Dallas Trimmed Mean
What is the Dallas Trimmed Mean? The Dallas Trimmed Mean, popularly known as the Trimmed Mean PCE Inflation Rate, is a measure of core inflation in the price index for Personal Consumption Expenditures (PCE). It is called the Dallas Trimmed Mean because it is estimated by the staff at the Federal Reserve Bank of Dallas....
Capital Deepening
What is Capital Deepening? Capital deepening refers to an increase in the capital-labor ratio. The capital-labor ratio can go higher either due to an increase in the capital stock or through a decrease in the number of workers. Capital deepening increases the marginal product of labor – i.e., it makes labor more productive (because there...
Public Infrastructure
What is Public Infrastructure? Public infrastructure refers to infrastructure facilities, systems, and structures that are developed, owned, and operated by the government. It includes all infrastructure facilities that are open to the general public for use. Infrastructure includes all essential systems and facilities that allow the smooth flow of an economy’s day-to-day activities and enhance...
Natural Rate of Interest
What is the Natural Rate of Interest? The natural rate of interest is also called the neutral interest rate, neutral rate, r* (r-star), and the long-run equilibrium interest rate. This interest rate is the theoretical short-term interest rate that would support the economy at maximum output or full employment GDP while keeping inflation constant. The...
Neutrality of Money
What is the Neutrality of Money? A staple in classical economics, the neutrality of money suggests that changes in the supply of money in an economy only affect nominal economic variables such as exchange rates, wages, and the prices of goods and services. According to the theory, changes in the money supply do not affect...
