- B -

B20 Coalition "The B20 Coalition brings together leading independent business associations from G20 economies," and it "advocates on behalf of more than 6.7 million small, medium and large companies."
B3W Build Back Better World
BAA Buy American Act or Buy American Act of 1988.
BABAA Build America, Buy America Act
BACI A world trade database developed by CEPII, based on Comtrade.
Back office Refers to the activities of a firm that are necessary to its functioning but are not directly part of production, such as accounting. Such activities, despite the name that suggests a location behind the shop or shop floor, are increasingly done at remote locations, including in other countries, as business process outsourcing.
Backhaul problem An imbalance in transport flows between two locations, which is expected to cause the prices of transport in the two directions to differ.
Backus-Smith Puzzle The observation by Backus and Smith (1993) that correlations of consumption growth across countries are lower than correlations of output growth across countries, contrary to the theoretical prediction if international capital markets were complete. Related to the International Consumption Correlations Puzzle.
Backward bending Refers to a curve that reverses direction, usually if, after moving out away from an origin or axis, it then turns back toward it. The term is used most frequently to describe supply curves for which the quantity supplied declines as price rises above some point, as may happen in a labor supply curve, the supply curve for foreign exchange, or an offer curve.
Backward indexation The setting of wages based in part on past performance of prices.
Backward integration Acquisition by a firm of its suppliers.
Backward linkage The use by one firm or industry of produced inputs from another firm or industry.
BAFFLING PIGS and DUKS Acronyms for the 12 original members and non-members of the Euro Zone. BAFFLING PIGS = Belgium, Austria, Finland, France, Luxembourg, Ireland, Netherlands, Germany, Portugal, Italy, Greece, and Spain. DUKS = Denmark, United Kingdom, and Sweden.
Baht The main currency unit of Thailand. It is divided into 100 satang.
Bail-in With the same purpose as a bail-out, a bail-in writes off a portion of the borrower's debt, forcing its creditors to bear some of the cost. Term coined by The Economist (2010) in a guest article by Paul Calello.
Bail-out The provision, usually by a government, of funds to a firm or to another government in danger of insolvency so as to prevent it from defaulting on its debt.
Balance of indebtedness See net foreign asset position.
Balance of merchandise trade The value of a country's merchandise exports minus the value of its merchandise imports.
Balance of payments 1. A list, or accounting, of all of a country's international transactions for a given time period, usually one year. Payments into the country (receipts) are entered as positive numbers, called credits; payments out of the country (payments) are entered as negative numbers called debits.
2. A single number summarizing all of a country's international transactions: the balance of payments surplus.
Balance of payments adjustment mechanism Any process, especially any automatic one, by which a country with a payments imbalance moves toward balance of payments equilibrium. Under the gold standard, this was the specie flow mechanism.
Balance of payments argument for protection A common reason for restricting imports, especially under fixed exchange rates, when a country is losing international reserves due to a trade deficit. It can be said that this is a second best argument, since a devaluation could solve the problem without distorting the economy and thus at smaller economic cost.
Balance of payments deficit A negative balance of payments surplus.
Balance of payments equilibrium Meaningful only under a pegged exchange rate, this refers to equality of credits and debits in the balance of payments using the Bretton-Woods definition of the capital account. A surplus or deficit implied changing official reserves, so that something might ultimately have to change.
Balance of Payments Program A program of the US Department of Defense from the early 1960s to "provide a preference for U.S. products and services for overseas use," similar to the BAA which applies only within the US. Its purpose was to alleviate pressures on the US balance of payments. [Source]
Balance of payments surplus A summary number the state of a country's international transactions, usually equaling balance on current account plus the balance on financial account, but excluding official reserve transactions and perhaps also volatile short-term financial-account transactions. Indicates the stress on a regime of pegged exchange rates.
Balance of trade The value of a country's exports minus the value of its imports. Unless specified as the balance of merchandise trade, it normally incorporates trade in services, including earnings (interest, dividends, etc.) on financial assets. Term dates back to 1615. [Origin]
Balance on capital account A country's receipts minus payments for capital account transactions.
Balance on current account A country's receipts minus payments for current account transactions. Equals the balance of trade on goods and services, including interest and dividend income, plus net inflows of transfer payments.
Balance on financial account A country's receipts minus payments for financial account transactions.
Balanced budget 1. A government budget surplus that is zero, thus with net tax revenue equaling expenditure.
2. A balanced budget change in policy or behavior is one in which a component of the government budget, usually taxes, is adjusted as necessary to maintain a balanced budget.
Balanced growth Growth of an economy in which all aspects of it, especially factors of production, grow at the same rate.
Balanced trade 1. A balance of trade equal to zero.
2. The assumption that the balance of trade must be zero in equilibrium, as would be the case with a floating exchange rate and no capital flows. This is a standard assumption in real models of international trade, which exclude financial assets.
Balassa index See revealed comparative advantage.
Balassa-Samuelson effect The hypothesis that increase in productivity of tradables relative to nontradables, if more than abroad, will cause appreciation of the real exchange rate and thus the Penn Effect. Due to Balassa (1964), Samuelson (1964), and Harrod (1933), and thus also called the Harrod-Balassa-Samuelson Effect.
