Home Market Effect
What is the Home Market Effect? The home market effect is a trade theory that argues that countries that exhibit higher demand for some products locally tend to record higher sales of the same products in foreign markets. The home market effect hypothesis was first hypothesized by Stephan Linda (1961) and later formalized by Paul...
Monetary Aggregates
What are Monetary Aggregates? Monetary aggregates are the measures of money stock in a country. Central banks measure money aggregates and present them in the form of end-of-month national currency stock series. In the U.S., monetary aggregates are conventionally labeled as M0, M1, M2, and M3. The categories come with different definitions, as follows: M0: The sum of...
Equity Market
What is an Equity Market? An equity market is a hub in which shares of companies are issued and traded. The market comes in the form of an exchange – which facilitates the trade between buyers and sellers – or over-the-counter (OTC) in which buyers and sellers find each other. The equity market is also...
American Depositary Shares (ADS)
What are American Depositary Shares (ADS)? Before we take a look at American Depositary Shares, we first need to understand the concept of American Depositary Receipts (ADR). The first ADR was introduced by J.P. Morgan back in 1927 for the British retailer, Selfridges. An ADR is a financial product that trades in the US financial...
Shadow Banking System
What is the Shadow Banking System? The shadow banking system is the broad collection of financial institutions and financial markets that offer the same type of services as commercial banks but that are not within the regulatory environment that traditional banks are subject to. Elements of the shadow banking system include mortgage lending companies, repurchase agreements,...
