Deardorffs' Glossary of International Economics

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C.D. Howe Institute A Canadian think tank that pursues independent research with the objective of raising living standards and "fostering economically sound public policies."

CAATSA Countering America's Adversaries Through Sanctions Act

CABEI Central American Bank for Economic Integration

Cable A slang term among currency traders for the exchange rate between the US dollar and the British pound sterling. It originated when the first trans-Atlantic cable was laid connecting New York and London, permitting rapid communication between the two currency markets. [Source]

Cabotage 1. Navigation and trade by ship along a coast, especially between ports within a country. Since the 1920 Jones Act, this has been restricted in the U.S. to domestic shipping companies.
2. Air transportation within a country. Often restricted to domestic carriers, in an example of barriers to trade in services.

CAC Collective Action Clause.

CACM Central American Common Market.

CAEMC Central African Economic and Monetary Community.

CAF 1. Charities Aid Foundation
2. Corporacion Andina de Fomento.

CAFTA U.S.-Central American Free Trade Agreement, also called CAFTA-DR.

CAI Comprehensive Agreement on Investment

Cairnes-Haberler Model A trade model in which all factors of production are assumed immobile between industries. See specific factors model.

Cairns Group A group of agricultural exporting countries, currently (February 2025) numbering 20, that was formed in 1986 to act as a counterweight especially to the EU in international negotiations on agriculture. Named after the city in Australia where the group first met, in August 1986.

Calibration In economic models, particularly computable general equilibrium models, this refers to the assignment of values to parameters so as to align the model with real-world data.

California effect The possibility that international trade and FDI will induce countries with low environmental standards to raise them closer to those in high-standards countries. Due to Vogel (1995), who recalled California repeatedly raising environmental standards to be followed by other states and the nation.

Call option A financial contract that permits (but does not require) the buyer of the option to buy a commodity or financial instrument (perhaps a currency) from the seller of the option at a specified price and during a specified time period. Also just called a "call." Contrasts with a put option.

CAMEX The Chamber on Foreign Trade of Brazil.

CAN Comunidad Andina (Spanish for Andean Community)

Canada Border Services Agency An agency of the government of Canada that, among other duties, determines whether imports have been dumped or subsidized and may, if determined by the Canadian International Trade Tribunal to be also causing injury, be subject to anti-dumping duty or countervailing duty.

Canada-EU Trade Agreement Comprehensive Economic and Trade Agreement.

Canada-U.S. Agreement on Government Procurement U.S.-Canada Agreement on Government Procurement

Canada-US Auto Pact The "Canada-United States Automotive Products Agreement of 1965" which reduced trade barriers on specified trade between Canada and the United States in automobiles and original-equipment auto parts.

Canada-US Free Trade Agreement A free trade agreement between Canada and the United States signed in 1989 and superseded by the NAFTA in 1994.

CanadEU Shorthand for the idea of Canada becoming a member of the European Union. [Source]

Canadian International Trade Tribunal An "independent quasi-judicial body" of the government of Canada among whose duties are determination of injury in anti-dumping, countervailing duty, and safeguard cases. The first two of these also require action by the Canada Border Services Agency

Cancún Ministerial The 5th ministerial meeting of the WTO held in Cancún, Mexico, September 10-14, 2003 as part of the Doha Round. The meeting failed to reach agreement on a framework text for the round because of disagreements between the US/EU and the developing-country G-20, mostly over agricultural subsidies.

Canonical model of currency crises This term has been used to refer to the model that Krugman (1979b) presented of a currency crisis that results when domestic policy is pursued in a manner inconsistent with a pegged exchange rate. [Origin]

CAP Common Agricultural Policy

Cap and trade A mechanism of regulation the sets upper limits (caps) on levels of action or production for individual entities and then allows them to form a market to exchange (trade) these rights. Used primarily for environmental regulation, these arrangements can function within or across economic units, including countries.

Capacity building The term used repeatedly in the Doha Declaration referring to the assistance to be provided to developing countries in establishing and administering their trade policies, conducting analysis, and identifying their interests in trade negotiations.

CapEx capital expenditure

Capital 1. The plant and equipment used in production.
2. One of the main primary factors, the availability of which contributes to the productivity of labor, comparative advantage, and the pattern of international trade.
3. A stock of financial assets.
4. Of a bank, its assets minus its liabilities.

Capital abundant A country is capital abundant if its endowment of capital relative to other factors is large compared to other countries. Relative capital abundance can be defined by either the quantity definition or the price definition.

Capital account 1. (Current definition) Since sometime in the 1990s, "capital account" refers to a minor component of international transactions, involving unilateral transfers of ownership of property. The common definition, below, describes what is now called the financial account.
2. (Common definition) A country's international transactions arising from changes in holdings of real and financial capital assets (but not income on them, which is in the current account). Includes FDI, plus changes in private and official holdings of stocks, bonds, loans, bank accounts, and currencies.
3. (Bretton-Woods definition) Same as common definition except excluding official reserve transactions. This definition was used under the Bretton Woods System of pegged exchange rates, but is less meaningful under floating exchange rates.

Capital account balance Balance on capital account

Capital account deficit Debits minus credits on capital account. See deficit.

Capital account surplus Credits minus debits on capital account. Same as balance on capital account. See surplus.

Capital accumulation Addition to the stock of capital.

Capital adequacy ratio The ratio of a bank's capital to its risk-weighted credit exposure (liabilities). International standards, such as Basel III recommend a minimum for this ratio, intended to permit banks to absorb losses without becoming insolvent, in order to protect depositors.

Capital augmenting Said of a technological change or technological difference if one production function produces the same as if it were the other, but with a larger quantity of capital. Same as factor augmenting with capital the augmented factor. Also called Solow neutral.

Capital consumption allowance The name used in the National Income and Product Accounts for depreciation of capital.

Capital control Any policy intended to restrict the free movement of capital, especially financial capital, into or out of a country.

Capital deepening Increasing the capital-labor ratio.

Capital density The amount of capital per unit land area in a country. Sometimes used for just particular types of capital, such as housing capital or human capital.

Capital depreciation See depreciation.

Capital duty A tax on the value of a newly formed company, or one that has newly been transfered to a different taxing jurisdiction.

Capital expenditure Often abbreviated "CapEx," this is a firm's spending on capital, that is, what it spends to acquire, upgrade, and maintain physical assets such as buildings and machinery. It also includes purchases of technology.

Capital flight Large financial capital outflows from a country prompted by fear of default or, especially, by fear of devaluation.

Capital flow International capital movement.

Capital formation Capital accumulation

Capital gain The increase in value that the owner of an asset experiences when the price of the asset rises, including when the currency in which the asset is denominated appreciates. Contrasts with capital loss.

Capital good A good, such as a machine, that, once in place, becomes part of the capital stock.

Capital inflow A net flow of capital, real and/or financial, into a country, in the form of increased purchases of domestic assets by foreigners and/or reduced holdings of foreign assets by domestic residents. Recorded as positive, or a credit, in the balance on capital account.

