How will big data affect monetary policy
Here you will find explanations of terms and answers to frequently asked questions.
- Alternative food“Alternative Food” encompasses a range of new alternative foods. The trend towards “alternative meat” is currently attracting a great deal of attention. Alternatives to the consumption of animal products have increased steadily in recent years and the term “alternative” has also been associated with food. Alternatives to conventional food consumption are called for by a variety of groups and initiatives such as the organic movement, veganism, zero waste or fair trade initiatives, Slow Food or Fridays for Future. What these initiatives have in common is that they criticize conventional production and consumption models and want more sustainable, fair, healthier and tastier products.
- Alternative food system"Alternative Food Systems" are based on the value chains and innovative technologies that can be derived from the new products. The effects that result from the scaling of the products through new production systems, in turn, have a massive influence on the capacities, utilization and value chains of the conventional suppliers, who mainly rely on animal protein processing.
- Old-age insuranceOld-age security describes the problem of adequate security and provision in retirement age. It is already evident today that existing pension systems are facing serious problems even in affluent countries. In addition to adverse demographic trends, this is due to a lack of willingness on the part of politicians to reform and, more recently, the phenomena “low interest rates” and “national debt”.
- APP (Asset Purchase Program)APP is an asset purchase program that was approved by the ECB in early 2015. It is sometimes referred to as the "Expanded Asset Purchase Program" (EAPP).
- Asset price bubble“Asset price bubbles” typically refer to excessive inflation of assets far beyond their fundamentally justified value. The background to such inflation is usually an excessively expansionary monetary policy.
- Autonomous drivingThe trend towards autonomous driving is changing previous transport and mobility systems. In this area, different technologies are brought together, which can be characterized by keywords such as electromobility, digitization, robotics and cognitive computing. Autonomous driving is likely to bring about major changes in areas such as automotive engineering, logistics, transportation and tourism.
- Bank Bailout PolicyThe targeted relief of a troubled banking system is called “bank bailout policy”. The state and / or the central bank buy large parts of their no longer valuable loans directly from the banks, thereby enabling rapid restructuring.
- BifurcationThe term “bifurcation” originally comes from mathematics and the so-called chaos theory, where it describes the phenomenon of a “qualitative change of state” in non-linear systems. What is meant is a division of progressive patterns into two self-similar “fractals”. In other natural sciences as well as in a general perspective, bifurcation regularly describes a “splitting” of existing phenomena or developments into two separate subsystems. Bifurcations always show the typical pattern of a “fork”, ie a separation of continuous paths into two diverging “branches”. With a view to the global economy, the term stands for a possible split into two separate economic hemispheres (“blocks”).
- Big dataThe keyword "Big Data" denotes a comprehensive aggregation and evaluation of complex data with the help of powerful digital analysis tools. The aim of such analyzes is usually to create detailed forecasts on the basis of specific correlation or relationship patterns or to determine personal behavior. Big data is relevant to numerous areas such as security, consumption and science.
- BitcoinBitcoin is the first and by far the best-known cryptocurrency. In 2008, Satoshi Nakamoto (pseudonym) designed Bitcoin based on blockchain technology and launched it successfully in 2009. Bitcoin is also the first successful implementation of a blockchain architecture. The possession of a bitcoin is not expressed by a note or a coin, but is recorded in an electronic property register (blockchain).
- BlockchainA new method of digital documentation is called "blockchain". The approach is based on decentrally stored "transaction blocks and chains". In this way, it forms a steadily growing decentralized database of all transactions recorded. Blockchain has the potential for disruptive changes to previous processes in the field of recording, processing, documenting and verifying transactions and business processes. This primarily affects banks, stock exchanges and other financial intermediaries, but possibly also other institutions.
- BREXITBREXIT means the United Kingdom's withdrawal from the European Union. It took place on January 31, 2020 and is regulated by the Withdrawal Agreement signed on January 24, 2020. In a transition phase, the long-term relationship between the UK and the European Union was renegotiated. As of January 1, 2021, the United Kingdom is no longer part of the EU internal market and the customs union.
- Business angelA business angel is someone who financially participates in companies and at the same time supports the start-up with know-how and contacts in a typically very early phase of company development.
- Carbon bubbleThe term carbon bubble describes the phenomenon of a possible overvaluation of fossil fuels against the background of global climate change and the UN climate targets derived from it. If these climate goals were implemented, only some of the fossil fuels available worldwide (oil, gas, coal) would still be economically viable. Correspondingly, the valuations for reported reserves and deposits would be excessive and would have to decrease significantly (“bubble”).
