National Bureau of Economic ResearchThe National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community". The NBER is known for providing start and end dates for recessions in the United States. Many chairpersons of the Council of Economic Advisers were previously NBER Research Associates, including the former NBER president and Harvard Professor, Martin Feldstein.
Shock (economics)In economics, a shock is an unexpected or unpredictable event that affects an economy, either positively or negatively. Technically, it is an unpredictable change in exogenous factors—that is, factors unexplained by an economic model—which may influence endogenous economic variables. The response of economic variables, such as GDP and employment, at the time of the shock and at subsequent times, is measured by an impulse response function. A technology shock is the kind resulting from a technological development that affects productivity.
Wall Street Crash of 1929The Wall Street Crash of 1929, also known as the Great Crash, the Crash of 29 was a major American stock market crash that occurred in the autumn of 1929. It started in September and ended in mid-November, when share prices on the New York Stock Exchange (NYSE) collapsed. The pivotal role of the 1920s' high-flying bull market and the subsequent catastrophic collapse of the NYSE in late 1929 is often highlighted in explanations of the causes of the worldwide Great Depression.
Discretionary policyIn macroeconomics, discretionary policy is an economic policy based on the ad hoc judgment of policymakers as opposed to policy set by predetermined rules. For instance, a central banker could make decisions on interest rates on a case-by-case basis instead of allowing a set rule, such as Friedman's k-percent rule, an inflation target following the Taylor rule, or a nominal income target to determine interest rates or the money supply. In practice, most policy actions are discretionary in nature.
Negative income taxIn economics, a negative income tax (NIT) is a system which reverses the direction in which tax is paid for incomes below a certain level; in other words, earners above that level pay money to the state while earners below it receive money, as shown by the blue arrows in the diagram. NIT was proposed by Juliet Rhys-Williams while working on the Beveridge Report in the early 1940s and popularized by Milton Friedman in the 1960s as a system in which the state makes payments to the poor when their income falls below a threshold, while taxing them on income above that threshold.
School choiceSchool choice is a term for education options that allow students and families to select alternatives to public schools. It is the subject of fierce debate in various state legislatures across the United States. The most common in the United States, by both the number of programs and by the number of participating students are scholarship tax credit programs, which allow individuals or corporations to receive tax credits toward their state taxes in exchange for donations made to non-profit organizations that grant private school scholarships.
Chicago BoysThe Chicago Boys were a group of Chilean economists prominent around the 1970s and 1980s, the majority of whom were educated at the Department of Economics of the University of Chicago under Milton Friedman and Arnold Harberger, or at its affiliate in the economics department at the Pontifical Catholic University of Chile. After they finished their studies and returned to Latin America, they adopted positions in numerous South American governments including, prominently, the military dictatorship of Chile (1973–1990), as economic advisors.
Taylor ruleThe Taylor rule is a monetary policy targeting rule. The rule was proposed in 1992 by American economist John B. Taylor for central banks to use to stabilize economic activity by appropriately setting short-term interest rates. The rule considers the federal funds rate, the price level and changes in real income. The Taylor rule computes the optimal federal funds rate based on the gap between the desired (targeted) inflation rate and the actual inflation rate; and the output gap between the actual and natural output level.