Capital infusion An increase in financial capital provided to a bank, corporation, or other entity from outside.

Capital intensity A measure of the relative use of capital, compared to other factors such as labor, in a production process. Often measured by the ratio of capital to labor, or by the share of capital in factor payments.

Capital intensive Describing an industry or sector of the economy that relies relatively heavily on inputs of capital, usually relative to labor, compared to other industries or sectors. See factor intensity.

Capital-labor ratio The ratio of the quantity of capital (usually only physical) to the quantity of labor, usually as employed in a particular industry, but sometimes referring to the entire factor endowment of a country.

Capital loss The decrease in value that the owner of an asset experiences when the price of the asset falls, including when the currency in which the asset is denominated depreciates. Contrasts with capital gain.

Capital market A broad term, encompassing all the many mechanisms by which saving can be conveyed to those who wish to use it for investment. Most obviously, it includes the markets for stocks and bonds.

Capital market imperfection Anything that interferes with the ability of economic agents to borrow and lend as much as they wish at a rate of interest that truly reflects probability of repayment. A common source of imperfection is asymmetric information.

Capital mobility The ability of capital to move internationally. The degree of capital mobility depends on government policies restricting or taxing capital inflows and/or outflows, plus the risk that investors in one country associate with assets in another.

Capital movement Capital inflow and/or outflow.

Capital outflow A net flow of capital, real and/or financial, out of a country, in the form of reduced holdings of domestic assets by foreigners and/or increased holdings of foreign assets by domestic residents. Recorded as negative, or a debit, in the balance on capital account.

Capital output ratio The ratio of the quantity of capital to the quantity of output, usually in the one-sector economy of a simple growth model.

Capital-saving A technological change or technological difference that is biased in favor of using less capital, compared to some definition of neutrality.

Capital scarce A country is capital scarce if its endowment of capital relative to another factor, usually labor, is small compared to other countries. Relative capital scarcity can be defined by either the quantity definition or the price definition.

Capital stock The total amount of physical capital that has been accumulated, usually in a country.

Capital-using A technological change or technological difference that is biased in favor of using more capital, compared to some definition of neutrality.

Capitalism An economic system in which capital is mostly owned by private individuals and corporations. Contrasts with communism.

Capitalist 1. An owner (or sometimes only a manager) of capital.
2. Associated or identified with capitalism.

Car Wash Lava Jato

Carbon Border-Adjustment Mechanism An EU policy to reduce carbon leakage resulting from its pricing of carbon. It raises the cost of carbon-emitting imports and reduces the price of exports that have paid the carbon price. Approved by the European Parliament December 13, 2022, it will enter into force transitionally October 1, 2023. [Source]

Carbon leakage The possibility that environmental policies such as a carbon tax that are intended to reduce carbon emissions in one country may cause production to move to other countries with less stringent policies and thus increase carbon emissions there. A carbon tariff may partially prevent that.

Carbon tariff A tariff levied on the basis of carbon dioxide that an import's production emits into the atmosphere. The purposes are to treat imports equally with domestic goods that are subject to costly environmental regulation or tax, and also to motivate other countries to use such environmental policies.

Carbon tax A tax on production based on the amount of carbon that it emits into the atmosphere, intended to cause that climate-externality to be internalized by the producer.

CARE Begun in 1945, the Co-operative for American Remittances to Europe (now just CARE) distributed surplus military food rations as "CARE packages" to to those in need after World War II. Today it provides humanitarian assistance around the world.

Cargo Preference Act 1. Military Cargo Preference Act of 1904
2. Cargo Preference Act of 1954

Cargo Preference Act of 1954 US legislation requiring "that 50% of Civilian Agencies cargo and Agricultural Cargo be carried on U.S.-flag vessels." [Source]

Caribbean Basin Initiative A non-reciprocal preferential trading arrangement originally enacted in 1983 by the United States, providing duty-free access to a group of Caribbean countries for selected products. It was renewed and extended in 2000 and currently (February 2025) has 17 beneficiary countries.

Caribbean Community The Caribbean Community and Common Market was formed among four Caribbean countries in 1973 and had 15 members as of July 2021. Its purpose is the promotion of economic integration among the member countries and coordination of foreign policies. (As of February 2025, the website is down and I can't check its present status.)

Caribbean Development Bank A financial institution whose members are primarily the countries of the Caribbean region and whose purpose is to foster economic development in the region.

CARIBCAN A non-reciprocal commitment by Canada to provide duty-free access to exports of most products from 18 Commonwealth Caribbean countries and territories.

CARICOM Caribbean Community and Common Market

CARICOM Single Market and Economy The economic objectives of the CARICOM group, which include becoming a common market.

CARIFORUM The Caribbean sub-group of the ACP countries that functions within the framework of the Cotonou Agreement and the EU. As of February 2025 it had 14 members.

CARIFORUM-EC EPA An economic partnership agreement between the European Community and the CARIFORUM countries, signed in 2008.

Carnet ATA Carnet

Carousel approach A method of trade retaliation, especially when authorized by a WTO dispute settlement finding, in which tariffs are levied on a changing list of the target country's exports, in order to maximize pressure on its government. Required of USTR by the Trade and Development Act of 2000. [Origin]

Carriage of Goods by Sea Act U.S. legislation governing ocean transport of cargo.

Carrier A firm that provides transportation of persons or goods.

Carry trade The practice of borrowing in the currency of a country where interest rates are low and lending the proceeds in the currency of a country where interest rates are higher, to profit from the difference. Success depends on exchange rates remaining relatively constant. Also known as uncovered interest arbitrage. [Origin]

Carry-along trade Goods that a firm exports that it did not itself produce. Practice identified by, and named by, Bernard et al. (2012), who observe that much of trade takes this form.

Cartagena Agreement The 1969 agreement, also known as the Andean Pact, that led ultimately to the Andean Community.

Cartagena Declaration on Refugees The 1984 agreement by countries in Latin America to protect "persons who have fled their country because their lives, safety or freedom have been threatened by generalised violence ... or other circumstances which have seriously disturbed public order."

Cartagena Protocal The Cartagena Protocal on Biosafety to the Convention on Biological Diversity is a 2003 international agreement for "the safe handling, transport and use of living modified organisms (LMOs) resulting from modern biotechnology."

Cartel A group of firms or countries that seeks to raise the price of a good by restricting its supply and/or by price fixing. The term is usually used for international groups, especially involving state-owned firms and/or governments.

Cascading tariffs Same as tariff escalation.

Cash-and-carry A provision of the neutrality acts of 1937 and 1939 permitting the export first of raw materials, and then all trade, with belligerent nations if they were paid for immediately and carried on non-American ships. This was replaced in 1941 by the Lend-Lease Act.

Cato Institute A US think tank "dedicated to the principles of individual liberty, limited government, free markets and peace." It is a strong promoter of free trade.

