Homo economicus is a theoretical abstraction that some economists use to describe a rational human being.
In some neoclassical economic theories, people are portrayed as ideal decision makers with complete rationality, perfect access to information, and consistent, self-serving goals.
However, modern behavioral economists and those who study neuroeconomics have demonstrated that people are not really rational in making decisions.
The origins of homo economicus lie in an essay on political economy by the English civil servant, philosopher and political economist John Stuart Mill in 1836.
Rationality should dictate that a rational business person should use the profits from his business to lead a fairly frugal lifestyle, but this is not always the case.
Animal spirits come from the Latin spiritus animalis: “breath that awakens the human mind.” It was introduced by the British economist John Maynard Keynes in 1936.
Black Monday refers to the stock market crash that occurred on October 19, 1987, when the Dow Jones Industrial Average lost almost 22% in one day, causing the global stock market to crash.
Desperate workers are workers who have stopped looking for work because they did not find suitable employment options or were not shortlisted when applying for a job.
The causes of employee frustration are complex and varied.
An economist is an expert who studies the relationship between a society’s resources and its production or output, using a number of different indicators to predict future trends.
The possession effect describes the circumstances under which a person attaches a higher value to an object they already own than the value they would give to that same object if they did not own it.
Game theory is a theoretical framework for understanding social situations between competing players and ensuring optimal decision making by independent and competitive actors in a strategic setting.
The headline effect refers to the observation that negative news tends to have a proportionately greater impact on prices and markets than positive news.
The domestic market effect suggests that goods that have large economies of scale and high transport costs will tend to be produced and exported by countries with large domestic demand.
The Human Development Index (HDI) is a measurement system used by the United Nations to assess the level of individual human development in each country.
The January barometer is a market theory that says that returns in January predict returns for the rest of the year.
– It is popular with some traders and was first described in The Stock Trader’s Almanac in 1967.