- Chat / conversation botsAt their core, chat / conversation bots are often equipped with deep learning algorithms. These enable the user to contact a computer by word or writing.
- Cognitive computingCognitive Computing describes new approaches in computer science in which machine learning ("machine learning") and greatly improved ("cognitive") human-machine interfaces lead to a significant increase in machine performance. Cognitive computing is often seen as a preliminary stage to so-called "artificial intelligence".
- Corporate responsibilityCorporate responsibility describes a company's sense of responsibility towards society, employees, the environment and the economic environment. Corporate responsibility stands for a corporate philosophy that puts ethically responsible behavior towards all stakeholders at the center of all corporate activities.
- Cultured MeatThe term "Cultured Meat" means organically cultivated meat or so-called in-vitro meat. In vitro, Latin for "in the glass", means "outside the organism under artificial conditions, in the test tube". Other names for Cultured Meat are also: Meat from the Petri dish; Cultured meat; safe meat; clean meat; victimless meat. Cultured Meat corresponds to the structure and properties of animal meat.
- Cyber war / cyber warCyber warfare refers to quasi-armed conflicts in and around virtual space, i.e. so-called cyberspace. The resources used come mainly from the field of information technology, which can lead to targeted attacks with disruptive programs (“computer viruses” / “malware”) or large-scale cyber attacks (“hacking”) against companies, institutions or critical infrastructure.
- 3D printingSo-called 3D printing is a new process for the decentralized production of objects and spatial structures with the help of a printer-like system. This process has the potential to overturn traditional production processes in numerous areas of the economy and could massively change global value chains.
- Decoupling / decouplingWith a view to the current system of the world economy, the term “decoupling” refers to an increasing tendency to systematically dissolve or at least strategically reduce economic ties between the two major economies of the USA and China. This economic decoupling follows an increasing geopolitical rivalry between the USA and China and can result in the global economy being split into two separate blocks (“bifurcation”).
- Deep learningDeep learning describes a new generation of machine learning that goes back to the technology of neural networks. Neural networks are the attempt to recreate small sections of the functioning of a human brain consisting of neurons and synapses and to train them with closely defined learning tasks. Several “deep” architectural layers of neurons and connections are used here, which is what led to the naming.
- DecarbonizationDecarbonisation describes a socio-political and economic process with the aim of reducing the use of fossil fuels in the economic cycle. This ecological transformation should contribute to a significant reduction in climate-damaging emissions and an overall more sustainable economic order. The path to comprehensive decarbonization is characterized by high “conversion costs” and corresponding “conversion risks” (including the problem of “stranded assets”).
- DemographicsThe term demography describes the entirety of the factors with which the composition and development of entire populations can be described. In particular, the distribution by age group and the reproduction rates of a society are decisive factors. The peculiarity of demographic factors is that they allow long-term trends to be forecast, often with a very high degree of accuracy.
- Dependency ratioThe term dependency ratio describes the relationship between the working part of a population and the pension recipients. The higher the dependency ratio, the more retirees have to be financed by active employees. In countries with adverse demographic trends, the key figure has been increasing for years and will continue to deteriorate in the future. Japan, as well as Central and Southern Europe, are already badly affected.
- Digital economyDigital economy is a keyword that describes an economic system that is strongly characterized by “digitization” and automation. Core areas such as production, communication and administration are heavily digitized, networked and often automated. There are concrete effects in the area of low-wage jobs, which are becoming obsolete due to advancing digitization.
- Digital farming“Digital farming” means the consistent application of precision farming and smart farming methods, the internal and external networking of operations and the use of web-based data platforms together with big data analyzes.
- Digital nativesAdolescents and young adults who were born and grew up with the advent of digital media are referred to as “digital natives”. It is generally assumed that the generation of “digital natives” will bring about a fundamental change in the economy and society through their natural relationship to digital technologies. (analogous to Generation X / Generation Y)
- Central bank digital moneyThe term: digital central bank money refers to projects from the second half of the 2010s that create electronic money that is to be stored directly in accounts at the central bank and is available to a larger group of users than the current digital form of the monetary base for commercial banks.
- digitalizationDigitization stands for the increasing penetration of numerous areas of business and society by digital technologies. Examples are the new social networks (“Social Media”), transactions on the Internet (“Online Shopping”), digital financial systems (“FinTech”) and changed production processes (“Industry 4.0”).