CBA Cost-benefit analysis

CBAM Carbon Border-Adjustment Mechanism

CBD Convention on Biological Diversity

CBI Caribbean Basin Initiative

CBP United States Customs and Border Protection

CBSA Canada Border Services Agency

CCCN Customs Cooperation Council Nomenclature

CCT Conditional cash transfer

CDB Caribbean Development Bank

CDF Cumulative distribution function

CE The "CE" stamp on a product stands for Conformité Européenne or European Conformity and means that it can be sold throughout the European Economic Area. [Source]

Cecchini Report A 1988 report by a group of experts, chaired by Paolo Cecchini, examining the benefits and costs of creating a single market in Europe, in accordance with provisions of the Treaty of Rome.

CED Comprehensive Economic Dialogue

CEEC Central and Eastern European countries.

CEFTA Central European Free Trade Agreement.

Ceiling See price ceiling.

CELAC Community of Latin American and Caribbean States

Celtic Tiger Name for Ireland during its period of very rapid economic growth, which ended with the financial crisis of 2008. Name was prompted by analogy with the Asian Tigers.

CEMAC Central African Economic and Monetary Community

Cent Subunit of any of several currencies, including the dollar, euro, krona, and rand.

Centavo 1. Subunit of a peso.
2. Subunit of the Brazilian real.

Center for American Progress "An independent nonpartisan policy institute that is dedicated to improving the lives of all Americans."

Center for Economic and Policy Research An Washington DC-based organization established in 1999 that conducts and disseminates research on economic policy issues, both US domestic and international.

Center for Global Development A think tank that "works to reduce global poverty and inequality through rigorous research and active engagement with the policy community."

Center for International Data A center that collects, enhances, creates, and disseminates international economic data for use by scholars. The center was created in 1999, is housed at the Department of Economics, University of California Davis, and is directed by Robert Feenstra.

Center for Strategic and International Studies A "bipartisan, nonprofit policy research organization dedicated to advancing practical ideas to address the world's greatest challenges," it was founded in 1962. Its Economics Program deals, among other things, with international economic policy and global economic governance.

Center for the Study of International Trade and Investment Founded in 2010 by FGV in São Paolo, Brazil, Centro de Estudo do Comercio Global e Investimento. [Source]

Center on Budget and Policy Priorities A US-based and focused "nonpartisan research and policy institute" founded in 1981, with a left-leaning bent. Although it focuses mostly on US domestic issues including health and poverty in addition to budgets, it touches occasionally on issues of international trade and its effects.

Centime Subunit of the franc.

Céntimo Subunit of a colón (no longer used).

Central African Economic and Monetary Community CEMAC is one of two monetary unions in Africa whose members share the CFA franc. The other is WAEMU.

Central American Bank for Economic Integration "The leading source of multilateral financing for the integration and development of Central America," CABEI acts as a development bank for the region.

Central American Common Market A group of Central American countries -- El Salvador, Guatemala, Honduras, and Nicaragua -- that formed a common market in 1960, with Costa Rica added in 1962. It largely disintegrated in the 1970s and 80s due to military conflicts, but reformed as the Central American Free Trade Zone (but without Costa Rica) starting in 1993.

Central and Eastern European countries Refers, informally, usually to the former Communist countries of Europe.

Central bank The institution in a country (or a currency area) that is normally (but see currency board) responsible for managing the supply of the country's money and the value of its currency on the foreign exchange market.

Central bank intervention See exchange market intervention.

Central bank reserves International reserves.

Central European Free Trade Agreement 1. A free trade agreement initiated 2006 among Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Moldova, Montenegro, Serbia and the United Nations Interim Administration Mission in Kosovo. Croatia left when it joined the EU in 2013.
2. A free trade agreement initiated 1993 among the Czech Republic, Hungary, Poland, Slovakia, and Slovenia, later also including Bulgaria and Romania. Its purpose was in part to reverse the bias against trade among these neighboring countries that had developed during the process of transition. This was superseded by the accession of these countries to the Europeann Union.

Central Intelligence Agency Intelligence gathering (and espionage) agency of the United States government, publisher of the World Factbook.

Central parity Par value.

Central planning The guidance of the economy by direct government control over a large portion of economic activity, as contrasted with allowing markets to serve this purpose.

Centre for Economic Policy Research A European network for economic research in many fields of economics including international trade and international macroeconomics. Its affiliated researchers issue working papers and conduct academic conferences.

Centre for Research in International Trade Part of the Centre for WTO Studies, CRIT "fulfills the needs of research scholars, policy makers and academicians on the issues related to WTO and its implications for India."

Centre for WTO Studies Set up in 1999 as a permanent repository of WTO negotiations-related knowledge and documentation, it became part of the Indian Institute of Foreign Trade in November 2002.

Centre William Rappard The building in Geneva, Switzerland, that houses the World Trade Organization. It was constructed in 1927 to house the ILO [Source]

Century of Humiliation The period from 1839 (start of the Opium Wars) to 1949 (Communist takeover of China) during which "China's government lost control over large portions of its territory at the hands of foreigners" and "was forced to open itself to free trade in hard drugs." [Source]

CEPAL Comision Economica para America Latina y el Caribe (Spanish for Economic Commission for Latin America and the Caribbean.

CEPII "France's leading institute for research on the international economy." Known particularly for the economic data that it makes available.

CEPR 1. Centre for Economic Policy Research
2. Center for Economic and Policy Research

CEPT Common effective preferential tariff

CER Australia-New Zealand Closer Economic Relations Trade Agreement.

Certainty Precise knowledge of an economic variable, as opposed to belief that it could take on any of multiple or a range of values. Contrasts with uncertainty. One aspect of complete information.

Certification The process in which the US requires its own approval of implementing legislation by other countries with which it enters a trade agreement. Such intrusion into domestic legislation by a foreign country would be unlikely to be accepted if asked for of the US. [Source]

CES Function A function with constant elasticity of substitution. CES is popular for both production and utility functions. Used extensively in New Trade Theory as the Dixit-Stiglitz utility function for differentiated products under monopolistic competition. With arguments X = (X₁,...,X_n), the function is F(X) = A[Σ_ia_iX_i^ρ]^1/ρ, where a_i, A are positive constants and σ = 1/(1-ρ) is the elasticity of substitution. Due to Arrow et al. (1961). [Origin]

CES preferences Preferences represented by a CES utility function.

CET function Constant elasticity of transformation function.

CETA Comprehensive Economic and Trade Agreement between Canada and the EU.

Ceteris paribus Latin phrase meaning, approximately, "holding other things constant." Used as shorthand for indicating the effect of one economic variable on another, holding constant all other variables that may affect the second variable. Contrasts with mutatis mutandis.

CFA 1. Communauté Financière Africaine (African Financial Community) in WAEMU
2. Coopération Financière en Afrique Centrale (Financial Cooperation in Central Africa) in CAEMC

CFA franc Currency of the Communaute Financiere Africaine, and thus of both the West African Economic and Monetary Union and the Central African Economic and Monetary Community.

CFC Chlorofluorocarbon

CFIA Cooperation and Facilitation Investment Agreement

CFIUS Committee on Foreign Investment in the United States. Acronym is pronounced "see-fee-us."

CFTA Continental Free Trade Area

CGE Computable general equilibrium.