Baldwin envelope The consumption possibility frontier for a large country, constructed as the envelope formed by moving the foreign offer curve along the country's transformation curve. Due to Baldwin (1948).
Bali Ministerial The 9th ministerial meeting of the WTO held in Bali, Indonesia, December 3-7, 2013. It produced agreement on the Bali Package.
Bali Package The agreement at the Bali Ministerial dealing mainly with trade facilitation. This was the first multilateral agreement reached under the WTO.
Baltic countries Estonia, Latvia, and Lithuania
Baltic Dry Index An index of the rates charged for chartering large ships that transport coal, iron ore, and grain. It is regarded as a useful indicator of the current level of world trade.
Baltic Exchange A London-based organization of maritime industry firms. It handles and settles freight contracts and provides information on the ocean freight market. It dates back to 1823, when merchants and shipowners who gathered in the Virginia and Baltick Coffee House formed a committee to regulate their market.
Banana replublic A violent, poor, usually tropical country heavily dependent on a single crop such as bananas, and with a weak or unstable government that is strongly influenced by an international company that dominates the market for that crop. [Origin]
Banana war A trade dispute between the EU and the U.S. over EU preferences for bananas from former colonies. On behalf of U.S.-owned companies exporting bananas from South America and the Caribbean, the U.S. complained to the WTO, which ruled in favor of the U.S.
Bancor The international currency proposed by Keynes for use as the basis for the international monetary system that was being constructed at the end of World War II. Instead, the Bretton Woods System that emerged was based on the U.S. dollar. See also new bancor.
Bandung Conference This was a 1955 gathering in Bandung, Indonesia, of 29 non-aligned countries of Africa, Asia, and the Middle East "to condemn colonialism, decry racism and express their reservations about the growing Cold War between the United States and the Soviet Union." It initiated a movement for South-South Cooperation. [Source]
Bandung Principles A set of ten principles agreed at the Bandung Conference.
Bank for International Settlements An international organization that acts as a bank for central banks, fostering cooperation among them and with other agencies.
Bank rate The interest rate charged by a central bank to commercial banks for very short term loans; the discount rate.
Banking union The integration and centralization, across a group of countries, of bank regulation, oversight, and protection against bank runs and default. Since the Eurozone Debt Crisis, the European Union has taken steps, so far incomplete, to form a banking union.
Bankruptcy The legal process that a person or firm goes through if unable to pay their debts. The process seeks an orderly sharing of losses by creditors and a chance to start fresh for the debtor. No such process exists for national governments or countries, exacerbating the problems of debt crisis and financial crisis.
Banque Centrale des Etats de l'Afrique de l'Ouest The Central Bank of the West African States, located in Dakar, Senegal, and serving 8 member states of the West African Economic and Monetary Union: Benin, Burkina, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
Banque du Liban The central bank of Lebanon
Banque Ouest Africaine de Developpement The West African Development Bank, BOAD, serves as a development bank for Bénin, Burkina, Côte d'Ivoire, Guinée Bissau, Mali, Niger, Sénégal, and Togo.
Barbarous relic Term applied to the gold standard by John Maynard Keynes in Keynes (1924), p. 132.
Barcelona Process The Euro-Mediterranean Partnership.
Barrier 1. Any impediment to the international movement of goods, services, capital, or other factors of production. Most commonly a trade barrier.
2. An entry barrier.
Barro misery index See misery index.
Barter The exchange of goods for goods, without using money. One of several forms of countertrade.
Barter economy An economic model of international trade in which goods are exchanged for goods without the existence of money. Most theoretical trade models take this form in order to abstract from macroeconomic and monetary considerations.
Barter terms of trade Can refer to either the net barter terms of trade or the gross barter terms of trade, which are equal under balanced trade. Term was introduced by Taussig (1927). [Origin]
Bartik instrument An instrumental variable commonly used in labor economics, but also in other fields, including international economics. Prototypically, for estimating the effect of employment growth on local wages, it interacts the local industry employment share with the national industry growth rate. Due to Bartik (1991).
Base Erosion and Anti-Abuse Tax The BEAT provision of the Tax Cuts and Jobs Act that is meant to prevent the shifting of income to low-tax jurisdictions. [Source]
Base erosion and profit shifting As explained by the OECD, this "refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations." Together with the G-20, the OECD developed a "BEPS Package" of instruments to tackle these strategies.
Base money Monetary base.
Base year 1. The year used as the basis for comparison by a price index such as the CPI. The index for any year is the average of prices for that year compared to the base year; e.g., 110 means that prices are 10% higher than in the base year.
2. The base year is therefore also the year whose prices are used to value something in real terms or after adjusting for inflation.
Basel AML Index An independent annual ranking of countries "that assesses risks of money laundering and terrorist financing (ML/TF) around the world," produced by the Basil Institute on Governance.
Basel I The Basel Capital Accord
Basel II A substantially revised set of standards for capital adequacy of banks, with an agreed text first issued in June 2004.
Basel III A further revision of standards for capital adequacy of banks, effectively tripling the size of required capital reserves. Basel III was agreed by the Basel Committee in September 2010, with the new rules to be phased in from January 2013 to January 2019.