- DisparityThe term disparity describes the entirety of security, care and support systems in modern societies. Social systems are increasingly being overwhelmed and are reaching the limits of sustainable finance. The causes are demographic trends and the increasing use of existing social systems.
- DisruptionEconomic theory describes disruption as shock-like innovation or change processes with high impact. Existing processes, technologies, companies or industries are exposed to strong distortions, up to and including complete transformation or extinction. Examples are the introduction of digital storage media in photography, the advent of the Internet in the media sector or the introduction of 3-D printing in certain manufacturing processes.
- DogecoinDogecoin is a cryptocurrency whose name and design are based on the internet phenomenon (meme) Doge. Dogecoin was released on December 8, 2013 and was meant to be a parody of the Bitcoin. There has been no software update for Dogecoin for over two years, which makes this currency increasingly technically unattractive.
- unicornA unicorn refers to a start-up company with a market valuation, before an IPO or an exit, of over USD 1 billion.
- ELA loans (Emergency Liquidity Assistance)ELA loans are emergency aid for short-term liquidity bottlenecks in the European banking system. The ELA loans are granted by central banks of the ECB system to the associated national banking institutions, but are subject to approval by the ECB. From February to the end of 2015, the ECB tolerated the (allegedly illegal) ELA loans from the Greek central bank, which (also latently illegal) continued to finance the bankrupt Greek state.
- ElectromobilityElectromobility stands for a possible replacement of previous drive systems based on combustion engines with new forms of electrical mobility. The strong drivers behind this trend are the constraints of global climate change, but also technological advances in battery and storage systems.
- Renewable energyRenewable energies, also known as regenerative, alternative, sustainable or eco-energies, are energy sources that are either available in practically unlimited quantities or can be regenerated (renewed) quickly in a natural way.
- ESG toolsESG investments stand for liquid and illiquid investments that take ecological (environmental), social and corporate management (governance) criteria into account in addition to financial indicators. They differ in the degree of integration of ESG criteria.
- ESMESM stands for the "European Stability Mechanism", which was founded in the course of the euro crisis from 2010 on the basis of intergovernmental agreements between the governments of the euro countries. The primary goal of the ESM is to stabilize fragile EMU countries, for example through liquidity support and the granting of inexpensive loans. A further development of the ESM into a kind of “European Monetary Fund” (EMF / EMF) is planned, but is currently still being negotiated at EU level.
- ETF (Exchange Traded Funds)ETFs are investment funds and other listed investment vehicles that usually have a "passive" investment structure, that is, very close to market indices. Due to their cost advantages, ETFs are increasingly being used by both private and institutional investors.
- EU reformEU reform stands for an eventful and not clearly defined process of EU politics, with which the "European project" is to be stabilized, improved and deepened. The success of this process remains doubtful, as the EU has fewer and fewer similarities and uniform goals after various crises in recent years. At present, efforts to strengthen the integration of the EU stand in opposition to tendencies that demand greater independence from the member states.
- Euro break upEuro Break Up (also: EMU Break Up) describes the risk of failure or disintegration of the European Monetary Union. This risk can be specifically triggered by the exit of individual member states, but also by other political, institutional or economic circumstances or decisions. The respective probability of the euro break-up risk can be determined or estimated using market-based indicators.
- Exponential developmentsHumans are linear beings, used to linearity: Linearity means that when one variable changes, another changes proportionally. The reason why linearity is so close to us is presumably to be seen in the linear advance of time, although time only seems to run linearly (Einstein's theory of relativity). Natural and technological developments, on the other hand, often take place exponentially. At first, the development is very weak and is often filtered out as unimportant by us or the way the brain processes information. At some point, however, a "tipping point" is reached, so that a development progresses explosively - or exponentially.
- Fiat MoneyThe term “fiat money” denotes “uncovered money” that has no intrinsic value and, in principle, can be “generated” without any limitation by a pure act of will by a bank or central bank. Modern financial systems are based on the fiat money principle, in contrast to earlier systems with gold backing or other "value anchors".
- Financial Stability BoardThe Financial Stability Board (FSB) is a global body that includes representatives from finance ministries, central banks and supervisory authorities from the G20 countries, the European Commission, as well as representatives from international standard setters and major financial institutions (including the IMF, World Bank, BIS, ECB). In the FSB, topics of fundamental systemic importance for global financial system stability are discussed.