CGD Center for Global Development.

Chaco Embargo An embargo agreed in 1934 by the League of Nations on export of arms and munitions to Bolivia and Paraguay in response to the Chaco War between them on land claimed by both, the first formally declared war since World War I. [Source]

Chaebol A form of large business in South Korea, a conglomerate consisting of many companies centered around a parent company. They are family controlled and have strong ties to government. They are similar to the keiretsu of Japan, except that the chaebol do not own banks.

Chain of comparative advantage A ranking of goods or countries in order of comparative advantage. With two countries and many goods, goods can be ranked by comparative advantage (e.g., by relative unit labor requirements in the Ricardian model). A country's exports will then lie nearer one end of the chain than its imports. With two goods, many countries can be ordered similarly.

Chamber on Foreign Trade The interministerial body of the government of Brazil that formulates, adopts, coordinates, and implements trade policy. [Source]

Change in consumer surplus The change in consumer surplus due to a change in market conditions, usually a price change. For a price change, it is measured by the area to the left of the demand curve between the two prices, indicating a gain if price falls and a loss if it rises.

Change in producer surplus The change in producer surplus due to a change in market conditions, usually a price change. For a price change, it is measured by the area to the left of the (upward sloping part of the) supply curve between the two prices, indicating a gain if price rises and a loss if it falls.

Change in tariff heading To be considered substantial transformation and therefore qualify under a rule of origin in an FTA, an input must fall under a different tariff heading than the output.

Change through Trade The strategy of dealing with China pursued by Germany under the name "Wandel durch Handel" in which Germany and other Western democracies believed that China's authoritarian policies would become more like their own as its trade with the rest expanded. [Source]

Chapeau In the context of GATT articles, this means an introductory paragraph.

Chaperoning A work-around that UK financial institutions hope to use to allow them to transact in the European Union or advise a client there, now that the UK has left the EU. This would use an EU partner to oversee the transaction, though it is not yet (in 2022) clear whether this will be permitted by EU regulators. [Source]

Chapter See HS chapter.

Chapter 11 1. In NAFTA, this portion deals with foreign direct investment. Most controversially, it includes a provision for investor-state dispute settlement.
2. A portion of U.S. bankruptcy law under which a firm can file for protection while it reorganizes.

Chapter 19 A provision of NAFTA that provides for review by an independent panel of anti-dumping and countervailing duty determinations.

Charities Aid Foundation An international nongovernmental organization that describes itself as "a charity, a bank and a champion for better giving," helping donors to have a bigger impact.

Châtelier Principle See Le Châtelier Principle.

Chatham House More formally called the Royal Institute of International Affairs, Chatham House is a London-based, independent policy institute whose mission is "to help build a sustainably secure, prosperous and just world."

Cherry-picking FDI FDI that takes the form of acquiring only better than average firms. To the extent his happens, it makes it more difficult to determine empirically whether FDI improves the productivity of acquired firms.

CHF Acronym for the currency of Switzerland, the Swiss franc, standing for Confœderatio Helvetica Franc.

Chiang Mai Initiative An agreement in 2000 among the "ASEAN+3" countries to cooperate in four main areas: monitoring capital flows, regional surveillance, swap networks that permit reserve pooling, and training personnel. [Source]

Chiang Mai Initiative Multilateralization An arrangement begun in 2009 among the countries of the Chiang Mai Initiative formalizing a multilateral currency swap arrangement to replace the bilateral swap arrangement that preceded it.

Chicken tariff See chicken War.

Chicken War A trade dispute between the U.S. and the EEC that began in 1962 when the EEC extended the variable levy of the CAP to poultry, tripling German tariffs on U.S. chickens. A GATT panel quantified the damage and led to U.S. retaliatory tariffs on cognac, trucks, and other goods. The U.S. 25% tariff on trucks today is a remnant of the chicken war and is sometimes called the chicken tariff.

Child labor 1. Employment of children under a specified minimum age.
2. Work that is harmful to a child's physical or mental health, development, or education, and that is therefore targeted for elimination by labor standards.

Child Labor Deterrence Act A bill introduced into the US Congress by Tom Harkin, but never passed, that would have prohibited imports of products produced by child labor.

Chimerica Name for the "symbiotic relationship between the US and Chinese economies" coined by Ferguson and Schularick (2007). Term is "in reference to the mythical creature composed of different animals, called a Chimera." [Source]

China +1 China Plus One

China 2025 Made in China 2025.

China-CEEC Cooperation The group formerly called 17+1 which since 2021 has had fewer members and may no longer be active.

China debt trap See Debt trap diplomacy

China International Commercial Court CICC was established in 2018 "by the Supreme People's Court of China to adjudicate international commercial cases." Cases are "heard by a collegial panel consisting of three or more judges." It provided "a new place for BRI-related dispute settlement" [Source]

China International Payments System Launched October 8, 2015, this is the first step in a system for wiring funds, denominated in RMB, into China and is intended to lead to internationalizing the Chinese currency. It is the Chinese counterpart to SWIFT.

China MFN renewal MFN China renewal

China model See Beijing consensus

China-Pakistan Economic Corridor A China-initiated series of infrastructure and energy projects intended to connect China's western Xinjiang region to the port of Gwadar, Pakistan. Part of the Belt and Road Initiative. [Source]

China Plus One "A supply chain strategy that encourages companies to minimize their supply chain dependency on China by diversifying the countries they source parts from." Also Plus One and C+1. [Source]

China shock The large increase in exports from China, especially to the United States, that occurred during the first decade of the 21st century, after China joined the WTO. The disruptive effects were studied by Autor, Dorn, and Hanson (2013), then given this name in Autor, Dorn, and Hanson (2016)

China specific safeguard See Section 421.

Chindia A collective name for China and India, sometimes used in discussing the increasing role that these two countries play in the international economy.

Chinese Economic Area Unofficial name for the area comprising Hong Kong, Taiwan, and either China as a whole or just its Special Economic Zones.

Chinn-Ito index A measure of a country's openness on its capital account (i.e., its financial account), denoted KAOPEN. Due to Chinn and Ito (2006).

Chip-4 Alliance An initiative proposed in March 2022 by the US with Japan, South Korea, and Taiwan to reduce their and the world's reliance on semiconductors made in China. [Source]

CHIPS A payments system of The Clearing House Payments Company that says it is "the largest private sector USD clearing system in the world, clearing and settling 1ドル.5 trillion in domestic and international payments per day."

Chips Act The Chips and Science Act.

Chips and Science Act US legislation enacted August 9, 2022, to subsidize production of semiconductors in the US. The aim is explicitly to reduce reliance on China.

Chlorinated chicken dispute The issue of whether Europe should be able to restrict, or require labeling of, imports from the US of chicken that has been bathed in a chlorine solution to kill bacteria.

Chlorofluorocarbon A chemical once used in refrigerators, air conditioners, and as aerosol propellants that, when released high into the atmosphere, destroyed the ozone. This environmental danger was resolved by banning these chemicals as well as banning trade in products that included them, through the Montreal Protocol.