Basil Institute on Governance An "independent not-for-profit organisation dedicated to countering corruption and other financial crimes and to improving standards of governance." Begun 2003 and based in Basil, Switzerland.
Basel Capital Accord Also known at Basel I, this was an agreement in 1988 by the Basel Committee of central bankers to measure the credit risk of commercial banks and set minimum standards for bank capital in order to reduce the likelihood of international repercussions due to bank failures.
Basel Committee on Banking Supervision A committee of bank regulators, representing 27 countries plus the EU (as of February 2024), that acts as the primary standard setter for bank regulation.
Basic balance One of the more frequently used measures of the balance of payments surplus or deficit under pegged exchange rates, the basic balance was equal to the current account balance plus the balance of long-term capital flows.
Basic import price See minimum price system.
Basic needs See living wage.
Basis point One one-hundredth of a percentage point. Small changes in interest rates are commonly measured in basis points.
Basket See currency basket.
Bastable's test One of two conditions needed for infant industry protection to be welfare-improving, this requires that the protected industry be able to pay back an amount equal to the national losses during the period of protection. See also Mill's test. Due to Bastable (1899) and named by Kemp (1960). [Origin]
Battle of Seattle 1. The violence surrounding the Seattle Ministerial of the WTO.
2. The 2007 movie about the protests and disruption.
Batzen A subunit of the Swiss franc.
BCEAO Banque Centrale des Etats de l'Afrique de l'Ouest
BCG Boston Consulting Group
BdL Banque du Liban
BEA Bureau of Economic Analysis
Beachhead effect The idea that if costs of entering a market, such as through exports, become sunk costs, then a temporary change in market conditions such as an exchange rate can cause a lasting change in trade patterns. As one explanation for hysteresis in international trade, this was named by Baldwin (1988).
BEAT Based Erosion and Anti-Abuse Tax
Beef hormone case A trade dispute that began in 1989 when the EC banned imports of beef from cows that had been injected with growth hormones, arguing that the health effects of these hormones were suspect. The U.S. eventually complained under the WTO in 1996, arguing the absence of scientific evidence of any harm, and in 1997 the WTO panel agreed with the U.S.
Beggar thy neighbor For a country to use a policy for its own benefit that harms other countries. Examples are optimal tariffs and, in a recession, tariffs and/or devaluation to create employment. [Origin]
Behind the border barriers This refers to a variety of nontariff barriers that operate inside countries rather than at the border, but that nonetheless can restrict trade. Examples include technical barriers to trade, labeling requirements, and sanitary and phytosanitary regulations.
Beijing consensus 1. Term to contrast China's economic policies with the West's Washington Consensus. The term was first used by Ramo (2004) "to characterize China's experience, highlighting its emphasis on innovation and experimentation, sustainability and equality, and self-determination." [Source]
2. Since then the term has been used with a variety of meanings, and has sometimes been called the Beijing model or the China model. [Source]
Bell Trade Act Enacted by the US Congress in 1946, this specified economic conditions for Philippine independence from the US, including the exchange rate, access to resources, and trade barriers. Some of this was revised in the Laurel-Langley Agreement.
Bellagio Group A group "of academics and officials from G20 countries who meet annually for ... discussion of major international economic and financial issues." "First convened in the 1960s by Professor Fritz Machlup to brainstorm on the structure of the Bretton Woods System and what might follow," it met "at the historic Villa Serbelloni in Bellagio, Italy."
Below the line See above the line.
Belt and Road Initiative Initially called the 1 Belt, 1 Road initiative, this is a massive undertaking by the Chinese government to build infrastructure on land (the belt) and sea (the road) between China, other parts of Asia, Europe, and Africa. It was launched in 2013 by China's President Xi Jinping. [Origin]
Benefit-cost analysis Same as cost-benefit analysis.
Benelux 1. A word referring to a grouping of the three countries, Belgium, Netherlands, and Luxembourg. Claimed by The Economist (May 3, 2008) to have been coined in August 1946 by its Belgian correspondent.
2. The economic union of the three Benelux countries, initially a customs union, later an economic union, and now part of the European Union.
Benign neglect 1. Refers to doing nothing about a problem, in the hope that it will not be serious or will be solved by others.
2. Said to be U.S. policy toward its balance of payments deficit in the late 1960s, based on other countries' need for dollar reserves. [Origin]
BEPS Base erosion and profit shifting
Bergsonian social welfare function A social welfare function that takes as arguments only the levels of utility of the individuals in society. Due to Bergson (1938) as interpreted by Samuelson (1981). Also called a Bergson-Samuelson social welfare function.
Berne Convention The Berne Convention for the Protection of Literary and Artistic Works requires that signatory countries provide national treatment in the protection of copyrights. See also the Universal Copyright Convention.
Berry Amendment Enacted in 1941, the Berry Amendment requires the US Department of Defense to buy certain items, including clothing and food for troops, only if "grown, reprocessed, reused, or produced" in the US. [Source]
Bertrand competition The assumption, sometimes assumed to be made by firms in an oligopoly, that other firms hold their prices constant as they themselves change behavior. Contrasts with Cournot competition. Both are used in models of international oligopoly, but Cournot competition is used more often.