- Financial repressionFinancial repression refers to state or state-administered measures through which the freedom of financial dispositions, the return on financial or real economic investments and, in general, the financial and asset spheres of economic subjects are deliberately restricted or adversely affected. The goals are mostly a stabilization of fragile financial systems, a “rehabilitation” of broken state finances or comparable “sovereign” measures. Currently, these include the policy of negative interest rates, the targeted devaluation of currencies and the targeted management of financial investments.
- Financial assetsAll assets owned by a private individual that can be directly valued in monetary terms through market prices.
- Food systemThe term "food system" encompasses all processes and infrastructures that are involved in nutrition: cultivation, harvest, processing, packaging, transport, marketing, consumption and disposal of food and food-related goods. Food systems are also strongly influenced by a social, political, economic and ecological context.
- Fossil fuelsFossil fuels are dead biomass that died millions of years ago and was converted through geological processes into coal, crude oil and natural gas as well as various mixed products such as oil sands or oil shale. The nuclear fuel uranium, which occurs naturally on earth, can also be counted among the fossil fuels, as it is not reproduced. The counterpart to fossil energies (including uranium) are so-called renewable energies. They are characterized by the fact that their energy source will renew itself in the foreseeable future or that it will not dry up through use.
- 2 degrees Celsius targetThe 2 degree Celsius target is understood as the overriding goal of international climate policy to limit global warming to less than 2 degrees Celsius compared to the pre-industrial level. This goal was specifically decided in 2015 at the World Climate Conference in Paris.
- Game of ChickenGame of Chicken ("coward game") describes in the vocabulary of game theory a confrontational move with which the respective opposing party is to be forced to make high concessions on the basis of a credible threat. The stake can, as in the example of nuclear deterrence, go up to the threat of destruction / self-destruction.
- Global governanceGlobal governance describes the existence of a global security and conflict resolution concept. Examples of this are the United Nations (UN) and especially the UN Security Council. A multipolar world order with strongly diverging interests, as is currently the case, makes global governance more difficult. Geopolitical conflicts like those in Syria, Ukraine or Africa can then hardly be resolved.
- Global grayingThe phenomenon of increasing “aging” in western industrialized countries is referred to as “global graying”. From Japan to Europe to the USA there are demographic trends that imply a strong increase in “old” population groups relative to the declining proportions of “young” population groups. “Global graying” has strong effects on the respective growth and innovative strength of the countries concerned.
- Globalization dividendThe globalization dividend describes economic advantages and financial "excess returns" that have accrued for around 20 years as a result of increased globalization and the outsourcing of economic processes in certain countries, regions or groups. It is generally stated that this “dividend” was distributed very unevenly across society and that it systematically disadvantaged certain groups.
- Good governanceIn the political sense, "good governance" is a system of rational, transparent and ethical-moral structures and institutions that enables and produces rational, responsible government action that is oriented towards the best interests of the country.
- Green DealThe European "Green Deal" is a concept presented by the European Commission on December 11, 2019 with the aim of reducing net greenhouse gas emissions in the European Union to zero by 2050 and thus becoming the first continent to become climate-neutral. The European Green Deal comprises a number of measures in the areas of financial market regulation (sustainable finance), energy supply, transport, trade, industry, and agriculture and forestry.
- Green Finance Study GroupThe Green Finance Study Group is a research group under the Chinese G20 Presidency. Supported by a co-sponsorship of the Bank of England to identify institutional and market barriers to green finance and to derive options for mobilizing private capital for green investments.
- Green washingGreen or social washing is the term used to describe the offering of impact investing objects that ostensibly promise a social or ecological effect, but hardly ever achieve one in reality.
- GreeningSo-called greening is about environmental measures that are mandatory for European farmers in order to be able to claim direct payments from the EU. Greening has existed since January 1, 2015. The aim of the measures is to permanently preserve meadows and pastures and to make arable farming more diverse in order to make a positive contribution to environmental and climate protection.
- Hanseatic LeagueHanseatic League is a loose amalgamation of the last 12 member states of the EU and EMU, which oppose a change from the EU / EMU to a transfer union. In addition to the Netherlands, Belgium, Ireland, Finland, Luxembourg, Malta, Austria, Denmark, Sweden and the Baltic countries are currently represented.
- Hashgraph / TangleThe main time factor in classic blockchain architecture (e.g. with Bitcoin) is the lengthy process of finding consensus. Put simply, a transaction block is accepted as "truth" in the classic blockchain architecture if all relevant network participants have processed the valid transaction block. This restriction significantly slows the speed (scalability) of the blockchain. New versions of blockchain technology, e.g. Hashgraph or Tangle, focus primarily on this problem. They aim to drastically accelerate consensus building by eliminating the need for all network participants to get all information at the same time.
