Base Effect
A distortion in year-over-year data caused by an unusually high or low value in the prior-year comparison period.
Big Mac FX
The PPP-implied exchange rate derived from comparing Big Mac prices across countries.
Budget Deficit
A shortfall when a government's expenditures exceed its revenues in a given period, funded by borrowing.
Capital Account
The component of a country's balance of payments that records cross-border transfers of financial assets and capital.
Capital Flows
Cross-border movements of money for investment, trade finance, and business operations that influence exchange rates and economic activity.
Consumer Confidence
A measure of how optimistic households feel about the economy and their personal financial situations.
CPI Basket
The fixed representative sample of goods and services used to measure consumer price changes and calculate the CPI.
Durable Goods Orders
A monthly economic report measuring new orders for manufactured goods expected to last three or more years.
GDP Deflator
A price index that measures economy-wide inflation by comparing nominal GDP to real GDP across all goods and services.
GDP Growth
The percentage change in a country's gross domestic product over a given period.
GNP
The total value of goods and services produced by a country's residents worldwide, including income earned abroad.
Headline Inflation
The total CPI inflation rate that includes all goods and services, including the volatile food and energy components.
Helicopter Money
A policy in which a central bank creates money and distributes it directly to the public to stimulate spending.
Housing Starts
A monthly economic indicator measuring the number of new residential construction projects begun during the period.
Income Inequality
The uneven distribution of income across individuals or households in an economy, measured by indicators like the Gini coefficient.
Inflation
The general increase in the price level of goods and services in an economy over time, reducing purchasing power.
Interest Rate
The percentage charged by a lender for the use of money, or paid by a financial institution on deposits.
Inverted Yield Curve
A yield curve where short-term interest rates exceed long-term rates, historically a reliable recession predictor.
Lagging Indicators
Metrics that confirm economic trends after they have already begun, providing backward-looking validation of turning points.
Leading Indicators
Economic metrics that tend to change before the broader economy shifts, used to forecast upcoming recessions or expansions.
M1 and M2
The two main measures of the US money supply, capturing different degrees of liquidity from narrow (M1) to broad (M2).
Misery Index
The sum of the unemployment rate and the inflation rate — a simple gauge of economic hardship.
Modern Monetary Theory
A heterodox economic framework holding that currency-issuing governments face no financial constraint on spending, only an inflation constraint.
Monetarism
An economic theory holding that money supply growth is the primary determinant of inflation and nominal economic output.
Monetary Base
The total supply of money directly created by the central bank, including currency in circulation and bank reserves.
PCE Deflator
The Federal Reserve's preferred inflation measure, tracking price changes across personal consumption expenditures.
Potential GDP
The level of real GDP an economy can produce when operating at full employment without accelerating inflation.
PPP
An implied exchange rate based on the ratio of price levels between two countries.
Purchasing Power
The quantity of goods or services a unit of currency can buy, eroded by inflation and enhanced by deflation.
Real GDP
Gross domestic product adjusted for inflation, measuring the actual volume of goods and services produced.
Real Interest Rate
The nominal interest rate adjusted for inflation using the Fisher equation.
Real Return
An investment's return after subtracting the inflation rate.
Retail Sales
A monthly economic report measuring total consumer spending at retail stores, a key indicator of economic health.
Soft Landing
A central bank achieving inflation reduction through rate hikes without triggering a recession.
Yield Curve Slope
The spread between the 10-year and 2-year Treasury yields — a key recession indicator.