Best Countries Ranking A survey-based ranking of countries introduced by U. S. News "based on how global perceptions define countries in terms of a number of qualitative characteristics, impressions that have the potential to drive trade, travel and investment and directly affect national economies."
Better Factories Cambodia A program of the International Labor Organization begun in 2001 to improve working conditions in Cambodian factories producing garments for export. It grew out of a trade agreement between Cambodia and the United States, which promised to permit greater imports from Cambodia in return for improved working conditions.
Better Life Index An index of quality of life in 36 country members of the OECD, based on 11 measures of aspects "identified as essential, in the areas of material living conditions and quality of life."
BFA Boao Forum for Asia
Bhagwati coinage A term coined by trade economist Jagdish Bhagwati.
Bias 1. Bias of technology, either change or difference, refers to a shift toward or away from use of a factor. The exact meaning depends on the definition of "neutral" used to define absence of bias. Factor bias matters for the effects of technological progress on trade and welfare.
2. Bias of a trade regime refers to whether the structure of protection favors importables or exportables, based on comparing their effective rates of protection. If these are equal, the trade regime is said to be neutral.
3. Bias of growth refers to economic growth through factor accumulation and/or technological progress and whether it favors one sector or another. Growth is said to be export biased if the export sector expands faster than the rest of the economy, import biased if the import-competing sector does so.
Biased growth See bias.
Metzler Condition
In the elasticities approach to analyzing effects of exchange rates, the condition for a depreciation to have a positive effect on the trade balance: [ηX ηM (1 + εX + εM) – εX εM (1 – ηX  –  ηM)] / [(εX + ηX)(εM + ηM)] > 0, where εI (ηI) is the supply (demand) elasticity of I=X,M, exports and imports respectively. If supply elasticities are infinite, it reduces to the Marshall-Lerner Condition. Due to Bickerdike (1920), Robinson (1947), and Metzler (1948).
Bicycle Theory With regard to the process of multilateral trade liberalization, the theory that if it ceases to move forward (i.e., achieve further liberalization), then it will collapse (i.e., past liberalization will be reversed). The idea was suggested by Bergsten (1975) and named by him in Bergsten and Cline (1982, p. 71), if not before.
BID Banco Interamericano de Desarrollo (Spanish for Inter-American Development Bank)
Bid/ask spread The difference between the price that a buyer must pay on a market and the price that a seller will receive for the same thing. The difference covers the cost of, and provides profit for, the broker or other intermediary, such as a bank on the foreign exchange market.
Big Bang 1. British Big Bang of 1986.
2. Japanese Big Bang of 1996.
Big Mac Index An index of PPP exchange rates based solely on the prices of the Big Mac sandwich in McDonald's restaurants around the world, published regularly (recently twice a year) by The Economist.
Bilateral Between two countries, in contrast to plurilateral and multilateral.
Bilateral agreement An agreement between two countries, as opposed to a multilateral or plurilateral agreement.
Bilateral aid Aid from a single donor country to a single recipient country, in contrast to multilateral aid.
Bilateral cumulation In an FTA, biilateral cumulation allows only imports from FTA members to qualify under the rules of origin.
Bilateral exchange rate The exchange rate between two countries' currencies, defined as the number of units of either currency needed to purchase one unit of the other.
Bilateral investment treaty An agreement between two countries on how their countries will deal with foreign direct investment between them. BITs typically give investors in the host country certain rights, so as to encourage investment.
Bilateral quota An import (or export) quota applied to trade with a single trading partner, specifying the amount of a good that can be imported from (or exported to) that single country only.
Bilateral trade The trade between two countries; that is, the value or quantity of one country's exports to the other, or the sum of exports and imports between them.
Bilateral trade balance The value of a country's exports to a single other country, minus the value of its imports from that country. While data on bilateral trade imbalances are often reported, economists discount them as essentially meaningless, due to the potential for triangular trade.
Bilateral transfer A transfer payment from one country to another.
Bill and Melinda Gates Foundation Founded by Bill and Melinda Gates in 2000 with the fortune from Microsoft, this charitable foundation has contributed to many causes, but it is best known for its work fighting desease especially in children in poor countries.
Bill of exchange 1. A document demanding or promising payment.
2. "A bill of exchange is a written order used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date." [Source]
Bill of lading The receipt given by a transportation company to an exporter when the former accepts goods for transport. It includes the contract specifying what transport service will be provided and the limits of liability.
Billion Prices Project A project at the Massachusetts Institute of Technology to collect prices from online retailers around the world so as to monitor inflation across countries and time.
Bimetallism The definition of a currency's value in terms of two metals -- usually gold and silver -- at the same time. The issuer of the currency promises to exchange it for either a certain amount of one metal or for a certain (different) amount of the other. Used by most countries (except the UK) through most of the 19th century.
Binding 1. As an adjective, this refers to a restriction that is met exactly, and is therefore having an effect on behavior, in contrast to nonbinding.
2. As a noun, see tariff binding.
Binding overhang The extent to which a country's tariff binding exceeds its applied rate.