Chocolate war A 30-year dispute between the UK and others in the EU over chocolate ingredients. Continental makers use 100% cocoa butter but UK includes vegetable fat. On EU entry in 1973, UK got an opt-out for its chocolate, but other EU members banned it. In 2003, the ECJ ruled that all must accept UK chocolate. [Source]

CIA 1. Cash in advance
2. Central Intelligence Agency

CIAO The acronym coined by Easterly (2006) for his four requirements for development aid to be successful: C = Customer Feedback; I = Incentives; A = Accountability; and O = Outcomes.

CICC China International Commercial Court

CIF The price of a traded good including transport cost. It stands for "cost, insurance, and freight," but is used only as these initials (usually lower case: c.i.f.). It means that a price includes the various costs, such as transportation and insurance, needed to get a good from one country to another. Contrasts with FOB.

CIPS China International Payments System

Circular economy An economy in which the resources that were used to produce products are recovered when those products cease to be used and are recycled for further use. In its extreme form, a circular economy would not require use of any new resources. [Source]

Circular flow The "circular flow of income and expenditure" refers to the fact that income earned in production is spent on goods that were produced, providing the funds to pay that income. In an open economy, expenditure leaks out of that circle as imports, but re-enters as exports or as capital inflows.

Circular migration The movement of a country's people first out of the country and then back in.

Circulation See international circulation and dual circulation.

Circumvention Actions taken by traders to avoid paying duties. Most commonly, when a tariff applies to exports from only one country, shipment through or from another country, perhaps by moving production there.

CIS Commonwealth of Independent States

CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora

CITT Canadian International Trade Tribunal

Civil Aircraft Agreement See Agreement on Trade in Civil Aircraft.

Civil society The name used to encompass a wide and self-selected variety of interest groups, worldwide. It does not include for-profit businesses, government, and government organizations, whereas it does include most NGOs.

Civil society organization Non-governmental organization

Civil Society Participation Index A ranking of countries by "the extent to which citizens are active in diverse organizations which choose and influence policy-makers," produced by V-Dem.

CJEU Court of Justice of the European Union

Classification of Products by Activity Statistical Classification of Products by Activity is the classification system used for both goods and services in the European Union. Its structure is parallel to that of NACE.

Classification system A system for organizing, recording, and reporting data of a particular kind, such as international trade and industrial output. Typical systems divide data into categories, each assigned numbers. These may be subdivided, using additional digits, so that more digits mean a finer, or more disaggregated, classification.

Classical Referring to the writings, models, and economic assumptions of the first century of economics, including Adam Smith, David Ricardo, and John Stuart Mill.

Classical transfer problem The transfer problem

Clear A market is said to clear if supply is equal to demand. Market clearing can be brought about by adjustment of the price (or the exchange rate, in the case of the exchange market), or by some form of government (or central bank) intervention in or regulation of the market.

Clearing agreement A reciprocal trade agreement between two countries to buy a specified minimum amount of each other's products over a certain time, using a specified clearing currency.

Clearing House The Clearing House

Clearing system An arrangement among financial institutions for carrying out the transactions among them, including canceling out offsetting credits and debits on the same account.

Clearing union 1. The International Clearing Union proposed by Keynes.
2. The Asian Clearing Union.

Climate-resilient debt clause Debt suspension clause

Closed currency position A commitment to take or make delivery of a currency in the future that is covered by a contract in the forward market; opposite of an open position.

Closed economy An economy that does not permit economic transactions with the outside world; a country in autarky. Contrasts with open economy.

Closer Economic Relations See Australia-New Zealand Closer Economic Relations Trade Agreement.

Closure See macroeconomic closure.

Club of Rome The Club of Rome is an international organization that first met in 1970 and issued its first major report, The Limits to Growth, in 1972. It is still defined by its attention to "a cluster of intertwined global problems," arising from economic and populations growth.

CMA Committee The Committee on Market Access of the WTO.

CMEA Council for Mutual Economic Assistance

CMIM Chiang Mai Initiative Multilateralization

CMS analysis Constant market share analysis

CN The Combined Nomenclature

Coalizão Empresarial Brasileira Brazilian Business Coalition

Coase Theorem The proposition that the allocation of property rights does not matter for economic efficiency, so long as they are well defined and a free market exists for the exchange of rights between those who have them and those who do not. Due to Coase (1960).

Coast Guard The US Coast Guard (formerly the Revenue Cutter Service) is a branch of the US military begun by Congress August 4, 1790, which authorized a fleet of 10 cutters to police the coast, prevent smuggling, and assure that tariffs were collected. Its role today includes protecting lives and property at sea. [Source]

Coastwise trade Trade from one location on a coast to another on the same coast, usually assumed to be within the same country. In the US, this is the trade covered by the Jones Act.

Cobden-Chevalier Treaty A preferential trade agreement between Britain and France that went into effect in 1860. It was followed by a flurry of other such agreements among European countries. Included the first use of unconditional MFN. [Source]

Cobb-Douglas function A popular functional form for production and utility functions. With arguments X = (X₁,...,X_n), the function is F(X) = AΠ_iX_i^α_i, where A and α_i, Σ_iα_i = 1, are positive constants. This function has elasticity of substitution between arguments equal to one. As a production or utility function, it has competitive expenditure shares equal to α_i. Due to Cobb and Douglas (1928).

Cobo Subunit of the naira.

CoCo Contingent convertible bond

CoCom Coordinating Committee for Multilateral Export Controls

Code of Trade Liberalization An agreement by members of the Organization for European Economic Co-operation to remove quantitative restrictions on trade and foreign exchange controls. Quotas were removed during 1955-6 and exchange controls were removed by 1958. [Source]

Codex Alimentarius This is the international "food code," consisting of standards, codes of practice, guidelines, and recommendations for producing and processing food. It is administered by the Codex Alimentarius Commission.

Coefficient 1. A number or symbol multiplied by a variable, usually written as preceding that variable.
2. In a regression analysis, the estimated numerical association between one variable and another, often taken to represent the sign and size of the causal effect of one on the other, though really only indicating correlation.

COGSA Carriage of Goods by Sea Act.

Collapse See Great Trade Collapse.

Collective action clause A provision in a bond allowing restructuring of debt if agreed to by a specified supermajority of the bond holders. Included in bonds from Britain always, from New York since 2003, and from the Eurozone since 2013. [Source]

Collective action problem The difficulty of getting a group to act when members benefit if others act, but incur a net cost if they act themselves.

Collective preferences Term used by Lamy (2016) for a society's attitudes and values that may differ from those of other countries with which it interacts. These may cause differences in how they regulate trade and commerce, differences that appear as nontariff barriers.

Collective security Term for the League of Nations system meant to prevent future wars after World War I. Formalized in its Article 16, the intent was that the large group of countries would use sanctions against any country that took aggressive military action against another and that the threat of that would deter such action. [Source]

Collusion Cooperation among firms to raise price and/or take other actions to increase their collective profits.

Colón The main currency unit of Costa Rica. It is divided into 100 céntimo.