- Helicopter MoneyHelicopter money is a direct combination of elements of monetary policy and fiscal policy, which is operated with the aim of a massive economic stimulus. The term goes back to the US monetary theorist Milton Friedman and became popular in 2012 by the former head of the US Federal Reserve, Ben Bernanke. The conceptual image symbolizes the dropping of freshly printed central bank money from helicopters for free use by the population. Elements of this policy have been increasingly discussed since the great financial crisis and are already partially used in Japan.
- Human abilityTotality of the resources established in a person that can be of benefit to the individual.
- HyperinflationHyperinflation is the phenomenon of a progressively increasing rise in the price of goods inflation. Typically, this phenomenon arises from an unchecked expansion of the central bank money supply through open money creation. The trigger is usually the misuse of a central bank for public financing purposes.
- ICO - Initial Coin OfferingThe term ICO (Initial Coin Offering) is understood to mean a public raising of capital in which, in contrast to company shares, so-called tokens (coins) are issued. Due to their simplicity, most ICOs are based on the Ethereum blockchain (platform). The basic principle of the ICO is similar to the much more strictly regulated IPO (Initial Public Offering).
- Impact investingImpact investing describes ethically or socio-politically motivated actions through which a real or financial investment is also intended to achieve a social effect (“social impact”). Impact investments are therefore investments that, in addition to financial returns, also aim to have positive social effects.
- Indoor vertical farmingIn "Indoor Vertical Farming (IVF)", the majority of the plant growth processes are relocated to a controlled environment (building / "Indoor"). The technology enables plants to be grown year-round, regardless of the weather and with constant yields in the desired quantity and quality with little use of space.
- IoTThe Briton Kevin Ashton is considered to be the founder of the term "Internet of Things", or IoT for short. In the Internet of Things, physical and virtual objects or their representation network with one another and work together through information and communication technologies.
- IslamismIslamism is a radical and strongly politically colored interpretation of Islam. Radical Islamism is responsible for numerous geopolitically dangerous developments, including Salafism, Islamist terror and the spread of the so-called "Islamic State".
- Climate scenarioA climate scenario allows one to explore how the transformation and physical risks and opportunities that arise from a transition to a low-carbon economy affect an organization or an economy. Since the exact nature of the transformation to a low-carbon economy is fraught with uncertainty in various sectors, scenarios allow one to question assumptions and prepare for eventualities.
- Consensus mechanism / algorithmAll cryptocurrencies are based on a decentralized blockchain architecture. So there is no all-powerful "boss" or "administrator" who determines which transactions are valid and will be included in the blockchain for all eternity. In a decentralized network, you need a specific consensus algorithm (a kind of democracy rule) that clearly determines how a network consensus is reached. So they agree on an identical version of the blockchain. The best-known consensus algorithm is the so-called "proof of work", in which votes are distributed depending on the computer performance.
- CryosphereThe cryosphere is the part of the climate system in which water is present in the frozen state - be it snow, ice on rivers and lakes, sea ice, ice sheets, glaciers and ice caps. Frozen ground on land (permafrost) and under the water of the ocean are also part of the cryosphere.
- CryptocurrencyCryptocurrencies are digital (quasi) currencies with a decentralized and cryptographically secured payment system. There are now over 1,400 different crypto currencies. All cryptocurrencies use blockchain technology as a "substructure".
- Artificial intelligenceArtificial intelligence (A.I.) is understood to mean the ability of machine structures (computers) to “think like a human” and thus also to be able to solve extremely complex communication and decision-making problems. The latest “supercomputers” (Deep Blue, Watson, D-Wave) seem to be very advanced in this process. A.I. is extremely controversial in expert circles, as this could result in unmistakable complications in the future.
- Machine learningProcesses that enable a machine (computer) to recognize structures, inherent patterns and relationships from a large amount of data are referred to as “machine learning”. Similarities and similarities are determined from a repeated machine evaluation of raw data, which then enable an independent learning process. The results of these processes can be analyzed analytically and (related to defined problems) transformed into automated recommendations, evaluations or forecasts. Machine learning is a basic requirement and important basic technology for more sophisticated applications and systems with artificial intelligence.
