Debt Crisis:
The point at which a country becomes unable to make payments on its debts.
Delinking:
The process of removing a nation's economy from the flow of global trade and investment.
Democracy:
A political system in which the people of a country rule through any form of government they choose to establish. In modern democracies, supreme authority is exercised for the most part by representatives elected by popular suffrage. The representatives may be supplanted by the electorate according to the legal procedures of recall and referendum, and they are, at least in principle, responsible to the electorate.
Microsoft® Encarta® Encyclopedia 2001. © 1993-2000 Microsoft Corporation. All rights reserved.
Dependency Theory (Dependencia):
A theory of economic development that emerged in the 1960s. The theory suggests that economic relations between rich and poor countries -- most notably trade, but also investment relations -- have the inherent effect of enriching wealthy countries and further impoverishing poor countries. Dependency theorists advocate delinking -- removing national economies from the flow of global trade and investment -- wherever possible.
Depression:
A prolonged economic slowdown. A depression is marked by a steep decline in production and demand. As a result, stock markets drop, more companies go bankrupt, and unemployment rises. Governments try to avoid depressions by providing necessary stimuli, such as increasing the money supply or increasing government spending. The Great Depression of the 1930s, caused in part by trade wars, made it clear -- even then -- how interconnected the world economy is.
R.C. Epping, A Beginner's Guide to the World Economy, 3rd ed., New York, 2001.
Deregulation:
The dismantling of legal and governmental restrictions on the operation of certain businesses.
Microsoft® Encarta® Encyclopedia 2001. © 1993-2000 Microsoft Corporation. All rights reserved.
When governments want to encourage competition and make economies more productive, they often deregulate, removing restrictions on companies' behavior. After deregulation, companies such as airlines or telephone service providers are allowed to make their own decisions on prices and markets, regardless of the effect on consumers.
R.C. Epping, A Beginner's Guide to the World Economy, 3rd ed., New York, 2001.
Devaluation:
Official act reducing the rate at which one currency is exchanged for another in international currency markets. A government may choose to devalue its currency when a chronic imbalance exists in its balance of trade. Such a trade imbalance weakens the international acceptance of the currency as legal tender. Devaluation can only occur when a country has been maintaining a fixed exchange rate relative to other major foreign currencies.
Microsoft® Encarta® Encyclopedia 2001. © 1993-2000 Microsoft Corporation. All rights reserved.
Development Banks:
Multilateral banks that lend money toward or invest in the economic development of countries. The World Bank (officially called the International Bank for Reconstruction and Development) and regional banks such as the European Bank for Reconstruction and Development (EBRD), and the Asian Development Bank (ADB) are such institutions.
Distribution:
In economics, the term is applied to two different, but related, processes: (1) the division among the members of society, as individuals, of the national income and wealth; and (2) the apportionment of the value of the output of goods among the factors or agents of production -- namely, labor, land, capital, and management. The division or apportionment of this value takes the form of monetary payments, consisting of wages and salaries, rent, interest, and profit. Wages and salaries are paid to workers and managers; rent is paid for the use of land and for certain kinds of physical objects; interest is paid for the use of capital; and profit is realized by the owners of business enterprises as a reward for risk taking.
Microsoft® Encarta® Encyclopedia 2001. © 1993-2000 Microsoft Corporation. All rights reserved.
Dodge Plan:
A plan designed to end inflation and bring about economic stability in post-World War II Japan. The plan was devised by conservative American banker Joseph Dodge in 1949. It recommended reducing government subsidies, discontinuing Reconstruction Finance Bank (RFB) bonds, and developing government surplus.