Economics

Economics

basics of economics

Contributors in Economics

Economics

When a firm's shares are held privately and not traded in the public markets. Private equity includes shares in both mature private companies and, as venture capital, in newly started businesses. As ...

Prisoners' dilemma

Economy; Economics

A favourite example in game theory, which shows why co-operation is difficult to achieve even when it is mutually beneficial. Two prisoners have been arrested for the same offence and are held in ...

Price/earnings ratio

Economy; Economics

A crude method of judging whether shares are cheap or expensive; the ratio of the market price of a share to the company's earnings (profit) per share. The higher the price/earnings (P/E) ratio, the ...

Price regulation

Economy; Economics

When prices of, say, a public utility are regulated, giving producers an incentive to maximise their profits by reducing their costs as much as possible. Contrast with rate of return regulation.

Deadweight loss

Economy; Economics

The extent to which the value and impact of a tax, tax relief or subsidy is reduced because of its side-effects. For instance, increasing the amount of tax levied on workers' pay will lead some ...

Ratings

Economy; Economics

A guide to the riskiness of a financial instrument provided by a ratings agency, such as Moody's, Standard and Poor's and Fitch IBCA. These measures of credit quality are mostly offered on marketable ...

Rate of return regulation

Economy; Economics

An approach to regulation often used for a public utility to stop it exploiting monopoly power. A public utility is forbidden to earn above a certain rate of return decided by the regulator. In ...