One page per term. Every entry says what the word means, what it does not mean, and one checkable way to use it.
CONCEPTS · 01 · Growth
One number stands in for an entire economy. It is the market value of production inside a border over a period - a flow, not a pile. Knowing what the border and the period exclude is most of reading it correctly.
CONCEPTS · 02 · Growth
Actual output measured against what the economy could produce without pushing prices up. It is estimated, never observed - which is why every inflation argument quietly leans on it.
CONCEPTS · 03 · Growth
The common shorthand - two negative quarters - is not the definition. A recession is a broad decline in activity, and it is dated months after it begins, from the inside out.
CONCEPTS · 04 · Growth
Most numbers you meet are nominal. Dividing by a price index turns them into real ones, and that single division is the difference between a fact and an artefact.
CONCEPTS · 05 · Growth
A bathtub has a level and a tap. The level is a stock, measured at a moment; the tap is a flow, measured over a period. Debt and deficit, wealth and income - the pair is the same idea twice.
CONCEPTS · 06 · Money & Credit
The narrowest money in the system: the central bank's own liabilities. Notes in your pocket plus the balances banks keep with it. Who can hold it is the whole story.
CONCEPTS · 07 · Money & Credit
The money households and firms actually hold: deposits. It is far larger than base money, and it exists because banks create it when they lend.
CONCEPTS · 08 · Money & Credit
Settling balances that banks keep at the central bank. They are not lendable to customers, and they are why one bank can run short while the system as a whole cannot.
CONCEPTS · 09 · Money & Credit
A bank loan does not move money from savers to borrowers. It creates a deposit and a matching asset at the same moment - and repaying the loan destroys both.
CONCEPTS · 10 · Money & Credit
The textbook equation is reserves times a multiplier equals deposits. The arithmetic works; the arrow runs backwards. Banks create the loan first and demand the reserves afterwards, which is why no fixed pool of reserves pins down the quantity of money.
CONCEPTS · 11 · Money & Credit
Central bank reserves are swapped for bonds held by the private sector. The size and composition of both balance sheets change; the net wealth of the private sector does not. Read as a swap rather than a gift, most of the confusion disappears.
CONCEPTS · 12 · Rates
It is the price of overnight reserves between banks. The central bank that sets it is choosing a price, not a quantity, and that one choice propagates outward through every other rate in the economy.
CONCEPTS · 13 · Rates
One issuer, many maturities. The line you draw through those yields carries information about the future, but only once you know what each part of it is pricing.
CONCEPTS · 14 · Rates
The extra yield a lender demands for locking money up for years. It compensates for duration and uncertainty; it forecasts nothing. Confusing it with a rate expectation is a common error.
CONCEPTS · 15 · Rates
A nominal rate minus expected inflation. Expectations are never observed, which is why the number is debated, and why it is still the one that changes what people actually do.
CONCEPTS · 16 · Rates
A measure of how much a bond's price moves when its yield changes, and it grows with maturity. The same rate move hits the long end hardest, and the arithmetic explains why.
CONCEPTS · 17 · Rates
One hundredth of a percentage point. A small unit for a market where the differences are small and the amounts are large, and the difference between up a quarter and up 25 basis points is not small.
CONCEPTS · 18 · Inflation
A fixed basket of out-of-pocket consumer spending, priced every month. The weights and the shelter inside it do most of the explaining, and the basket is revised, which most readers never notice.
CONCEPTS · 19 · Inflation
The other inflation basket. It is broader than CPI, it counts spending paid for on a household's behalf, and its weights follow what people actually buy. That combination is why a central bank prefers it.
CONCEPTS · 20 · Inflation
Stripping food and energy out of the basket does not mean those lines do not matter. It means they are too volatile to carry a trend. What is left is useful, right up to the point where it misleads.
CONCEPTS · 21 · Inflation
A year-over-year comparison quietly drops the same month last year out of the arithmetic. That is why the headline can fall while the prices on the shelf keep rising.
CONCEPTS · 22 · Inflation
What people expect prices to do is not a forecast to file away. It is an input into what they do today - the wage they ask for and the price they set. That is why a central bank watches it more closely than the last inflation print.
CONCEPTS · 23 · Inflation
Slower price increases are still increases. The word is used constantly and read wrongly almost as often. Deflation is the genuinely different thing, and confusing the two produces bad decisions.
CONCEPTS · 24 · External Accounts
Trade in goods and services, plus income earned across the border, plus transfers with nothing given back. It is not a scoreboard. It is the flow side of a country's position with the rest of the world, and every deficit has a counterpart.
CONCEPTS · 25 · External Accounts
By construction, every cross-border flow is recorded twice and the whole record sums to zero. That is not a claim about the world; it is how the ledger is drawn. Knowing the rule is what stops a deficit headline from reading as a mystery.
CONCEPTS · 26 · External Accounts
It is the money other countries keep their savings in and invoice their trade in. That role is an export in itself: the issuer sells the world a safe place to park value. What it gets is cheaper funding; what it gives up is a free hand.
CONCEPTS · 27 · External Accounts
The phrase names a real asymmetry: the issuer of the reserve asset borrows abroad in money it prints itself. Everyone else borrows in a currency they do not control, so the external constraint binds sooner, harder and differently.
CONCEPTS · 28 · External Accounts
The war chest is what a country falls back on when the world stops buying its money. It defends the exchange rate and covers foreign bills, and it is built through a purchase the central bank has to offset to keep domestic money from ballooning.
CONCEPTS · 29 · Market Mechanics
Every bull-market projection shows you a price. None of them show you the capital required to defend it. Those are two different numbers, separated by roughly a thousandfold, and confusing them is how sensible people end up believing a chart.