What's it? Capital flow restriction is controls that limit the ability of certain parties to invest or transfer their capital. Although this generally applies to foreign investment, the government can also restrict citizens from investing
Economic Context
Economic Development Explained: Stages, Goals & Impact
What's it? Economic development refers to an economy's progress in terms of quality. It's not just about economic growth. It also talks about a country's multidimensional aspects, such as increasing per capita income, improving education and health,
Structural Policy: Building a Stronger Economy – Goals, Examples, Impacts
What's it:Â Structural policies are government policies that influence the potential output and influence the private sector's choice to allocate economic resources. Long story short, it is an economic policy to influence long-run aggregate
Real Business Cycle Theory: Understanding Its Assumptions, Causes, Criticism
Real business cycle theory sheds light on the ups and downs of economies, focusing on how real-world changes trigger fluctuations. Unlike other theories that emphasize demand, the real business cycle perspective highlights how shifts in the supply
Closed Economy vs. Open Economy: Trade-Offs & Global Growth
What's it? A closed economy is one without transactions with other countries. Its growth relies on household consumption, business investment, and government spending.It is impossible to find countries that adopt a closed economy. Almost all
Brexit Explained: Impact on Economy, Trade & Investment
What's it:Â Brexit, short for "British Exit," marks the United Kingdom's historic decision to unwind its deep economic integration with the European Union. Triggered by a closely contested 2016 referendum, where a narrow 51.9% majority voted to
Deadweight Loss: How to Calculate, Example
What's it: Deadweight loss is the loss of surplus by producers or consumers because the market is in disequilibrium. These losses reduce the economic surplus (social welfare) because it is not captured by either party transacting in the market
Purchasing Power Parity Explained: Unveiling True Costs (Calculation, Pros, Cons)
What's it? Purchasing power parity (PPP) is an economic concept for equalizing the price of a set of identical items across different locations. In other words, these goods should be priced at the same level in various countries.The concept works
Employment: Indicators, Importance, Policies to Achieve Full Employment
What's it: Employment refers to the condition of having paid work, as in the Cambridge Dictionary. We also use it to refer to the number of people who have a job (Cambridge Dictionary) or the extent to which a labor force is
Fiat Money Explained: Pros, Cons; How It Works (End of Gold Standard?)
What's it: Fiat money is a currency with no intrinsic value but is a legal tender in an economy. An example of fiat money is paper money. The face value of fiat money is what you see, and it appears on the paper. Meanwhile, its real value is how
Ability-to-Pay Taxation Explained: Fair Share, Fair System – Examples, Pros, Cons
Ability-to-pay taxation is a cornerstone concept in modern tax policy. It argues that the amount of tax an individual or entity should pay should be based on their financial resources. This principle forms the foundation of progressive tax systems,
How to distinguish socialism from free markets
Economic system seeks to answer three fundamental questions in economics, namely:What goods will be produced?How will the goods be produced?For whom will the goods be produced?These three questions give rise to two poles of the economic