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Equity premium puzzle: The equity premium puzzle is thought to be one of the most important outstanding questions in neoclassical economics. [6] It is founded on the basis that over the last one hundred years or so the average real return to stocks in the US has been substantially higher than that of bonds.
Economists Claudio Borio and Piti Disyatat of the Bank for International Settlements have argued that the Feldstein–Horioka puzzle arises due to mainstream economic modeling approaches which equate saving in real terms with financing in money terms. Using a framework in which the saving–investment nexus is distinct from money financing ...
Through a case study of Washington Mutual Bank (WaMu), the Report found that in 2006, WaMu began pursuing high risk loans to pursue higher profits. A year later, these mortgages began to fail, along with the mortgage-backed securities the bank offered.
An economic system, or economic order, [1] is a system of production, resource allocation and distribution of goods and services within a society. It includes the combination of the various institutions , agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community.
Several major U.S. economic variables had recovered from the 2007-2009 Subprime mortgage crisis and Great Recession by the 2013-2014 time period. The recession officially ended in the second quarter of 2009, [3] but the nation's economy continued to be described as in an "economic malaise" during the second quarter of 2011. [80]
There are various factors affecting economic growth. The problems of economic growth have been discussed by numerous growth models, including the Harrod-Domar model, the neoclassical growth models of Solow and Swan, and the Cambridge growth models of Kaldor and Joan Robinson. This part of the economic problem is studied in the economies of ...
Foundations of Real-World Economics: What Every Economics Student Needs to Know is a 2019 book by John Komlos [1] in which the author argues that the turbulence of the 21st century, including the Dot-Com bubble, the 2008 financial crisis, the rise of right-wing populism, covid-pandemic, and numerous wars, cannot be adequately understood with conventional 20th-century economic thinking.
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...