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GDP-linked Bonds
In finance, a GDP-linked bond is a debt security or derivative security in which the authorized issuer (a country) promises to pay a return, in addition to amortization, that varies with the behavior of Gross Domestic Product (GDP). This type of security can be thought as a “stock on a country” in the sense that it has “equity-like” features. It pays more/less when the performance of the country is better/worse than expected. Nevertheless, it is substantially different from a stock because there are no ownership-rights over the country. GDP-linked bonds are a form of floating-rate bond with a coupon that is associated with the growth rate of a country, just as other floating-rate bonds are linked to interest rates, such as LIBOR or federal funds rate, or inflation rates, which is the case of inflation-indexed bonds. These securities can be issued to reference real GDP, nominal GDP or aspects of both. In some cases, however, these securities may not have any principal cl ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Debt Security
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than Stock, equities and Fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., Warrant (finance), equity warrants. Securities may be represented by a certificate or, more typically, they may be "non-certificated", that is in electronic (Dematerialization (securities), dematerialized) or "book entry only" form. Certificates may be ''bearer'', meaning they entitle the holder to rights under the security merely by holding the security, or ''registered'', meaning they enti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Bond (finance)
In finance, a bond is a type of security under which the issuer ( debtor) owes the holder ( creditor) a debt, and is obliged – depending on the terms – to repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time. The interest is usually payable at fixed intervals: semiannual, annual, and less often at other periods. Thus, a bond is a form of loan or IOU. Bonds provide the borrower with external funds to finance long-term investments or, in the case of government bonds, to finance current expenditure. Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in a company (i.e. they are owners), whereas bondholders have a creditor stake in a company (i.e. they are lenders). As creditors, bondholders have priority over stockholders. This means they will be repaid in advance of stockholders, but will rank behind s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Social Policy
Social policy is a plan or action of government or institutional agencies which aim to improve or reform society. Some professionals and universities consider social policy a subset of public policy, while other practitioners characterize social policy and public policy to be two separate, competing approaches for the same public interest (similar to MD and DO in healthcare), with social policy deemed more holistic than public policy. Whichever of these persuasions a university adheres to, social policy begins with the study of the welfare state and social services. It consists of guidelines, principles, legislation and associated activities that affect the living conditions conducive to human welfare, such as a person's quality of life. The Department of Social Policy at the London School of Economics defines social policy as "an interdisciplinary and applied subject concerned with the analysis of societies' responses to social need", which seeks to foster in its students a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Crises
A crisis ( : crises; : critical) is either any event or period that will (or might) lead to an unstable and dangerous situation affecting an individual, group, or all of society. Crises are negative changes in the human or environmental affairs, especially when they occur abruptly, with little or no warning. More loosely, a crisis is a testing time for an emergency. Etymology The English word ''crisis'' was borrowed from the Latin, which in turn was borrowed from the Greek ''krisis'' 'discrimination, decision, crisis'.''Oxford English Dictionary'', 1893''s.v.'' 'crisis'/ref> The noun is derived from the verb ''krinō'', which means 'distinguish, choose, decide'. In English, ''crisis'' was first used in a medical context, for the time in the development of a disease when a change indicates either recovery or death, that is, a turning-point. It was also used for a major change in the development of a disease. By the mid-seventeenth century, it took on the figurative meaning o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Emerging Markets
An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were in the past. The term "frontier market" is used for developing countries with smaller, riskier, or more illiquid capital markets than "emerging". As of 2006, the economies of China and India are considered to be the largest emerging markets. According to ''The Economist'', many people find the term outdated, but no new term has gained traction. Emerging market hedge fund capital reached a record new level in the first quarter of 2011 of $121 billion. The 10 largest emerging and developing economies by either nominal or PPP-adjusted GDP are 4 of the 5 BRICS countries (Brazil, Russia, India and China) along with Indonesia, Iran, South Korea, Mexico, Saudi Arabia, Taiwan and Turkey. When countries "graduate" from their emerging status, they ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Welfare
Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifically to social insurance programs which provide support only to those who have previously contributed (e.g. most pension systems), as opposed to ''social assistance'' programs which provide support on the basis of need alone (e.g. most disability benefits). The International Labour Organization defines social security as covering support for those in old age, support for the maintenance of children, medical treatment, parental and sick leave, unemployment and disability benefits, and support for sufferers of occupational injury. More broadly, welfare may also encompass efforts to provide a basic level of well-being through free or subsidized ''social services'' such as healthcare, education, infrastructure, vocational training, and publi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Institutions
