PIGOU EFFECT
A term in economics referring to the relationship between consumption, wealth, employment and output during periods of deflation. Defining wealth as the money supply divided by current price levels, the Pigou effect states that when there is deflation of prices, employment (and thus output) will be increased due to an increase in wealth (and thus consumption).
Alternatively, with the inflation of prices, employment and output will be decreased, due to a decrease in consumption.
Also known as the "real balance effect."
POPULAR TERMS
Piotroski Score
A discrete score between 0-9 which reflects nine criteria used to determine the strength of a firm's financial position. The Piotroski score is ...
Jitney
An illegal scheme where two brokers trade a stock back and forth in order to raise the trading volume and rack up commissions
An ...
Hedge
A strategy used to protect an investment against loss. A hedge often consists of taking an offsetting position in a related security, such as a fut ...
Preference Shares
These are company stocks with dividends that are paid to the shareholders before common stock dividends are paid out. In case the company goes bank ...
Channel Check
Independent stock analysis on a firm based on the information given to third parties. These are most frequently conducted through conversations or ...
POPULAR ARTICLE
SEE FOREX TUTORIAL
Macroeconomics: A Brief History
Macroeconomics is a branch of study under Economics that deals with the economy’s growth and the way it behaves. It examines nationwide pheno ...
Student Loans: Loan Repayment
Students, soon after your graduation, you need to enter the repayment phase. In other words, you have to start paying off your student loans. This ...
Buying a Home: Getting Pre-Approved for a Mortgage
You have determined the amount needed to buy the home of your dreams. Now, figure out the amount a bank can lend you. The rationale behind this is ...
Macroeconomics: Basic Concepts
The concepts involved in macroeconomics focus on three fields, including national output and income, unemployment, and inflation and deflation. The ...
Retirement Planning: Allocating Money for Retirement
In the previous tutorial, we outlined the significance of retirement. Now, let’s talk about the how in retirement planning.
“ ...
ECONOMIC CALENDAR
| Time | Country | Indices | Period |
|---|---|---|---|
| 05:02 | Trade Balance | Nov | |
| 07:00 | Economy Watchers Survey | Nov | |
| 09:00 | Industrial Production | Oct | |
| 10:00 | SECO Consumer Confidence | Nov | |
| 11:30 | Sentix Investor Confidence | Dec | |
| 01:50 | M2 Money Supply + CD | Nov | |
| 02:01 | BRC Retail Sales Monitor | Nov | |
| 02:30 | NAB Business Confidence | Nov | |
| 05:30 | RBA Interest Rate Decision | Dec |
