Economics knowledge and culture through 140 key concepts

To properly understand a field, you must first know the concepts widely used in that field.
Because you need to understand the concepts to build knowledge and culture in that field.
The starting point for studying economics is also learning the core concepts of economics.
This book contains economic concepts selected by Professor Jin-soo Han, a leading economic education expert in Korea.
Since it's impossible to include all the world's economic concepts in a single book, we've carefully selected 140 core concepts that are more frequently used in everyday life and essential to know.

We have increased understanding by explaining not only the definition and meaning of each concept but also specific examples and background.
If a concept is related to a key economic concept or is useful to know together with it and is described elsewhere in this book, it is presented as a 'related concept'.
If you understand a specific concept and read the related concepts thoroughly, you can understand the related content more broadly and systematically.
This book will be a useful guide for teenagers, college students, young professionals just starting out in the workforce, and anyone who wants to build a foundational and background knowledge of economics.

Personal savings are not only desirable, but are also worth encouraging as a natural and rational choice.
However, in a severe recession, the phenomenon in which saving makes it difficult for the economy to escape the recession and ultimately leads to negative results is called the paradox of thrift or the paradox of saving.
The phenomenon was first mentioned by the philosopher and political economist Bernard Mandeville in his early 18th-century book The Fable of the Bees, and was later popularized by Keynes.
If individuals increase their savings to cope with an economic downturn, they will inevitably have to reduce their consumption.
Then, corporate production will further decline, and the economy will fall deeper into a recession rather than emerging from it.
GDP declines, ultimately reducing savings across the economy.
It is called a 'paradox' because the act of trying to increase one's savings actually results in a decrease in savings.
--- p.139, from “The Paradox of Thrift”

The Phillips curve is an economic theory that shows that there is an inverse relationship between a country's inflation and unemployment rate.
That is, when the unemployment rate rises, inflation stabilizes, and when the unemployment rate falls, inflation worsens.
William Phillips, a New Zealand economist who first reported this relationship by analyzing British data,
It is a concept named after.
The Phillips curve is significant in relation to fiscal and monetary policy.
When the economy is in recession and unemployment is high, the government increases aggregate demand through expansionary policies.
As a result, production and employment increase, and the unemployment rate falls.
But there is a price to pay.
As demand for labor increases, wages rise, prices rise accordingly, and inflation worsens.

--- p.151, from “The Phillips Curve”

There is no globally accepted, clear definition of virtual assets.
In our country, virtual assets are defined as electronic certificates that have economic value and can be traded or transferred electronically.
However, even if it is an electronic certificate, if the issuer restricts the use and purpose, or if it is game money obtained from a game, it is not considered a virtual asset.
Bitcoin and Ethereum, which are called cryptocurrencies because they are issued through encryption technology, are representative examples of virtual assets.
Virtual assets are classified into coins and tokens depending on whether or not they have their own blockchain network.
If it has its own independent blockchain network, it is a coin, and if it is developed for a specific purpose on another platform without its own network, it is a token.
Digital rights, which represent the rights to use or distribute digital content such as music, movies, and books, are also included in the category of virtual assets.
--- p.165, from “Virtual Assets”

Inflation is a matter of concern to everyone because it has a direct and tangible impact on people's economic lives, such as by reducing the purchasing power of income.
Perhaps that is why all kinds of inflation-related compound words are constantly appearing in media reports and new words are constantly being created.
Shrinkflation is a portmanteau of the English words shrink and inflation, and refers to a strategy whereby companies reduce the size or weight of a product to achieve the effect of raising prices instead of raising prices.
There are two interpretations: one is that this is a shortcut to avoid the backlash from consumers who dislike price increases, and the other is that this is a desperate measure to avoid the government's pressure to control prices.
--- p.285, from "Shrinkflation"

Chicken game is a type of game theory that usually refers to a situation where two people (companies) engage in an extreme confrontation with the intention of ending the game.
If two people insist on making a harsh choice until the end, they will clash head-on and both will suffer huge losses.
If the fearful person changes to a mild choice and the other person sticks to the original strong choice, the one who changed his choice loses.
At this time, the loser is called a chicken, meaning a coward.
On the other hand, the person or company that sticks to the original, strong choice wins the game and makes a significant profit.
The chicken game is also known as the hawk and dove game or the cowardly game.
It is a term that compares a falcon that fights with all its might to a dove that avoids fighting or prefers compromise as much as possible.
The one who gives up first in a fight is a coward, and if neither side gives up a fierce fight until the end, the worst case scenario will be that both will suffer fatal damage.

--- p.314, from “Chicken Game”