Colonial Stock Act of 1900 British legislation that gave the same status to bonds of its colonies as was enjoyed by bonds of the British government. [Source]

Colonization The act of forming a colony, usually outside the borders of the country or state doing it. But see also internal colonization.

Colony "A geographical area that is controlled by a foreign country or state." [Source]

Columbian Exchange The exchange of goods, but also populations, diseases, and ideas, that took place between the Eastern Hemisphere and the Western Hemisphere, across the Atlantic Ocean, in the centuries following the voyage of Christopher Columbus in 1492.

Column 1 rates In the United States, this refers to the MFN tariff rates that are applied to countries with whom the US has normal trade relations.

Column 2 rates In the United States, this refers to the usually higher-than-MFN tariff rates that are applied to countries with whom the US does not have normal trade relations. As of February 2025, only Cuba, North Korea, Russia, and Belarus are subject to Column 2 tariffs. (Trade with Cuba and North Korea is simply prohibited.) [Source]

Combined Nomenclature The system of classification of goods used by the European Union for statistics of international trade.

COMECON Council for Mutual Economic Assistance

COMESA Common Market of Eastern and Southern Africa

Command economy An economy in which decisions about production and allocation are made by government dictate, rather than by decentralized responses to market forces.

Commerce clause This provision of the US Constitution (Article I, Section 8) authorizes Congress "to regulate Commerce with foreign Nations, and among the several States." It therefore gives Congress exclusive power to impose tariffs an (implicitly) prohibits states from taxing or otherwise restricting inter-state trade.

Commercial bank An institution that accepts and manages deposits from households, firms and governments and uses a portion of those deposits to earn interest by making loans and holding securities.

Commercial Court A specialized court in London that handles "complex and high value national and international business disputes, often involving parties based outside the United Kingdom."

Commercial paper Short-term, negotiable debt of a firm; thus a bond of short maturity issued by a company.

Commercial policy Government policies intended to influence international commerce, including international trade. Includes tariffs and NTBs, as well as policies regarding exports.

Commercial risk The risk for an exporter that the buyer will not pay. Contrasts with political risk and exchange risk.

Commercial service Any service provided by a firm, as opposed to being provided by a government agency or an individual worker.

Commercially available off-the-shelf COTS items are often exempted under otherwise restrictive government procurement regulations. [Source]

Commission on Foreign Economic Policy The Randall Commission, tasked by US Eisenhower administration to advise it on international economic policy including trade. Its 1954 majority report called for reduced trade barriers and more currency convertibility, but there were dissenting opinions. [Source]

Commission on International Trade and Investment Policy This commission, called the Williams Commission, was established by President Nixon on May 21, 1970, to examine and make recommendations about US trade and investment policy. It submitted its report July 1971. Its importance was mostly as an indicator of the concern that America's position in the world economy was threatened. [Source]

Committee of Twenty Formally the Committee of the Board of Governors on Reform of the International Monetary System and Related Issues, this "was established by the IMF in 1972 to [plan] a reformed international monetary system." It had "one finance minister or central banker for each of the 20 country groupings represented on the IMF board." [Source]

Committee on Economic Sanctions Formed by the Twentieth Century Fund's Edward Filene in 1931, this committee issued its report Boycotts and Peace in April 1932 making the case for US participation in international sanctions. [Source]

Committee on Foreign Investment in the United States CFIUS is an inter-agency committee of the US government that reviews foreign direct investment into the United States to determine if it might endanger US national security and, if so, stop it.

Committee on Market Access The committee of the WTO with multiple responsibilities regarding tariffs and non-tariff measures, including to supervise implementations of concessions and their withdrawal, and to provide a "forum for consultation on matters relating to tariffs and non-tariff measures." [Source]

Commodity 1. Could refer to any good, but in a trade context a commodity is usually a raw material or primary product that enters into international trade, such as metals (tin, manganese) or basic agricultural products (coffee, cocoa).
2. When a new product becomes standardized, it is sometimes said to have become a commodity.

Commodity agreement See international commodity agreement.

Commodity currency The currency of a country whose exports are dominated by one or more commodities. The value of such a currency is ofter dependent on the prices of these commodities.

Commodity dependent economy An economy that relies heavily on exports of commodities. UNCTAD defines it as one for which "more than 60 per cent of its total merchandise exports are composed of commodities."

Commodity pattern of trade The trade pattern of a country or the world, focusing on goods and services traded as opposed to the factor content of that trade.

Commodity prices Usually means the prices of raw materials and primary products.

Commodity terms of trade 1. Real price of commodities relative to manufactures. This would be the same as the most familiar terms of trade -- the net barter terms of trade -- for many developing countries that export primary commodities and import manufactures.
2. This terms is also used more broadly as a synonym for the net barter terms of trade for any country.

Common Agricultural Policy The regulations of the European Union that seek to merge their individual agricultural programs, primarily by stabilizing and elevating the prices of agricultural commodities. The principle tools of the CAP are variable levies and subsidies. The latter have sometimes led to butter mountains and wine lakes.

Common currency A currency that is shared by more than one country. Thus the currency of a currency area.

Common effective preferential tariff The CEPT tariff is the tariff that a member of the ASEAN Free Trade Area applies to imports that originate in another AFTA country. Unlike conventional free trade areas, the CEPT tariff is not required to be zero, but only between zero and 5%. In addition, countries are permitted to designate products as excluded from the CEPT for several reasons.

Common external tariff The single tariff rate on a product agreed to by all members of a customs union on imports of that product from outside the union.

Common Framework "The Common Framework for debt treatment beyond the DSSI is an initiative endorsed by the G20, together with the Paris Club [and including China], [in] November [2020] to support ... Low Income Countries with unsustainable debt." [Source]

Common market 1. A group of countries that eliminate all barriers to movement of both goods and factors among themselves, and that also, on each product, agree to levy the same tariff on imports from outside the group. Equivalent to a customs union plus free mobility of factors.
2. Early in its existence, what is now the European Union was called informally The Common Market.

Common Market for Eastern and Southern Africa A trade agreement involving 21 nations (as of February 2025) of Eastern and Southern Africa. It went into effect in 1994, replacing a Preferential Trade Area that had begun in 1982, with the aim of forming a free trade area by 2000 and achieving other trade liberalization and transport facilitation over a period of 16 years.

Common Reporting Standard A standard developed by the OECD and approved July15, 2014, calling on countries to obtain and share information from their financial institutions, with the purpose of deterring tax non-compliance.

Common tangent A straight line that is tangent to two or more curves. Used in the Lerner diagram.

Common trade policy In addition to the common external tariff required by a customs union, the European Union has a common trade policy that encompasses rules for exports and imports, export credit insurance, and the administration of anti-dumping and countervailing duties.

Commonwealth, The Formerly the British Commonwealth or the Commonwealth of Nations, this is a voluntary group of 56 countries (as of February 2025) many of whom had been British colonies in the British Empire. Its mission is "to improve the well-being of all Commonwealth citizens and to advance their shared interests globally."

Commonwealth of Independent States An organization formed in 1991 of the nations that had been part of the USSR. Current membership (February 2025) includes 11 countries.