Biopiracy "The ... appropriation or commercial exploitation of biological materials ... that are native to a particular country or territory without providing fair financial compensation to the [native] people or government." Examples include the patenting of traditional knowledge by MNCs. [Source]
Bioterrorism Preparedness Act US legislation of 2002 under which "all foreign and domestic facilities (excluding farms) that manufacture, process, and handle food are required to register with the FDA, and the FDA must be given advance notice (at least a few hours) of imported food shipments." [Source]
Bipartisan Congressional Trade Priorities and Accountability Act of 2015 Signed into law June 29, 2015 by President Obama, this re-established Trade Promotion Authority through July 1, 2021. [Source]
Birdcage phenomenon Refers to the fact that tariff cuts prompt strong objection from those who will be hurt but little support from those who will benefit. [Origin]
BIS 1. Bank for International Settlements
2. Bureau of Industry and Security
BIT Bilateral investment treaty
Black Death The pandemic of Bubonic Plague that spread through Asia and then Europe in the mid-1300s. It was spread by trade along the Silk Road and put an end to the early period of globalization that was made possible by the Pax Mongolica. [Source]
Black list The list of "high-risk jurisdictions" with "serious strategic deficiencies to counter money laundering, terrorist financing, and financing of proliferation," maintained by the Financial Action Task Force.
Black market An illegal market, in which something is bought and sold outside of official government-sanctioned channels. Black markets tend to arise when government tries to fix a price without itself providing all of the necessary supply or demand. Black markets in foreign exchange almost always exist when there are exchange controls.
Black-market Used as an adjective, this is either just the price on the black market or a synonym for "true," on the grounds that black market prices reflect supply and demand without government intervention.
Black Sea Economic Cooperation A group of eleven countries, formed in 1992, with the objective of fostering "interaction and harmony" among the members through political and economic cooperation.
Black Star Line A steamship corporation established in 1919 by Marcus Garvey, leader of the United Negro Improvement Association, whose "goal was to create a line financed by Black investment in order to transport goods produced by Black-owned businesses to and from Africa." It never succeeded. [Source]
Black Tariff of 1842 In response to the low and falling tariffs of the Compromise Tariff of 1833, this act of 1842 substantially raised tariffs, but only until 1846 and the Walker Tariff. The name "Black" seems to have been given it by opponents.
Black Wednesday The day, September 16 1992, that the Bank of England was forced to withdraw from the Exchange Rate Mechanism because of speculation against the pound that drained its reserves. It is said that financier George Soros profited £1 billion from the episode.
Blair House Accord An agreement on agricultural subsidies between US and EC negotiators in November 1992 that broke an impasse in the Uruguay Round negotiations. It set "a limitation on EU farmland that could be planted with soybeans" and amended the Dunkel Draft on the issue of subsidies. [Source]
Bloc See trading bloc.
Blockade A militarily enforced interference with a country's trade, usually by naval forces preventing access to its ports.
Blood diamonds Also called conflict diamonds these are diamonds the mining and marketing of which have been used to finance, or have otherwise contributed to, civil war. In an effort to undermine this market, the Kimberly Process requires participants to certify that shipments of diamonds are conflict free. [Origin]
Bloomberg A news and information service that provides business news to the public and extensive, specialized data to subscribers.
Bloomberg Healthiest Country Index A ranking of countries by the health of their populations, produced for subscribers by Bloomberg Professional Service, but with rankings reported publicly.
BLS Bureau of Labor Statistics
Blue box A special category of subsidies permitted under the WTO Agriculture Agreement, it includes payments that are linked to production but with provisions to limit production through production quotas or requirements to set aside land from production. See box.
Blue Dot Network Launched by the United States, Japan, and Australia in 2019. the "Blue Dot Network is a mechanism to certify infrastructure projects that meet robust international quality standards."
BM Banco Mundial (Spanish for World Bank)
BOAD Banque Ouest Africaine de Developpement
Boao Forum for Asia "A nongovernmental and nonprofit international organization which has become a platform for dialogs among leaders of national governments, industrial and business circles, and academic circles ... about the important issues in Asia and the world." Its meetings are sometimes called the Davos of Asia. [Source]
Board of Economic Warfare Created by President Roosevelt during World War II, this initially had control over US exports and then a measure of control of imports as well. [Source]
Boeing-Airbus dispute A trade dispute between the US and EU, concerning subsidies that each alleges the other provides to its large aircraft manufacturer.
Bogor Goals The objectives agreed upon at a 1994 meeting of APEC leaders in Bogor, Indonesia. These included "free and open trade and investment by 2010 for industrialized economies and by 2020 for developing economies."
Bolsa Familia The world's best known conditional cash transfer program, implemented in Brazil under President Lula da Silva in 2003 and continuing until the end of 2021 when it was replaced by the Bolsonaro government with another program. [Source]
Bond A debt instrument, issued by a borrower and promising specified payments to the holder, usually regular interest payments plus a final repayment of principal. Bonds are exchanged on open markets including, in the absence of capital controls, internationally, providing a mechanism for international capital mobility.
Bond market The market for bonds, in which the prices of the bonds, and therefore the corresponding interest rates, are determined by the interaction of buyers and sellers.
