| UN | United Nations |
| Uncertainty | Failure to know anything that may be relevant for an economic decision, such as future variables, details of a technology, or sales. In models, uncertainty usually appears as a random variable and corresponding probability density function. But in practice, most international models, especially of trade, assume certainty. |
| UNCITRAL | United Nations Commission on International Trade Law |
| Uncovered interest arbitrage | The act of borrowing one currency and lending another without using the forward market to protect against change in the exchange rate. Because of the risk of exchange-rate change, this can result in a loss and is therefore not truly a form of arbitrage. Sometimes called the carry trade. |
| Uncovered interest parity | Equality of expected returns on otherwise comparable financial assets denominated in two currencies, without any cover against exchange risk. Uncovered interest parity requires approximately that i = i* + a where i is the domestic interest rate, i* the foreign interest rate, and a the expected appreciation of foreign currency at an annualized percentage rate. |
| UNCTAD | United Nations Conference on Trade and Development |
| Under-invoicing | The provision of an invoice that states price as less than is actually being paid. This might be done on an import in order to reduce the amount that will be collected by an ad valorem tariff. Or it might be done on an export to reduce apparent profit and thus taxes. |
| Under-valued currency | The situation of a currency whose value on the exchange market is lower than is believed to be sustainable. This may be due to a pegged or managed rate that is below the market-clearing rate, or, under a floating rate, it may be due to speculative capital outflows. Contrasts with over-valued currency. |
| Underdeveloped country | A synonym, not usually used today, for less developed country. |
| Underemployment | The employment of workers for fewer hours or in less desirable jobs than they would prefer and are qualified for. |
| Undertaking | See price undertaking. |
| UNDP | United Nations Development Program |
| Unemployment | A measure of the number of workers that want to work but do not have jobs. |
| Unemployment rate | The ratio of unemployment to the labor force of a country. |
| Unequal exchange | Trade in which the labor used to produce a country's exports is more than the labor used to produce its imports, as in the exchange between low-wage developing countries and high-wage developed countries. |
| Unfair trade |
1. Under the GATT this refers only to exports that are subsidized or dumped
2. Under U.S. law, this also includes various actions that interfere with U.S. exports. See Section 301 and Super 301. 3. Also used to refer to almost any trade that the speaker objects to, sometimes including that based on low wages or weak regulations. |
| Unilateral transfer | Transfer payment. |
| Unit elastic | Having an elasticity equal to one. For a price elasticity of demand, this means that expenditure remains constant as price changes. For an income elasticity it means that expenditure share is constant. Homothetic preferences imply unit income elasticities. Contrasts with elastic and inelastic. |
| Unit isocost line | An isocost line along which cost is equal to one unit of the numeraire, such as one dollar. |
| Unit isoquant | The isoquant for a quantity equal to one unit of a good. The unit isoquant is useful for relating the price of a good to the prices of factors employed in its production. |
| Unit labor requirement | The amount of labor used per unit of output in an industry; the ratio of labor to output. In a Heckscher-Ohlin Model this varies along an isoquant as different techniques are chosen in response to different factor prices. But in a Ricardian model, these are the constant building blocks for defining comparative advantage and determining behavior. |
| Unit of account | A basic function of money, providing a unit of measurement for defining, recording, and comparing value. I.e., one dollar signifies not only a one dollar bill, but also a dollar's worth of money in other forms (deposits), of wealth in other forms than money, and of any good or service with a market value. |
| Unit tariff | Specific tariff. |
| Unit-value isoquant | The isoquant for a quantity of a good worth one unit of value. This is meaningful only if the nominal price of the good is given, for some specified currency or numeraire. Unit-value isoquants are central to the Lerner diagram for analyzing the Heckscher-Ohlin Model. |
| United Nations | An organization of countries established in 1945 with 51 members, expanded to 192 countries as of June 2007. Its purpose is "to preserve peace through international cooperation and collective security." |
| United Nations Commission on International Trade Law | A legal body created in 1966 to formulate and harmonize national rules on international commercial transactions. It includes 36 member states elected by the UN General Assembly, representing various geographic regions and economic and legal systems. It differs from the WTO in its more technical focus and its broad representation. |
| United Nations Conference on Trade and Development | An intergovernmental body established in 1964 within the United Nations, responsible for trade and development. Historically it has often been the international voice of developing countries. |
| United Nations Development Programme | The "development network" of the United Nations, operating in 166 countries (as of June 2007) "advocating for change and connecting countries to knowledge, experience and resources to help people build a better life." |
| United Nations Organizations | The complex and extensive system of organizations that exist under the umbrella of the United Nations. Several of these, like the WTO and the IMF, play critical roles in the international economy. |
| United States Court of International Trade | The U.S. court in which matters involving international trade are adjudicated. These include determinations of the customs service and findings of the ITC. |
| United States Customs Service | The agency of the U.S. government that monitors the border to prevent illegal goods from crossing it and to collect tariffs -- customs duties -- on legal goods that are subject to them. |
| United States Trade Representative | The cabinet-level official of the U.S. government "responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and leading or directing negotiations with other countries on such matters." |
| Unity | One. For example, "an elasticity greater than unity" means an elasticity (defined so as to be a positive number) greater than 1.00. |
| Unnatural trading bloc | A trading bloc among countries that are not natural trading partners. |
| Unregistered exports and imports | See registered exports and imports. |
| Unskilled labor | Labor with a low level of skill or human capital. Identified empirically as labor earning a low wage, with a low level of education, or in an occupational category associated with these; sometimes crudely proxied as production workers. |
| UPF | Utility possibility frontier |
| Upstream subsidization | Export of a good one of whose inputs has been subsidized. |
| Uruguay Round | The round of multilateral trade negotiations under the GATT that commenced in 1986 and was completed in 1994 with the creation of the WTO. In addition it broke new ground by negotiating over agriculture, textiles and apparel, services, and intellectual property. |
| US-Central American Free Trade Agreement. | A free trade agreement signed in 2004 between the United States, the Dominican Republic, and a number of countries in Central America. As of January 2006, the agreement had been ratified by all but Costa Rica. |
| USTR | United States Trade Representative |
| Utility function | A function that specifies the utility (well being) of a consumer for all combinations goods consumed (and sometimes other considerations). Represents both their welfare and their preferences. |
| Utility possibility frontier | In a diagram with levels of individual utility on the axes, a curve showing the maximum attainable levels of utility in a given situation, such as free trade or autarky. Used by Samuelson (1962) to demonstrate the gains from trade. |