Liquidity smile
The liquidity smile is an observed feature of many financial markets, particularly equity markets, whereby the volume (and hence the liquidity) is concentrated at the start and particularly the end of
Phillips curve
The Phillips curve is an economic model, named after William Phillips hypothesizing a correlation between reduction in unemployment and increased rates of wage rises within an economy. While Phillips
Yield curve
In finance, the yield curve is a graph which depicts how the yields on debt instruments - such as bonds - vary as a function of their years remaining to maturity. Typically, the graph's horizontal or
Seneca effect
The Seneca effect, or Seneca cliff or Seneca collapse, is a mathematical model proposed by Ugo Bardi to describe situations where a system's rate of decline is much sharper than its earlier rate of gr
Budget constraint
In economics, a budget constraint represents all the combinations of goods and services that a consumer may purchase given current prices within his or her given income. Consumer theory uses the conce
Supply and demand
In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good,
Hubbert curve
The Hubbert curve is an approximation of the production rate of a resource over time. It is a symmetric logistic distribution curve, often confused with the "normal" gaussian function. It first appear
Inverted yield curve
In finance, an inverted yield curve happens when a yield curve graph of typically government bonds inverts in the opposite direction and the shorter term US Treasury bonds are offering a higher yield
Production–possibility frontier
A production–possibility frontier (PPF), production possibility curve (PPC), or production possibility boundary (PPB), or transformation curve/boundary/frontier is a curve which shows various combinat
Kuznets curve
The Kuznets curve (/ˈkʌznɛts/) expresses a hypothesis advanced by economist Simon Kuznets in the 1950s and 1960s. According to this hypothesis, as an economy develops, market forces first increase and
Consumption–possibility frontier
The CPF, or consumption–possibility frontier, is the budget constraint where participants in international trade can consume. Under autarky this constraint is identical to the production–possibility f
Beveridge curve
A Beveridge curve, or UV curve, is a graphical representation of the relationship between unemployment and the job vacancy rate, the number of unfilled jobs expressed as a proportion of the labour for
Laffer curve
In economics, the Laffer curve illustrates a theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue. The Laffer curve assumes that no tax revenue i
IS–LM model
IS–LM model, or Hicks–Hansen model, is a two-dimensional macroeconomic tool that shows the relationship between interest rates and assets market (also known as real output in goods and services market
The Elephant Curve
The Elephant Curve, also known as the Lakner-Milanovic graph or the global growth incidence curve, is a graph that illustrates the unequal distribution of income growth for individuals belonging to di
Rahn curve
The Rahn curve is a graph used to illustrate an economic theory, proposed in 1996 by American economist Richard W. Rahn, which suggests that there is a level of government spending that maximizes econ
Great Gatsby curve
The "Great Gatsby Curve" is the positive empirical relationship between cross-sectional income inequality and persistence of income across generations. The scatter plot shows the relationship between
Offer curve
In economics and particularly in international trade, an offer curve shows the quantity of one type of product that an agent will export ("offer") for each quantity of another type of product that it
Harrod–Johnson diagram
In two-sector macroeconomic models, the Harrod–Johnson diagram, occasionally referred to as the Samuelson-Harrod-Johnson diagram, is a way of visualizing the relationship between the output price rati
IS/MP model
The IS/MP model (Investment–Savings / Monetary–Policy) is a macroeconomic tool which displays short-run fluctuations in the interest rate, inflation and output.
Economic graph
The social science of economics makes extensive use of graphs to better illustrate the economic principles and trends it is attempting to explain. Those graphs have specific qualities that are not oft
Weighted average cost of capital
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's c
Marginal propensity to save
The marginal propensity to save (MPS) is the fraction of an increase in income that is not spent and instead used for saving. It is the slope of the line plotting saving against income. For example, i
Long tail
In statistics and business, a long tail of some distributions of numbers is the portion of the distribution having many occurrences far from the "head" or central part of the distribution. The distrib
Duck curve
The duck curve is a graph of power production over the course of a day that shows the timing imbalance between peak demand and renewable energy production. Used in utility-scale electricity generation
Income–consumption curve
In economics and particularly in consumer choice theory, the income-consumption curve (also called income expansion path and income offer curve) is a curve in a graph in which the quantities of two go
Long-run cost curve
In economics, a cost function represents the minimum cost of producing a quantity of some good. The long-run cost curve is a cost function that models this minimum cost over time, meaning inputs are n
Expectations hypothesis
The expectations hypothesis of the term structure of interest rates (whose graphical representation is known as the yield curve) is the proposition that the long-term rate is determined purely by curr
AD–AS model
The AD–AS or aggregate demand–aggregate supply model is a macroeconomic model that explains price level and output through the relationship of aggregate demand (AD) and aggregate supply (AS). It is ba
Contract curve
In microeconomics, the contract curve or Pareto set is the set of points representing final allocations of two goods between two people that could occur as a result of mutually beneficial trading betw
Demand curve
In economics, a demand curve is a graph depicting the relationship between the price of a certain commodity (the y-axis) and the quantity of that commodity that is demanded at that price (the x-axis).
Engel curve
In microeconomics, an Engel curve describes how household expenditure on a particular good or service varies with household income. There are two varieties of Engel curves. Budget share Engel curves d
Expansion path
In economics, an expansion path (also called a scale line) is a path connecting optimal input combinations as the scale of production expands. which is often represented as a curve in a graph with qua
Indifference curve
In economics, an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is indifferent. That is, any combinations of two products
J curve
A J curve is any of a variety of J-shaped diagrams where a curve initially falls, then steeply rises above the starting point.
Identity line
In a 2-dimensional Cartesian coordinate system, with x representing the abscissa and y the ordinate, the identity line or line of equality is the y = x line. The line, sometimes called the 1:1 line, h
Backward bending supply curve of labour
In economics, a backward-bending supply curve of labour, or backward-bending labour supply curve, is a graphical device showing a situation in which as real (inflation-corrected) wages increase beyond
Lorenz curve
In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O. Lorenz in 1905 for representing inequality of the wealth distributio
Wage curve
The wage curve is the negative relationship between the levels of unemployment and wages that arises when these variables are expressed in local terms. According to David Blanchflower and Andrew Oswal
Convex preferences
In economics, convex preferences are an individual's ordering of various outcomes, typically with regard to the amounts of various goods consumed, with the property that, roughly speaking, "averages a
Cost curve
In economics, a cost curve is a graph of the costs of production as a function of total quantity produced. In a free market economy, productively efficient firms optimize their production process by m