Deardorffs' Glossary of International Economics

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K In economic models, K is commonly used to represent "capital." This is presumably due to the fact that German for capital is "kapital," and also to the fact the C is more commonly used to represent consumption.

Kaldor improvement Potential Pareto improvement

Kaldor-Hicks Criterion The criterion that, for a change in policy or policy regime to be viewed as beneficial, the gainers should be able to compensate the losers and still be better off. The criterion does not require that the compensation actually be paid, which, if it did, would make this the same as the Pareto criterion. [Origin]

Kaldor-Hicks improvement Potential Pareto improvement

Kaleidoscope comparative advantage A variant of fragmentation due to Bhagwati and Dehejia (1994).

KAOPEN See Chinn-Ito index.

Keiretsu A group, or network, of manufacturing and. other companies in Japan, usually centered around a bank and including a trading company. Keiretsus are characterized by cross-ownership of shares, strategic coordination, and preference for transactions within the network. See also zaibatsu

Kemp-Wan Theorem The proposition, due to Kemp and Wan (1976), that any group of countries can form a customs union that is Pareto improving for the world, so long as nondistorting lump-sum transfers within the union are possible. This is done by setting the vector of common external tariffs to leave world prices unchanged.

Kennedy Round The sixth round of multilateral trade negotiations that was held under GATT auspices, commencing 1964 and completed 1967. It was the first to move beyond negotiating only tariff reductions into such trade rules as anti-dumping.

Keynes' Law Sometimes suggested as the counterpart to Say's Law, here stating "demand creates its own supply" on the grounds that increased aggregate demand increases output and employment, though only in a less-than-fully-employed economy. Again, it is unlikely that Keynes would have said this.

Keynesian Referring to models of the aggregate economy based on ideas stemming from Keynes (1936). Keynesian models depart from neoclassical assumptions primarily by allowing for disequilibrium in labor markets, with aggregate employment and output being determined instead by aggregate demand.

KfW Development Bank The development bank of the German Federal Government.

Kigali Amendment An amendment to the Montreal Protocol agreed in October 2016 in Kigali, Rwanda, to reduce and phase out production and use of HFCs.

Kimberly Process An international certification system for export and import of diamonds, initiated in 2000, intended to stop the trade in blood diamonds.

Kindleberger spiral A diagram introduced by Kindleberger (1973) showing the dramatic downward spiral of world trade during the first years of the Great Depression, 1929-33. Its twelve axes radiate out from the origin and measure world trade by calendar month for each year.

Kissell Amendment Modeled on the Berry Amendment, this 2009 US legislation "restricts the Department of Homeland Security to procuring uniforms and other textiles from U.S. manufacturers, with certain exceptions." [Source]

KK Model Knowledge capital model

Know Your Customer Or Know Your Client, abbreviated KYC, is an important part of fighting financial crime and money laundering. It means for financial institutions to identify and verify the identity of clients, both when they open accounts and periodically over time. [Source]

Knowledge capital The knowledge-based assets that a firm acquires -- for example, through R&D or by licensing technology from others -- that it is then able to use for its activities throughout the firm, including in multiple production facilities.

Knowledge capital model A model of a multinational enterprise in which knowledge capital plays an essential role. Named and estimated by Carr et al. (2001), who attribute it to earlier work by Markusen and others.

Knowledge economy This term refers loosely to modern advanced economies in which knowledge -- both human capital and advanced technology -- is thought to be more important than other factors, such as capital and natural resources, for economic success.

Knowledge transfer In the context of international economics, this means more or less the same as technology transfer, although it could also include international education services.

KOF Swiss Economic Institute An economic research institute that began in 1938 and whose cornerstone is economic surveys of companies. Among other indicators of economic activity, it produces the KOF Globalisation Index.

Kondratieff cycle A cycle in economic activity hypothesized by Kondratieff (1926) to operate over a period of several decades and divided into four phases: spring (expansion), summer (recession), autumn (plateau), and winter (depression). Also called the Kondratieff wave or long wave.

Kopek Subunit of the ruble.

Kopiyok Subunit of a hryvnia.

Kravis-Lipsey-Bhagwati effect The effect that factor-endowment differences, if large enough to prevent factor-price equalization, have on prices of nontradables, and thus price levels, in high- and low-income countries. Due to Kravis and Lipsey (1983) and Bhagwati (1984).

Krona The main currency unit of Sweden. It is divided into 100 cents.

Krone The main currency unit of Denmark. It is divided into 100 øre.

Kroner The main currency unit of Norway. It is divided into 100 øre.

Krugman model A model of trade with monopolistic competition in which products are differentiated via a Dixit-Stiglitz utility function and production is subject to increasing returns to scale, in the style of Krugman (1979a) and Krugman (1980)

Krugman specialization index Measures the extent to which production patterns of a country and a group differ. At 0, they produce the same goods in the same proportions; at 2 they produce only different goods. With s_i = industry i's share in the country's output and s_i* = its share in the group, index is K=Σ_i|s_i–s_i*|. Due to Krugman (1991a, p. 76).

Kurush Subunit of the Turkish lira.

Kuznets curve An inverse U-shaped relationship between per capita income and inequality, suggesting that inequality is low in very poor countries, rises as they develop, and then ultimately falls as income rises still further. Hypothesized by Kuznets (1955).

Kyat The main currency unit of Myanmar. It is divided into 100 pya, but pya coins are very rare.

KYC Know Your Customer

Kyoto Convention The International Convention on the Simplification and Harmonization of Customs Procedures, adopted in 1974 and revised in 1999 by the WCO, is the "blueprint for modern and efficient Customs procedures." It is based on the principles of transparency, predictability, standardization, and simplification, among others.

Kyoto Protocol An agreement adopted December 11, 1997, under the United Nations Framework Convention on Climate Change committing industrialized economies to limit and reduce emission of greenhouse gasses.