Communauté européenne The European Community. [Source]

Communaute Financiere Africaine Communaute Financiere Africaine = African Financial Community: a group of Central and West African countries, formerly ruled by France, who share two versions of a common currency, the CFA franc, that is guaranteed by the French treasury.

Communism An economic system in which capital is owned by government. Contrasts with capitalism.

Community indifference curve One of a family of indifference curves intended to represent the preferences, and sometimes the well-being, of a country as a whole. This is a handy tool for deriving quantities of trade in a two-good model, although its legitimacy depends on the existence of community preferences, which in turn requires very restrictive assumptions. See Leontief (1933).

Community of Latin American and Caribbean States "CELAC is a regional bloc that aims to unite, strengthen, and promote the interests of Latin American and Caribbean states. It is a successor of the Rio Group and the 2nd Latin American and Caribbean Summit on Integration and Development (CALC)."

Community preferences A set of consumer preferences, analogous to those of an individual as might be represented by a utility function, but representing the preferences of a group of consumers. The existence of well-behaved community preferences requires restrictive assumptions about individual preferences and/or incomes.

Company This word has many meanings, but in economics it is usually a synonym for firm.

Comparative advantage The ability to produce a good at lower cost, relative to other goods, compared to another country. In a Ricardian model, comparison is of unit labor requirements; more generally it is of relative autarky prices. With perfect competition and undistorted markets, countries tend to export goods in which they have comparative advantage. See also absolute advantage. Due to Ricardo (1815). [Origin]

Comparative static Refers to a comparison of two equilibria from a static model, usually differing by the effects of a single small change in an exogenous variable.

Compensated demand curve A demand curve constructed under the assumption that demander's income is not held constant, but rather is varied to hold utility at a constant level. The change in consumer surplus calculated from particular compensated demand curves measures compensating variation and equivalent variation.

Compensating variation An amount of money that just compensates a person, group, or whole economy, for the welfare effects of a change in the economy, thus providing a monetary measure of that change in welfare. Same as willingness to pay. Contrasts with equivalent variation.

Compensation 1.The GATT principle that members who violate GATT rules must either compensate other countries by lowering tariffs or making other concessions, or be subject to retaliation.
2. The actual or potential payment made by the winners from a change in trade or other policy to the losers, intended to undo the harm to the latter. Actual compensation is rare, but the potential for compensation is used as the basis for most evaluations of the gains from trade.
3. The wage paid to labor plus other benefits provided by the employer, such as health care costs.

Compensation principle As a basis for welfare comparisons, the idea that if a policy change (such as a tariff reduction) could be Pareto improving if it were accompanied by appropriate lump-sum transfers from winners to losers, then it is viewed as beneficial even when those transfers do not occur.

Compensation trade Countertrade, including especially payment for foreign direct investment out of the proceeds from that investment.

Competition The interactions between two or more sellers or buyers in a single market, each attempting to get or pay the most favorable price. Economists usually interpret and model these interactions as among individual economic agents -- firms or consumers. Popular terminology extends also to competition among nations, especially competing exporters.

Competition policy Policies intended to prevent collusion among firms and to prevent individual firms from having excessive market power. Major forms include oversight of mergers and prevention of price fixing and market sharing. Called "anti-trust policy" in the U.S. One of the Singapore Issues.

Competitive 1. Applied to a market or industry, this usually means perfectly competitive and contrasts with imperfectly competitive.
2. Applied to a firm or a country's products, this means having low price, high quality, or other attractive characteristics compared to other firms or countries. Applied to a firm, this may also include the effectiveness and aggressiveness of its marketing. See competitiveness.

Competitive advantage Competitiveness. Contrasts with comparative advantage.

Competitive devaluation An exchange rate devaluation by one country in response to devaluation by another, intended to keep its exports competitive.

Competitive equilibrium See equilibrium.

Competitive factor market A market for a factor in which both suppliers and demanders are perfectly competitive, thus taking the factor price as given.

Competitive liberalization 1. Term used by Bergsten (1996) to describe the reductions of MFN tariffs and other barriers by multiple Asian countries in the early 1990s.
2. Zoellick (2000) used the term for the different but equally valid competition by countries, including the US, to negotiate preferential trade agreements with multiple partners. [Source]

Competitive neutrality A level playing field (#2) between private firms and state-controlled or supported firms.

Competitive tariff A tariff set to equalize costs of production.

Competitiveness Usually refers to characteristics that permit a firm to compete effectively with other firms due to low cost, superior technology, or aggressive marketing, perhaps internationally. Thus the condition of being competitive (definition #2). Applied to nations, the word has a mercantilist connotation.

Competitiveness index A measure of an economy's international competitiveness, such as the Global Competitiveness Index or the Global Manufacturing Competitiveness Index

Complement 1. Two goods are complements if they tend to be consumed together, so that an increase in demand for one is associated with an increase in demand for the other.
2. Formally, one good is a complement for another if an increase in demand for one (or a fall in its price) causes an increase in the demand for the other. Opposite of substitute.

Complementary demand In the context of development via import substitution, this refers to the need for sufficient domestic demand for any industrial product the production of which is to be encouraged.

Complementary exporting The export of one firm's products through the distribution channels of another firm.

Complementary slackness The pair of conditions that capture optimality in the presence of a constraint. For example, to maximize f(x) s.t. x≥0, one requires both f′≤0 and xf′=0, where f′=df/dx. These two conditions assure that if x>0, then f′(x)=0 and if x=0, then f′≤0.

Complementation agreement 1. Free trade agreement
2. An agreement between a firm and governments of two or more countries to eliminate duties on its output, in order to attract it to locate in one of the countries.

Complete information The assumption that economic agents (buyers and sellers, consumers and firms) know everything that they need to know in order to make optimal decisions. Types of incomplete information are uncertainty and asymmetric information.

Complete specialization 1. Non-production of some of the goods that a country consumes, as in definition 2 of specialization.
2. Production only of goods that are exported or nontraded, but none that compete with imports.
3. Production of only one good.
4. Being the only country in the world to produce a good.

Complete the internal Market A target of European integration, stated in a 1985 White Paper from the European Commission, which was to remove all barriers between national markets so that they would become, in effect, a single European market.

Compliance Adherence to, or action in accordance with, rules. The rules may be those of an international agreement or institution, such as the World Trade Organization. See also first and second order compliance.

Composite currency An entity defined as a specified combination of two or more currencies, normally existing only as a unit of account rather than as a physical currency. Examples include the SDR and the ECU.

Composite good A fictional good that is used in economic analysis to stand in for a large number of goods, usually all other goods than the one that is the focus of attention.

Compound tariff A tariff that combines both a specific and an ad valorem component. Thus, on an import with quantity q and price p, a compound tariff collects a revenue equal to t_sq + t_apq, where t_s is the specific tariff and t_a is the ad valorem tariff.