Bonded warehouse See foreign trade zone.
Boom-bust cycle A pattern of performance over time in an economy or an industry that alternates between extremes of rapid growth (booms) and extremes of slow growth or decline (busts), as opposed to sustained steady growth. For an economy, this indicates an extreme form of the business cycle.
BOP Balance of payments.
Border adjustment tax 1. Border carbon adjustment
2. A feature of a proposed (but not yet adopted) tax plan in the US, the "destination-based cash flow tax," which would "include border adjustments that exempt exports but include imports in tax bills." [Source]
Border carbon adjustment Carbon tariff
Border effect A discontinuity that exists in prices or in quantities of trade at the border between countries. If the price of a good is higher on one side of a border than the other, this is a border effect. If a gravity equation includes a significant dummy for trade across a border, that also indicates a border effect.
Border measure Border protection
Border price The price of a good at a country's border.
Border protection 1. In the context of trade policy, this refers to policies such as tariffs and quotas that enhance profits and employment in a domestic industry, as opposed to other policies such as production subsidies that might have similar effects without restricting trade.
2. Measures to prevent unwanted entry across a nation's border of illegal or harmful goods or people.
Border puzzle The finding of McCallum (1995) that 1988 trade between provinces of Canada was many times larger than trade between otherwise comparable provinces and US states, even though observable international trade costs were too small to account for this.
Border tax adjustment Rebate of indirect taxes on exported goods, and levying of them on imported goods. May distort trade when tax rates differ or when adjustment does not match the tax paid.
Border Trade Alliance A "grassroots network of over 4.2 million public and private sector representatives, including" a long list of public and private individuals and institutions. It calls itself the "premier authority on issues affecting the U.S. northern and southern borders."
Borderless world The concept that national borders no longer matter, perhaps for some specified purpose.
Borrowing The amount that an entity, usually a country or its government, has borrowed. Thus often the national debt or the (negative of the) net foreign asset position.
Boston Consulting Group A consulting firm that also sometimes acts as an NGO or a think tank, as in its production of the Sustainable Economic Development Assessment and e-Friction Index.
BOT 1. Balance of trade
2. Build-operate-transfer
Bound rate See tariff binding.
Bound tariff See tariff binding.
Bounty Subsidy
Bovine Meat Agreement See International Bovine Meat Agreement.
Bowed Curved. "Bowed out" is used to describe a typical transformation curve, which is concave to the origin. In contrast, a transformation curve reflecting increasing returns to scale might be "bowed in" toward the origin.
Box Used with a color, a category of subsidies based on status in WTO: red=forbidden; amber, orange, or yellow=go slow (i.e., reduce the subsidy) and thus actionable; green=permitted; and blue=subsidies tied to production limits. Terminology seems to be used primarily in agriculture, where there is no red box.
Box diagram The Edgeworth Box.
Boycott To protest by refusing to purchase from someone, or otherwise do business with them. In international trade, a boycott most often takes the form of refusal to import a country's goods. A primary boycott limits trade with the target; a secondary boycott limits trade with those that trade with the target.
BP-Curve In the Mundell-Fleming model, the curve showing balance of payments equilibrium. It normally slopes upward because a rise in income raises imports while a rise in interest rate raises capital inflows. The curve is used under pegged exchange rates for effects on the balance of payments and under floating rates for effects on the exchange rate.
BPO Business process outsourcing
Brady Plan A US response in 1989 to the Latin American Debt Crisis that had begun much earlier. Creditors were encouraged to negotiate debt relief in exchange for forms of debt -- Brady Bonds -- that would be more highly tradable, and debtors were required to initiate some economic reform.
Brain drain The migration of skilled workers out of a country. First applied to the migration of British-trained scientists, physicians, and university teachers in the early 1960's, mostly to the United States. [Origin]
Brain waste The failure to employ skilled and educated immigrants in jobs that make full use of their skills or education.
Branch plant economy An economy that relies heavily on branch plants, i.e., production subsidiaries, of foreign companies, and therefore on foreign-owned capital and technology.
Brazilian Business Coalition The CEB is "Companies and business entities gathered for the purpose of monitoring and influencing trade agreement negotiations."
Brecher-Alejandro Proposition The proposition, proved in Brecher and Alejandro (1977), that foreign capital inflows with full repatriation of earnings must be immizerizing.
Bretton Woods A town in New Hampshire at which a July 1944 conference of 44 countries launched the IMF and the World Bank. These, along with the GATT/WTO became known as the Bretton Woods Institutions, and together they comprise the Bretton Woods System.
Bretton Woods exchange rate system This system formalized at Bretton Woods in which countries would peg their currencies to the U.S. dollar (or to another that was so-pegged), get help from the IMF in managing their exchange market intervention, and devalue only under specified circumstances.
Bretton Woods II 1. Name given to the period of ten years or so when China pegged its currency to the US dollar, and other Asian countries pegged close to the Chinese yuan. This ended in 2005 when, under pressure from the United States and others, China let its currency appreciate.
2. More broadly, the term has been used for the decades of dollar dominance and floating exchange rates after the original Bretton Woods system broke down in 1971, but countries continued to hold and acculate dollar reserves.
