zaibatsu
A Japanese group of large companies owned by a family-controlled holding company.
zai teku
Financial management (Japanese).
zakat
under islamic law, a tax on surplus wealth, e.g. on buried treasure acquired through little labour, or on a herd above a certain size. The tax is levied to help the poor and needy.
zero base budgeting
A method of governmental budgeting which begins with an appraisal of all spending projects on their merits and then, by aggregation, produces a budget total. it was intended, when it was introduced by the Carter Administration in the USA in the 1970s, to replace the traditional budget method of deciding first on an expenditure total and then allocating that sum among different programmes. in practice, it is questionable whether this method can be implemented as project analysis is long, costly and difficult – and not applicable to all parts of a budget.
zero coupon bond
A bond bearing no interest. As the bond is issued at a discount, it has a redemption yield.
zero growth
The characteristic of an economy in a STATIONARY STATE. CLASSICAL ECONOMISTS feared the movement of the economy to stationarity, excepting John Stuart mill who was willing to approve of no growth, providing that there was a satisfactory income distribution. in modern advanced economies this has been suggested as a goal on the grounds that growth of the gross national product generates social costs in the form of pollution, congestion and more arduous work, as well as running down non-renewable resources too rapidly. zero growth is often expressed as a condemnation of all growth rather than an attack on particular undesirable economic activities. However, changes to more environmentally-friendly production techniques make economic growth more acceptable.
zero-infinity dilemma
A problem in environmental economics when the probability of damage is small but the impact of a pollutant is potentially large.
zero population growth
The goal of many twentieth-century disciples of malthus usually taking the form of advocating birth control. in many west European countries the use of contraceptive pills since the 1960s has brought the natural rate of increase below the replacement level.
zero priced
Free. This term enables the prices of everything to be placed on a continuum from zero to a considerable sum. Many goods and services provided by the public sector are given freely to consumers, e.g. most of the health care provided by the UK’s National Health Service. Although goods can be free to a consumer, they are not costless because of the scarcity of factor inputs.
zero profit
The absence of supernormal profits in the long run, under conditions of perfect competition, as firms earn only normal profits which are included in average costs.
zero-rated good
A good not subject to value-added tax. Exemptions from value-added tax vary from country to country but the principal items excluded in some countries have been food, clothing and educational materials.
zero real interest
A nominal rate of interest equal to the rate of inflation of that country.
zero-sum game
Economic activities in which gains to the winners equal losses to the losers. There are many examples of these games, e.g. the attempt of all major trading countries to have export surpluses.
Zeuthen, Frederik Ludvig Baug, 18881959
Danish mathematical economist who graduated from Copenhagen University in 1912 and was employed by the Danish social security system from 1912 to 1930 before beginning his academic career. He developed a theory of collective bargaining based upon the possible outcomes of expected conflict, as perceived by management and labour, and developed the theory of duopoly by expanding the notion of PRODUCT DIFFERENTIATION.
Zipf’s law
A linear relationship between the logarithm of the largest cities and the logarithm of those cities’ populations after ranking the cities by size starting with the largest. it is claimed to be universally true and to reflect constant returns to scale in cities.
zombie
A company insolvent but continuing to operate.
zonal pricing
The aggregation of nodal prices to produce the same prices over part of a system such as electricity transmission.
zone of freedom
A price range of the tariffs set by major airlines. The ‘zone’ is the range below and above a single reference level within which an air tariff must be set.
zoning
A local government method of regulating land use. By the prohibition of certain types of building in particular areas, land values and the nature of economic activity are affected.
Z-score
A measure of the overall performance of a company which takes the form of a weighted index. The index is a + b x profitability c x gearing. In this expression, a is a constant and b and c are coefficients reflecting the relative importance of each ratio. The score for an individual company is compared with a test score to judge whether the company is a financial failure or a success.
