The money illusion claims that people tend to view their wealth and income in nominal dollar terms, rather than recognizing their real inflation-adjusted value.
Economists cite factors such as lack of financial education and price rigidity for many goods and services as contributing to the illusion of money.
It is sometimes said that employers take advantage of this by modestly raising wages in nominal terms without actually paying more in real terms.
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.