Brexit The exit of the United Kingdom from the European Union. Result of a referendum June 23, 2016, the UK invoked Article 50 of the EU treaty on March 29, 2017. After delays, exit occurred January 31, 2020, but UK remained in the EU customs union and subject to EU rules until December 31, 2020 when a new trade deal, agreed only a week before that date, went into effect.
BRI Belt and Road Initiative
Bribe A payment made to person, often a government official such as a customs officer, to induce favorable treatment.
BRICs Acronym for four large low-income countries -- Brazil, Russia, India, and China -- that were growing rapidly in the early years of the 21st century. Term was coined by O'Neill (2001). Sometimes expanded to BRICIs to include Indonesia or BRICS to include South Africa.
BRICS Development Bank Early name for the New Development Bank BRICS.
Bridgetown Initiative "The Bridgetown Initiative is a proposal to reform the world of development finance, particularly how rich countries help poor countries cope with and adapt to climate change." It was put forth by the Prime Minister of Barbados, Mia Mottley, in 2022. [Source]
British Big Bang The deregulation of the London Stock Exchange in 1986, called the "Big Bang." It eliminated fixed commissions and made other changes, including opening the Exchange to foreign firms. The changes succeeded in "strengthen[ing] London's position as a global financial hub." [Source]
British Imperial System The system of measurement used officially in Great Britain from 1824 until 1965, when it adopted the metric system and its extension, the International System of Units. The US Customary System, still in use by the US, is based largely on the Imperial System, but with some differences.
British South Africa Company A "mercantile company based in London that was incorporated in October 1889 under a royal charter at the instigation of Cecil Rhodes, with the object of acquiring and exercising commercial and administrative rights in south-central Africa." [Source]
Brixit Term used in the British press starting in June 2012 for the possible exit of Britain from the European Union. The term was devised as analogous to the term grexit, although grexit refers to exit only from the eurozone, not from the EU. By the time it was voted on, the term had shifted to Brexit.
Broker's fee The fee for a transaction charged by an intermediary in a market, such as a bank in a foreign-exchange transaction.
Brookings Institution A nonprofit, public-policy think tank in Washington, D.C. Brookings fellows research and write on many public policy issues, including international economics. Politically, it is somewhat left-of-center, providing a home for US Democrats when not in government. Contrasts with the American Enterprise Institute.
Brooks-Murkowski Amendment A US budget law resolution of 1987 that "barred Japan from participating in any construction projects funded in whole or in part by the U.S. government during the 1988 fiscal year." [Source]
Brown field investment FDI that involves the purchase of an existing plant or firm, rather than construction of a new plant. Contrasts with green field investment.
Brussels Effect The role that the European Union, based in Brussels, Belgium, plays in motivating non-EU companies and countries to follow or adopt its rules and technical regulations, in order to be able to export to the EU. The term was coined in Bradford (2020)
Brussels Tariff Nomenclature An international system of classification for goods that was once widely used for specifying tariffs. It was renamed the CCCN in 1976 and later superseded by the Harmonized System of Tariff Nomenclature.
BSEC Black Sea Economic Cooperation
BSAC British South Africa Company
BTA Border Trade Alliance
BTN Brussels Tariff Nomenclature
BTT Barter terms of trade
Bubble 1. A rise in the price of an asset based not on the current or prospective income that it provides but solely on expectations by market participants that the price will rise in the future. When those expectations cease, the bubble bursts and the price falls rapidly.
2. Travel bubble
Bubble economy Term for an economy in which the presence of one or more bubbles in its asset markets is a dominant feature of its performance. Japan was said (later) to have been a bubble economy in the late 1980s.
Bubonic plague The infectious disease that spread through Asia and Europe in mid1300s, known as the Black Death. The disease is transmitted to humans by infected fleas carried by rodents.
Budget constraint 1. For an individual or household, the condition that income equals expenditure (in a static model), or that income minus expenditure equals the value of increased asset holdings (in a dynamic model).
2. For a country, the condition that the value of exports equals the value of imports or, if capital flows are permitted, that exports minus imports equals the net capital outflow. It is equivalent to income from production equaling expenditure on goods plus net acquisition of foreign assets.
3. The curve, usually a straight line, representing either of these conditions.
Budget deficit The negative of the budget surplus; thus the excess of expenditure over income.
Budget surplus Refers in general to an excess of income over expenditure, but usually refers specifically to the government budget, where it is the excess of tax revenue over expenditure (including transfer and interest payments).
Buenos Aires Consensus 1. A document signed in 2003 by Argentina's President Néstor Kirchner and Brazil's President Luiz Inácio Lula da Silva rejecting the policies of the Washington Consensus. [Source]
2. The same term was revived in 2020 by Marko Papic of the Clocktower Group investment firm to refer to the shift toward populism and economic stimulus that many countries displayed.
Buenos Aires Declaration The Buenos Aires Declaration on Trade and Women’s Economic Empowerment, adopted at the Buenos Aires Ministerial. The WTO members "agreed to collaborate on making our trade and development policies more gender-responsive."
Buenos Aires Ministerial The 11th ministerial meeting of the WTO held in Buenos Aires, Argentina, December 10-13, 2017.
