Deardorffs' Glossary of International Economics

- Z -

Zaibatsu A large capitalist enterprise in pre-World-War-II Japan, usually centered around a single family and encompassing a wide variety of companies, including a bank. Dissolved after World War II, they tended to re-form into the keiretsu of today, more loosely organized around banks. [Source]

Zero degree homogeneous Homogeneous of degree zero.

Zero for zero An agreement by two or more trading partners to completely eliminate tariffs on a product or products.

Zero lower bound The lower limit on interest rates, presumed to be zero since below that would require taking away from those who lend, who then would not do so. Its importance arises when expansionary monetary policy is rendered impossible.

Zero profit A situation in which the profit in an industry is zero, usually as a result of free entry and exit. It may, if firms are not identical, refer only to the marginal firm. And it always means zero excess profit, not that all returns to capital invested in the industry are zero.

Zero substitution An elasticity of substitution of zero. In a production function, this means a Leontief technology.

Zero sum By analogy with a zero sum game, a situation is said to be zero sum if a gain for anyone requires an equal loss for someone else. A common misperception of international trade is that it is zero sum.

Zero sum game A game in which the payoffs to the players add up to zero, so that a gain for one is necessarily equaled by the net loss to all others. Contrasts with positive sum game. Term was coined by von Neuman (1928). [Source]

Zeroing The practice used by the U.S. in calculating dumping margins of treating individual prices that are above the fair price as being instead equal to that fair price, so that the average price is necessarily at or below the fair price and the dumping margin is therefore positive. [Source]

Zipf's Law The regularity found by G.K. Zipf in word frequency, and later in Zipf (1949), in the populations of cities, which are close to proportional to 1/r, with r the population rank of the city. Thus the largest city has about twice the population of the second largest, three times the population of the third largest, etc. [Source]

Zloty The main currency unit of Poland. Each zloty is subdivided into one hundred groszy.

Zollverein The German customs union formed among various German states starting in 1834 and viewed as a precursor to German unification. [Source]