- Median lineThe "Median Line" is a virtual demarcation line between mainland China and Taiwan, which was established in 1955 under pressure from the USA and runs roughly in the middle of the Taiwan Strait. Under international law, however, the status of this borderline is extremely unclear: While the USA clearly emphasizes its validity, this is consistently denied by China.
- Mega hubAirports that serve as hubs for several airlines are referred to as mega hubs. In Europe, for example, these are London-Heathrow, Paris-Charles de Gaulle and Frankfurt / Main.
- migrationMigration stands for global migration, evasive and flight movements, which increasingly show crisis tendencies. Rising global migration is often based on economic motives (Mexico, Eastern Europe, North Africa), but also wars, civil wars, terrorism, anarchy or global climate change (West Africa, Middle East, Central Asia).
- Mini-BOTMini-BOT stand for Italian government bonds in small denominations, which were considered by the new Italian government as a parallel means of payment and currency replacement.
- Mission driftOne speaks of a mission drift when the primary direction of an investment object shifts from achieving a social and / or ecological effect to achieving financial returns as the primary goal.
- MMTMMT stands for the concept of "Modern Monetary Theory", a heterodox view of the effects of monetary policy. The MMT assumes that, in fact, government spending is always financed through the creation of money by the central banks. This thesis leads to the recommendation to regard central banks as part of the government apparatus and to use the instrument of money creation specifically to finance government spending.
- Monetary dilutionMonetary dilution (analogous to "monetary dilution") describes the process of increasing "flooding" and "dilution" of existing financial systems by newly created central bank money. Newly created central bank money increases the currency of a system, which triggers complex price and quantity reactions. Typically, monetary dilution leads to inflationary effects, distortions and falsifications of market prices as well as a devaluation of the respective currency.
- MonetizationThe term “monetization” refers to the assumption or refinancing of government debts, deficits or other liabilities by the respective central bank. Monetization of national debt by a central bank is considered the "original sin" of politics and monetary policy and is therefore explicitly forbidden in many cases. Since the great financial crisis, however, the first signs of monetization of national debt have already been observed in the context of “unconventional monetary policy” (Japan, but also EMU).
- Moral hazardIn the more recent risk and contract theory, the problem that a market participant or economic entity could tend to behave excessively risky or harmful to the interests of others through incorrectly set incentives is referred to as “moral hazard”. The problem is also relevant in the context of game theory analyzes of “multi-period models”.
- MultipolarityMultipolarity defines a recent geopolitical state. In contrast to the time after the Second World War, it is no longer just one strong country (USA) that exerts a dominant influence on world affairs (or two countries share bilateral spheres of influence such as the USA and the USSR during the Cold War), but more than two countries strive for dominance or geopolitical influence (currently USA, China, Russia). From a geostrategic point of view, multipolarity is a dangerous situation that implies unstable power constellations and severe problems of global governance.
- Multi-resistanceIn medicine, multi-resistance is a form of antibiotic or antiviral resistance in which germs, known as super germs, are insensitive to several different antibiotics or antivirals.
- NDCs (Nationally Determined Contributions)NDCs denote country-specific contributions to the transition to a low-carbon economy and to compliance with the 2 degrees Celsius target that was agreed at the 2015 World Climate Conference in Paris. NDCs also exert direct and indirect pressure on national companies to reduce their emissions accordingly.
- Negative interestFor a long time, negative interest rates were considered unimaginable and mathematically impossible. In the course of fighting the crisis in recent years, however, central banks in Europe (ECB; SNB; Riksbank, national banks) and Japan (BoJ) have lowered their deposit rates into negative territory. At the same time, the yields on long-term government bonds were manipulated into the area of negative interest rates through the strong purchases of securities by these central banks. According to historians, interest rates are currently at their lowest level in 5000 years.
- nepotismNepotism describes behavior in certain circles of politics, business or other areas of life that systematically favor and favor members of the respective groups or - in the negative case - protect them from corresponding liability and accountability. A slang translation of nepotism is the term “nepotism”.
- New economy bubble (also called dotcom bubble)An artificial term for a speculative bubble that burst in March 2000, which particularly affected companies in the New Economy and led to asset losses among small investors, especially in industrialized countries.
- New EnergyThe term “New Energy” stands for a multitude of alternative mechanisms and technologies for the extraction, generation, storage or transformation of primary energy. This usually includes the areas of solar energy and photovoltaics, wind power, hydro energy, geothermal energy and biogas. In a broader definition, this also includes areas such as “smart grids”, electromobility, batteries and other storage technologies.