Buffer stock A large quantity of a commodity held in storage to be used to stabilize the commodity's price. This is done by buying when the price is low and adding to the buffer stock, selling out of the buffer stock when the price is high, hoping to reduce the size of price fluctuations. See international commodity agreement.
Build America, Buy America Act US legislation from 2021 that "requires all federal agencies ... to ensure ... that no federal financial assistance for 'infrastructure' projects is provided 'unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.'" [Source]
Build Back Better World Announced by the Biden administration June 12, 2021, and denoted "B3W", this is "an affirmative initiative for meeting the tremendous infrastructure needs of low and middle-income countries." It is the US response to, and counter to, China's Belt and Road Initiative.
Build it in Britain A plan announced by the UK's leader of the opposition Labour Party, Jeremy Corbyn, in July 2018, to "to ensure a stronger future for industry with better jobs and opportunities ... in every part of Britain." It emphasizes support for manufacturing.
Build-operate-transfer A government procurement arrangement in which a procuring government gives the (perhaps foreign) supplier temporary right to control and operate what it produces, including payment for its use. When the contract ends, ownership transfers to the government. [Source]
Building bloc Or building block. See stumbling bloc.
Built-in Agenda Issues that were scheduled in the Uruguay Round agreement for continued negotiations within the WTO. In addition to reviewing the implementation of various agreements, these included negotiations for further liberalization in agriculture and services.
Built-in stabilizer Automatic stabilizer.
Bullwhip effect A phenomenon that is said to occur in supply chains, including international supply chains, in which a shock to demand for a final good can cause larger fluctuations in upstream demands. [Source]
Bureau of Economic Analysis The government agency within the United States Department of Commerce that collects macroeconomic data, especially the National Income and Product Accounts, as well as data on balance of payments and international investment.
Bureau of Industry and Security The part of the US Department of Commerce that regulates exports through its Export Administration Regulations.
Bureau of Labor Statistics Part of the US Department of Labor, "The Bureau of Labor Statistics is the principal fact-finding agency for the federal government in the broad field of labor economics and statistics." Although its concern is almost solely with the US, it does report price indices for US imports and exports.
Bureau van Dijk A Moody's Analytic company that "captures and treats private company information for better decision making and increased efficiency." It is the provider of Osiris Data.
Burke-Hartke Bill US legislation, introduced in 1971 but never passed, that would have limited the quantities of imports by product and country to their average levels during 1965-69, then stopping ratios of imports to domestic production from growing over time. [Source]
Burst In the case of a price bubble, the usually sudden reversal of a price from rising over time to falling.
Business 1. A firm.
2. The activities engaged in by firms.
Business cycle The pattern followed by macroeconomic variables, such as GDP and unemployment, that rise and fall irregularly over time relative to trend. Cyclical movements of large countries cause similar movements in their trading partners, inexplicably under real business cycle theory and thus called the trade comovement puzzle.
Business Cycle Dating Committee See National Bureau of Economic Research.
Business process outsourcing The outsourcing and/or offshoring of business processes, such as back office functions.
Business Roundtable An organization of CEOs of major US corporations. It pursues a number of initiatives, including facilitating international trade and investment agreements and enforcing US rights under existing agreements.
BusinessEurope "The leading advocate for growth and competitiveness at European level, standing up for companies across the continent and campaigning on the issues that most influence their performance." Headquartered in Brussels, its members are the national business federations of 35 European countries.
Butter mountain Term refering to the excess supplies of butter that have sometimes accumulated in the EU from the subsidies of the Common Agricultural Policy. [Source]
Buy America This term is loosely used to refer to various statutes, regulations, and initiatives that give preference to purchases from US suppliers. Some of these apply to "federal funds provided to nonfederal entities for infrastructure projects." [Source]
Buy American Act U.S. legislation, from 1933, requiring that government purchases give preference to domestic producers unless imports are at least a specified percentage cheaper. This is an example of a government procurement NTB that was partially given up under the Tokyo Round.
Buy American Act of 1988 Title VII of the Omnibus Trade and Competitiveness Act of 1988, this adds restrictions to the Act of 1933 and requires reporting on countries that discriminate against US products. One purpose was to "provide the president with leverage to persuade foreign governments to open their procurement markets." [Source]
Buy American and Hire American An executive order by US President Trump in April 2017, but revoked by President Biden in January 2021. The substance of the order is not directed at purchases of US goods and services, but at enforcing immigration laws and ensuring that H-1B visas go only to high-skilled, high-paid recipients. [Source]
Buy local/buy national Analogous to "buy American" in the US, this refers to legislation and regulations in other countries that require purchases exclusively from, or with preference for, suppliers within their jurisdiction, especially in government procurement.
Buyback See debt buyback
Buyback arrangement A form of countertrade in which a foreign seller of plant, equipment, or technology is required to purchase part of the resulting production.
Byrd Amendment A US law enacted in 2000 requiring that revenues from anti-dumping duties and countervailing duties be given to the US domestic producers who had filed the cases. This was subject of the US-Offset Act trade dispute in the WTO and ruled to be incompatible with WTO rules. It was repealed by Congress in 2005.