Institutions are humanly devised structures of rules and norms that shape and constrain individual behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions and norms are all examples of institutions. Institutions vary in their level of formality and informality. Institutions are a principal object of study in social sciences such as political science, anthropology, economics, and sociology (the latter described by Émile Durkheim as the "science of institutions, their genesis and their functioning"). Primary or meta-institutions are institutions such as the family or money that are broad enough to encompass sets of related institutions. Institutions are also a central concern for law, the formal mechanism for political rule-making and enforcement. Historians study and document the founding, growth, decay and development of institutions as part of political, economic and cultural history. Def ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Policymakers
Policy is a deliberate system of guidelines to guide decisions and achieve rational outcomes. A policy is a statement of intent and is implemented as a procedure or protocol. Policies are generally adopted by a governance body within an organization. Policies can assist in both ''subjective'' and ''objective'' decision making. Policies used in subjective decision-making usually assist senior management with decisions that must be based on the relative merits of a number of factors, and as a result, are often hard to test objectively, e.g. work–life balance policy... Moreover, Governments and other institutions have policies in the form of laws, regulations, procedures, administrative actions, incentives and voluntary practices. Frequently, resource allocations mirror policy decisions. Policy is a blueprint of the organizational activities which are repetitive/routine in nature. In contrast, policies to assist in objective decision-making are usually operational in nature an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Automatic Stabilizers
In macroeconomics, automatic stabilizers are features of the structure of modern government budgets, particularly income taxes and welfare spending, that act to damp out fluctuations in real GDP. The size of the government budget deficit tends to increase when a country enters a recession, which tends to keep national income higher by maintaining aggregate demand. There may also be a multiplier effect. This effect happens automatically depending on GDP and household income, without any explicit policy action by the government, and acts to reduce the severity of recessions. Similarly, the budget deficit tends to decrease during booms, which pulls back on aggregate demand. Therefore, automatic stabilizers tend to reduce the size of the fluctuations in a country's GDP. Induced taxes Tax revenues generally depend on household income and the pace of economic activity. Household incomes fall and the economy slows down during a recession, and government tax revenues fall as well. This ch ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fixed Income
Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year and repay the principal amount on maturity. Fixed-income securities — more commonly known as bonds — can be contrasted with equity securities – often referred to as stocks and shares – that create no obligation to pay dividends or any other form of income. Bonds carry a level of legal protections for investors that equity securities do not — in the event of a bankruptcy, bond holders would be repaid after liquidation of assets, whereas shareholders with stock often receive nothing. For a company to grow its business, it often must raise money – for example, to finance an acquisition; buy equipment or land, or invest in new product development. The terms on which investors will finance the company will depend on the risk profile of the company ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Probability Of Default
Probability of default (PD) is a financial term describing the likelihood of a default over a particular time horizon. It provides an estimate of the likelihood that a borrower will be unable to meet its debt obligations. PD is used in a variety of credit analyses and risk management frameworks. Under Basel II, it is a key parameter used in the calculation of economic capital or regulatory capital for a banking institution. PD is closely linked to the expected loss, which is defined as the product of the PD, the loss given default (LGD) and the exposure at default (EAD). Overview The probability of default is an estimate of the likelihood that the default event will occur. It applies to a particular assessment horizon, usually one year. Credit scores, such as FICO for consumers or bond ratings from S&P, Fitch or Moodys for corporations or governments, typically imply a certain probability of default. For group of obligors sharing similar credit risk characteristics such as ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Countercyclical
Procyclical and countercyclical variables are variables that fluctuate in a way that is positively or negatively correlated with business cycle fluctuations in gross domestic product (GDP). The scope of the concept may differ between the context of macroeconomic theory and that of economic policy–making. The concept is often encountered in the context of a government's approach to spending and taxation. A 'procyclical fiscal policy' can be summarised simply as governments choosing to increase government spending and reduce taxes during an economic expansion, but reduce spending and increase taxes during a recession. A 'countercyclical' fiscal policy takes the opposite approach: reducing spending and raising taxes during a boom period, and increasing spending and cutting taxes during a recession. Business cycle theory Procyclical In business cycle theory and finance, any economic quantity that is positively correlated with the overall state of the economy is said to be procyc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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