be an analogue of forum shopping, this has the difference that a firm establishes an operation of some sort within a country solely to take advantage of its more favorable tax treaty with a country where it is subject to tax.|
|Trend||The long-term movement of an economic variable, such as its average rate of increase or decrease over a sufficient number of years to encompass several business cycles.|
|TRI||Trade Restrictiveness Index|
1. Europe, North America, and East Asia.
2. The EU, the U.S., and Japan.
|Triadic patent||A triadic patent family is a set of patents filed with the EU, United States, and Japan on the same invention.|
|Triangle inequality||Simply that the length of one side of a triangle is less that the sum of the lengths of the other two sides. Alternatively, that the shortest distance between two points is a straight line. Sometimes cited unnecessarily in treatments of transport costs in trade.|
|Triangular arbitrage||Arbitrage among three currencies. For example (letting x/y be the currency x per unit of currency y exchange rate), if $/¥ > ($/£)(£/¥), then an arbitrager can profit by buying £ with $; buying ¥ with those £; and then selling those ¥ for $.|
1. A pattern of trade involving three countries, A, B, and C, in which A exports to B, B exports to C, and C exports to A. Provides a nice example of how bilateral trade can be unbalanced even while each country's overall trade balance is zero.
2. Term used specifically for the slave trade, in which ships often traversed one of several triangular routes. For example they might take slaves from Africa to the West Indies, sugar from the West Indies to New England, and rum from New England to Africa.
|Triffin's dilemma||A flaw in the dollar-based international monetary standard created by the IMF: To provide growing international reserves needed by other central banks with growing economies, the U.S. must run balance of payments deficits that undermine confidence in the dollar as a reserve asset. Due to testimony before Congress by Robert Triffin in 1960.|
|Trigger price||See minimum price system.|
|Trigger price mechanism||The system put in place for US imports of steel in 1978 to speed up investigations of dumping. If prices were to fall below the trigger price, an anti-dumping investigation would begin without a prior complaint from the industry. The system was suspended in 1980.|
1. Any choice among three options, the combination of which is unsatisfactory or contradictory.
2. Three desirable objectives, any two of which preclude the third.
3. The impossible trinity. [Origin]
|Trilemma of international finance||The impossible trinity.|
|Trilemma of the World Economy||The trilemma suggested by Rodrik (2007) in which any two of the following preclude the third: 1. deep economic integration; 2. national sovereignty; 3. democratic politics.|
|TRIMs||Trade-Related Investment Measures|
|Tripartite Agreement of 1936||An agreement by France, Great Britain, and the United States to stabilize exchange rates among their currencies after Britain and the US had left the Gold Standard.|
|Tripartite Free Trade Area||Launched June 10, 2015, this is intended to form a free trade area combining three already existing trade arrangements: SADC, EAC, and COMESA. Note that it does not include ECOWAS.|
|Triple transformation||The standards for successful aid for economic development advanced by Sachs (2005) in 1) agriculture, 2) health, and 3) connectivity.|
|TRIPs||Trade-Related Aspects of Intellectual Property Rights|
|TRIPs Agreement||The agreement negotiated in the Uruguay Round that incorporated issues of intellectual property into the WTO. It provides a set of minimum standards for intellectual property protection to which all but the poorest member countries of the WTO must conform.|
|Troika||Term used collectively for the three institutions -- European Commission, European Central Bank, and International Monetary Fund -- that together tried to deal with the European debt and financial crises that began with the first Greek crisis of 2010.|
|Trough||The point in a business cycle when an economic contraction reaches its lowest level before turning up. Contrasts with peak.|
|TRQ||Tariff rate quota|
A pause in a conflict, during which the combatants agree temporarily not to do further damage to each other.
2. In a trade war, a pause or delay of threatened tariff increases, usually while the warring parties negotiate a resolution to the conflict.
|Truman Doctrine||The policy initiated by President Truman in 1947 that the US would help all democratic countries that were threatened by authoritarian forces, providing political, military, and/or economic assistance.|
|Trump tariffs||The wave of increased tariffs placed on imports by US President Donald Trump, starting in 2018 with tariffs on steel and aluminum from multiple countries and then on multiple products from China.|
|Trump Trade War||The trade war that began with the Trump tariffs and the tariffs by other countries in retaliation.|
|Trust||An arrangement in which the stock of several companies is controlled by a single entity. When the companies compete and together constitute a significant market share, the trust has monopoly power. In most industrialized countries, such arrangements violate competition policies or anti-trust policy.|
|TSUS||Tariff Schedule of the United States, Annotated|
|TSUSA||Tariff Schedule of the United States, Annotated|
|TTBD||Temporary Trade Barriers Database|
|TTIP||Trans-Atlantic Trade and Investment Partnership|
|Tugrik||The main currency unit of Mongolia, also called Tõgrõg.|
|Tuna-dolphin case||Actually a pair of cases, resulting from the U.S. ban, under the Marine Mammal Protection Act, of imports of tuna from countries that did not effectively prohibit tuna fishers from killing dolphins by catching them together with tuna in large ("purse seine") nets. Cases filed under GATT in 1991 and 1994 led to panel decisions against the U.S.|
|Tunnel||See snake in the tunnel.|
|Twenty-foot equivalent unit||The standard unit of measurement for shipping containers, used to indicate carrying capacity of ships and handling capacity of shipping terminals. A standard 40-foot container (40x8x8 feet) is 2 TEUs.|
|Twin deficits||Refers to the government budget deficit and trade deficit of a country (in spite of the fact that, although they are related, they are far from being the same or even necessarily of the same sign).|
|Twin peaks||A characterization of an unequal distribution of country per-capita incomes in the world, where populations are concentrated in a large group of poor countries, a small group of rich countries, and few in between. Term was introduced by Quah (1996).|
|Two-cone equilibrium||A free-trade H-O equilibriumin which all goods cannot be produced in one country; instead there are two diversification cones. This, or multi-cone equilibrium, arises if country factor endowments differ sufficiently relative to industry factor intensities. Contrasts with one cone equilibrium.|
|Two-gap model||A model of economic development that focuses on two constraints: the need for savings to finance investment, and the need for foreign exchange to finance imports.|
|Two-ness||The property of simple versions of many trade models that they have two of everything: goods, factors, and countries especially. An important issue, addressed by Jones (1977) who coined the term, and by Jones and Scheinkman (1977) is the extent to which the results of these models depend on this two-ness.|
|Two-speed Europe||A configuration of the European Union in which some of the countries integrate more fully than others. The adoption of the euro by only some of the countries that were then in the EU was the major example of a two-speed Europe. More commonly, the term now refers to changes that would involve some countries pursuing greater political integration.|