- NexusIn this context, nexus describes the close interlinking of national debt and banking crises. This results from the fact that banks are often among the largest holders of government bonds due to their particularly advantageous risk classifications. In the event of a crisis (such as 2010-2012) a dangerous negative dynamic with mutual progressive interaction and “toxic problem infection” can arise.
- No bailout clauseThe “no bailout clause” according to Art. 125 TFEU basically stipulates that no country has to take responsibility for the debts and obligations of another country within the framework of the EMU. This clause was in fact broken several times, especially in the context of the euro crisis from 2010, or at least deliberately undermined.
- OEM - Original Equipment ManufacturerAn original equipment manufacturer (OEM) is a manufacturer of components or products that does not bring them to the retail trade itself.
- Overt Monetary FinancingOMF or "Overt Monetary Financing" is an extreme variant of unconventional monetary policy in which the central banks directly and "openly" take over government deficits and / or debts and thus finance them on a permanent basis. In recent times, OMF has been promoted several times by academic and political circles in order to prevent a renewed crisis in the heavily indebted world economy.
- Parallel societyParallel societies are sociological phenomena that play an increasingly explosive role in Western societies. The causes are immigration and migration from other cultures as well as insufficient integration. In Europe, this mainly affects immigrants from the Maghreb (France), from Eastern Europe and Turkey (Germany) as well as from Africa and the Middle East (EU).
- Peak globalizationPeak globalization describes a thesis according to which the process of progressive global economic and trade integration (“globalization”) has passed its climax. Evidence for this are declining trade flows, growing frictions in the global exchange of goods and an increasingly protectionist attitude in many regions.
- Peak oilPeak Oil describes a controversial thesis in the field of oil exploration, according to which global oil production has been showing declining marginal productivity for many years. The peak oil thesis originally assumed that the point in time for the global production maximum for crude oil had already passed at the beginning of the 21st century. With the advent of new conveyor technologies (including "fracking"), this picture has been refuted for the time being. Nevertheless, numerous statements of the peak oil thesis can hardly be disputed physically and remain relevant.
- PermafrostPermafrost soil is frozen all year round, meaning that temperatures below freezing point persist even below the surface of the earth. Permafrost soils are found mainly in Siberia as well as in Alaska and northern Canada. A critical property of permafrost soils is the amount of climate-damaging gases bound there (especially methane). If such soils thaw as a result of global warming, this can trigger extremely harmful feedback effects: The warming leads to an accelerated release of methane, which further accelerates and intensifies the global greenhouse effect.
- polarizationPolarization denotes an increasing divergence and intensification of political discourses in numerous Western democracies. The polarization stems from rising dissatisfaction and frustration in certain sections of the population, leading to more extreme political preferences and more erratic election results. Political “surprises” such as the British BREXIT vote are examples of this tendency.
- populismPopulism stands for an increasing political tendency in numerous western democracies such as France, Italy, Great Britain, Hungary, Poland but also the USA. Populism relies on very simplified, distorted or pointed statements and often sharply drawn and rhetorically aggressive political figures. The rise of populist forces in many countries is a clear warning sign for public policy.
- positivismPositivism is a program of methods in science policy that is based on the epistemology of empiricism. The model of knowledge for all sciences is the scientific knowledge gain. The starting point is sensual experience (empiricism), knowledge of science must be intersubjectively verifiable. In the 20th century, the logical positivism of the Vienna Circle conceived a unified science in which the natural and human sciences should be merged on an empirical basis. As a result, the standards of scientific knowledge can only be established with the help of formal logic and a physicalistic description of the world. For example, in the social sciences, social contexts are described as “social physics”.
- Precision farmingThe English-language term Precision Farming is understood to mean a process of locally differentiated and targeted cultivation of agricultural land. The term encompasses a subset of digital process technologies in the context of digitization in agriculture for the monitoring and optimization of agricultural production processes.
- Precision fermentationThe use of precision fermentation to produce proteins for human consumption is not a novel innovation. In 1978 the first genetically modified yeast for the production of human insulin "Humulin" for the treatment of diabetes was presented. Approved by the FDA in 1982, humulin rapidly replaced previously used animal insulin. Humulin was more constant in quality, better tolerated and controlled the sugar content more effectively and was quickly preferred to animal insulin, although it was initially more expensive to produce.
- protectionismProtectionism describes a political stance with which the economy of a country is to be shielded against external influences, in particular foreign exporters and competitors. The instruments of protectionism include import tariffs, trade sanctions, approval procedures and other restrictions, as well as currency manipulation and other non-tariff trade barriers.