Comprador A "member of the Chinese merchant class who aided Western traders in China in the late 18th, 19th, and early 20th centuries." "Compradors arranged trade credit for local merchants and even adjudicated disputes." [Source]

Comprehensive Agreement on Investment An agreement between China and the European Union signed in December 2020 after seven years of negotiations, but awaiting ratification. The pact is intended to facilitate foreign direct investment in both directions.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership The trade agreement, including an FTA, agreed by the eleven non-US members of the Trans-Pacific Partnership in 2018 after President Trump pulled the US out of the TPP. Also informally called the TPP-11.

Comprehensive Economic and Trade Agreement The Canada-EU trade agreement, the negotiations for which were completed August 2014. It entered into force provisionally September 21, 2017, and still awaits (as of February 2025) ratification by each member of the EU.

Comprehensive Economic Dialogue Conversations between high officials of the US and China that began in 2017 after the first meeting between Presidents Trump and Xi.

Compromise Tariff of 1833 A response to dissatisfaction with the high tariffs of the Tariff of Abominations of 1828 and the Nullification Crisis of 1832, this act initiated the gradual reduction in tariffs over the next decade.

Compulsory licensing A requirement for a patent holder to let others produce its product, under specified terms. Countries may require this of foreign patent holders so as to access a product at lower cost. This is permitted by the TRIPs Agreement for certain purposes, such as protecting public health.

Computable general equilibrium Refers to economic models of microeconomic behavior in multiple markets of one or more economies, solved computationally for equilibrium values or for changes due to specified policies. The equations are calibrated with data from the countries being modeled, while behavioral parameters are either assumed or adapted from estimates elsewhere.

Computed value A method of customs valuation when neither transaction value nor deductive value are available: sum the costs of production and preparing goods for export, then include imputed profit and overhead.

Comtrade A database maintained by the United Nations including official international trade statistics.

Comunidad Andina Andean Community

Comvariance An analogue to covariance for three variables. For three variables x, y, and z with values x_i, y_i, z_i, i=1,…,n, the comvariance is com(x,y,z) = Σ_i=1…n(x_i-m(x))(y_i-m(y))(z_i-m(z)), where m(·) is the mean of the values in its argument. Due to Deardorff (1982).

Concave 1. Said of a curve that bulges away from some reference point, usually the horizontal axis or the origin of a diagram. More formally, a curve is concave from below (or concave to something below it) if all straight lines connecting points on it lie on or below it. Contrasts with convex.
2. Said of a function if the set of points below it is convex, and thus if f(λx¹+(1−λ)x²) < λf(x¹)+(1−λ)f(x²) where f is the function of a vector x and 0<λ<1.

Concentration 1. See industrial concentration.
2. Concentration of exports and/or imports can be be measured by the Hirschman index.

Concentration ratio One of two common measures of industry concentration, defined as the sum of the market shares of the largest n firms. n is some small number such as 4 or 6, and the result is called the "n-firm concentration ratio" or "CRn". The other common measure is the Herfindahl index.

Concern Worldwide "A global community working to end extreme poverty with sustainable, community-driven programs."

Concertina tariff reduction 1. The reduction of a country's highest tariff to the level of the next highest, then the reduction of both to the level of the next highest after that, and so forth. Also called the concertina rule and the concertina method. This is known to raise welfare if all goods are net substitutes.[Origin]
2. Any change in tariffs that reduces the variance of the tariff structure, such as reducing the highest tariffs and increasing the lowest tariffs.[Origin]

Concession The term used in GATT negotiations for a country's agreement to bind a tariff or otherwise reduce import restrictions, usually in return for comparable "concessions" by other countries. Use of this term, with its connotation of loss for what economic theory suggests is often a source of gain, is part of what has been called GATT-Speak.

Concessional financing Loans made by a government at an interest rate below the market rate as an indirect method of providing a subsidy.

Concessional sale Sale of a product at a price lower than the market would indicate. Often part of a package of foreign aid.

Conditional cash transfer A program in a developing country to encourage pro-growth and poverty-reducing activities by households by paying them cash conditional on behavior. Used especially for education, requiring sending children to school.

Conditional MFN The levying of most favored nation tariffs on exports of a country only if it has satisfied certain conditions. Members of the WTO can apply conditional MFN only to non-members. Contrasts with unconditional MFN. [Source]

Conditionality The requirements imposed by the IMF and World Bank on borrowing countries to qualify for a loan, typically including a long list of budgetary and policy changes comprising a structural adjustment program.

Cone of diversification See diversification cone.

Conference Board A "global, independent business membership and research association working in the public interest," founded in 1916. It provides data and analysis intended to improve performance of businesses.

Conference Board of Canada The "foremost independent, not-for-profit applied research organization in Canada." Among other services, it provides data on several economic variables for a number of countries in its Oxford World Outlook.

Conference of the Parties See COP.

Confidence fairy A term used frequently in New York Times opinion pieces by Paul Krugman during and after the global recession that began in 2007, referring to the views of those who believe that the economy can be stimulated by balancing government budgets so as to reassure potential investors.

Conflict diamonds Blood diamonds. [Origin]

Conformité Européenne See CE.

Conformity assessment The process of demonstrating that a "product, service, process, claim, system or person meets relevant requirements" imposed by legislation or the ISO through inspection, texting, and resulting certification. [Source]

Congestion The costs and inefficiencies that result when a space becomes crowded. For example, costs of international trade may rise due to congestion of ports, if these facilities are not expanded along with trade.

Conglomerate A company, often a multinational, that includes several unrelated kinds of business.

Connectivity Openness to international trade and other international interactions, this term is used by some development economists to capture the need for this in development.

Consensus Essentially, this means unanimous agreement, and it is the basis for decision making in the GATT and WTO. Formal voting is avoided, and a decision will be blocked if any member present formally objects. But see positive consensus and negative consensus.

Conservative Social Welfare Function A social welfare function that takes special account of the costs to individuals of losing relative to the status quo, and that therefore seeks to avoid large losses to significant groups within the population. Due to Corden (1974).

Consignment 1. Something that is put into the care of another, as when a batch of traded goods is consigned to a shipper for transport to another location.
2. A method of marketing in which the seller entrusts a product to an agent, who then attempts to sell it on the seller's behalf, or on consignment.

Console A bond with no maturity date, which instead pays a fixed amount per year forever. Its simplicity makes it a convenient example in textbooks, where it appears much more frequently than in the real world.

Constant cost This could have many meanings, but when stated as an assumption of an economic model, it means that cost of producing a good, per unit, is the same for all units, and thus does not rise or fall with output.

Constant dollars Dollars of constant purchasing power. That is, corrected for inflation. More precisely includes reference to a base year for comparison, e.g., "in constant 1992 dollars." Same as constant prices.

Constant elasticity of substitution function See CES function

Constant elasticity of transformation function A function representing an economy's transformation curve along which the elasticity of transformation is constant.

Constant market share analysis A technique for decomposing the change in a country's trade into components that correspond to holding its market shares constant in various markets. Introduced to international trade by Tyszynski (1951), it is an application of shift and share analysis of Creamer (1943).

Constant prices See constant dollars.

or . CRTS is a critical assumption of the of international trade. Contrasts with and .