Focuses on fundamental concepts, terminology, and frameworks related to international trade and trade wars, providing readers with clear, accessible explanations to support deeper understanding of key issues.
The International Monetary Fund (IMF) plays a central role in the global financial system. It monitors economic trends, offers policy advice, provides financial assistance, and delivers technical support to its member countries. With 190 member nations, the IMF functions as a global monetary cooperation institution, helping to ensure the stability of exchange rates and the broader international financial system.
The US Dollar Index, commonly referred to as the DXY, measures the value of the United States dollar relative to a basket of foreign currencies. It is widely used by economists, investors, and policymakers as a reference point to assess the dollar’s performance in global markets. The index is calculated based on a weighted geometric mean of six major world currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. Each of these currencies has a different weight, with the euro carrying the largest share due to its significant role in global trade.
Capital flight refers to the large-scale movement of financial assets or capital out of a country. This transfer typically occurs when investors lose confidence in a nation’s economic stability, currency value, or government policies. While capital can leave a country through legal channels such as foreign direct investment redirection or bank transfers, it can also move illicitly, through unreported transactions designed to bypass capital controls or tax obligations.
The Consumer Price Index (CPI) is one of the most relied-upon metrics for tracking inflation. It represents the average change in prices paid by urban consumers for a specific set of goods and services over time. These items range from food and housing to transportation, medical care, and recreation. The CPI is used not only by policymakers and central banks, but also by investors, businesses, and consumers to understand how inflation affects economic behavior and living costs.
The Purchasing Managers’ Index (PMI) is a key economic indicator that provides insights into the health of the manufacturing and services sectors. Published monthly, the PMI is based on surveys conducted with purchasing managers across industries. These surveys track metrics such as new orders, inventory levels, production, supplier deliveries, and employment. A PMI above 50 typically signals expansion in the sector, while a value below 50 indicates contraction.
Trade wars, marked by escalating tariffs and retaliatory measures, shape global economies and influence everyday life. Understanding the language and ideas behind these conflicts is essential for grasping their impact. This article provides a detailed glossary of key terms and concepts related to trade wars. Each entry explains the term, its relevance to trade wars, and its broader economic or political implications.
Inflation is a term that frequently surfaces in news, financial discussions, and casual conversations about the cost of living. For many, it’s a vague idea linked to rising prices, but its mechanics, causes, and consequences are both specific and far-reaching. This article provides a thorough explanation of what inflation is, how it’s measured, its causes, effects, historical context, and management strategies.
Gross Domestic Product, or GDP, measures the total value of goods and services produced within a country over a specific period. It serves as a key indicator of a nation’s economic health, reflecting the scale of economic activity and providing insight into whether an economy is growing, shrinking, or stagnating. For nontechnical audiences, GDP can be thought of as a scorecard that tallies up everything a country makes and sells, from cars and clothing to healthcare and haircuts. This article explains what GDP is, how it’s calculated, and the specifics of the United States’ GDP, including its size, components, and trends.
An economic recession is a period of declining economic activity that affects businesses, workers, and communities. It’s often characterized by reduced spending, lower production, and rising unemployment. While recessions can vary in length and severity, they typically disrupt the normal growth of an economy, leading to widespread financial challenges. This section explains what a recession is, how it’s identified, its causes, effects, and how economies recover.
Central banks and monetary policy play essential roles in shaping a country’s economy. They influence how money flows, how much it costs to borrow, and how stable prices remain. This section explains what central banks are, what they do, and how monetary policy works.