- Pump and dump shops"Pump-and-dump business" is a form of financial fraud in which the share price of previously cheaply acquired assets (e.g. crypto currencies) is artificially inflated (pumped up) by false, positive statements in order to then sell these assets at higher prices to sell off bona fide investors.
- Quantum computerA quantum computer is a processor whose function is based on the laws of quantum mechanics. In contrast to the classical computer, it does not work on the basis of the laws of classical physics, but on the basis of quantum mechanical states.
- Quantum problemIn May 2018, Ran Raz and Avishay published a paper describing a problem that only quantum computers can solve. This problem belongs to the class of BQP (bounded-error quantum polynomial time). Roughly, it is about proving whether two random sequences can be connected to one another by a Fourier transformation. Initially, that sounds relatively useless, but this type of sandbox problem is typical in the development of such new technologies.
- Quantum leapA quantum leap is a direct change of an electron within an atom or molecule from one energy state to another. These energy states are discrete in Bohr's atomic model, i.e. there are no intermediate levels. The idea of a discrete radius with which an electron orbits an atomic nucleus is now considered wrong.It is doubted today whether there actually are quantum leaps and whether they are not just an effect of quantum mechanical measurement processes. In the real world, the term “quantum leap” - unlike in parlance - is actually much closer to its physical interpretation. “Quantum leaps” may appear to us to be disruptive, as exponential processes change from the (sub) linear phase to an exponential movement (“tipping point”). For people who are not “designed” for the perception of exponential processes, this moment can appear as a singular jump without intermediate stops. This means that the picture between the linguistic quantum leap and physics is correct again - albeit differently than intuitively assumed.
- Quantitative easingQuantitative easing ("Q.E.") is a special form of monetary policy that has been practiced by various central banks since the great financial crisis from 2008 onwards. At the Q.E. A central bank buys large amounts of securities on the financial market in order to increase liquidity and the supply of money in the market and at the same time to lower market interest rates. The process of the Q.E. regularly leads to a significant inflation of the central bank balance sheets. Since the corresponding purchases are funded with reprinted central bank money, Q.E. an important aspect of the "monetary dilution".
- ReflationReflation usually describes the targeted financial or monetary "recapitalization" of an economy threatened by deflationary forces. The instrument of such reflation is usually the associated central bank, which feeds new money into the economic system through active money creation.
- RegTechRegTech services enable the agility and speed required to efficiently implement the flood of new regulations and use standardized approaches to take the specifics of different types of data into account. Innovative technologies such as big data and data visualization techniques as well as building blocks of artificial intelligence are used.
- RidehailingRidehailing is often described as a modern alternative to taxis. With these services (well-known examples are Uber and Lyft) a car with a driver is requested via an app, which transports people for a fee.
- Risk Parity ApproachRisk parity (or risk premium parity) is an approach to managing investment portfolios that focuses on allocating risk, with each asset contributing equally to the portfolio's overall risk.
- roboticsRobotics refers to mechanical concepts for transferring simple activities in production, transport or handling to appropriately configured machines (robots). In the future, robotics will also offer highly developed technological solutions that enable even complex interactions - such as caring for the elderly. Robotics is therefore directly related to topics such as technology and digitization, but also to society and demography.
- Secular stagnationThe term "secular stagnation" goes back to the US economist Alvin Hansen. In 1938, under the impression of the Great Depression of the 1930s, Hansen described a state of sustained weak economic growth with a low propensity to invest on the part of companies and falling income for the population. The current phase of persistent fragility and weak growth following the great financial crisis from 2008 is characterized by some scholars as "secular stagnation".
- SatoshiIn honor of the main inventor Satoshi Nakamoto, Satoshi is the name of the currently smallest Bitcoin unit, namely a 100 millionth Bitcoin. It is still unknown today which person or group of people is behind the pseudonym Satoshi Nakamoto.
- SBBS (Sovereign Bond-Backed Securities)SBBS ("Sovereign Bond-Backed Securities") describe a concept of the EU for the bundling and securitization of existing government bonds of the Eurozone. The aim is to create a synthetic European “safe asset” through appropriate “tranching”.
- Sharing economyThe sharing economy is the term used to describe the novel sociological phenomenon according to which younger people in particular only want certain consumer goods to be used, but not their possession or property. This principle is already evident today in various areas, such as housing, mobility, software and communication.
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