Glossary of Economic and Business Terms - S, Glossary of International Economics, Business and Economic Terms, Abbreviations, Terms List, MBA Exam

"S"

SA8000	A system of international labor standards and mechanisms for compliance and certification overseen by the nonprofit Social Accountability International with participation by corporations, unions, and NGOs.
Safeguard protection	Import protection provided under the Safeguards Clause.
Safeguards Clause	Article XIX of the GATT that permits countries to restrict imports if they cause injury. Restrictions must be for a limited time and nondiscriminatory. See escape clause.
SAI	Social Accountability International
Sanction	1. To approve or give permission for an action, as when an international organization sanctions the use of particular economic policies. 2. A coercive measure used by a nation or group of nations against another as a penalty for violating international law or international norms. Usually plural: sanctions.
Sanitary and phytosanitary regulations	Government standards to protect health, of humans, plants, and animals. SPS measures are subject to rules in the WTO to prevent them from acting as NTBs.
SAP	Structural adjustment program.
Satisficing	Seeking or achieving a satisfactory outcome, rather than the best possible. Contrasts with the optimizing behavior usually assumed in economics and trade theory. Alternative models based on satisficing are spreading within economics, but not yet much in international.
Say's Law	The proposition that "supply creates its own demand." The idea is clearest in a barter economy, where the act of supplying one thing is, intrinsically, the act of demanding something else. Named for Jean Baptiste Say, although he never stated it in this form.
Scale economies	Increasing returns to scale.
Scarce	Available in small supply; opposite of abundant. Usually meaningful only in relative terms, compared to demand and/or to supply at another place or time. See factor abundance, factor scarcity.
Scarce factor	The factor in a country's endowment with which it is least well endowed, relative to other factors, compared to other countries. May be defined by quantity or by price.
Scarcity rent	An economic rent that is due to something being scarce.
Schedule	1. A list. See tariff schedule. 2. A graph of a list of data; thus also a curve. See demand schedule.
Schengen Agreement	An agreement (later, convention) signed in 1985 to remove all frontier controls and permit free movement of persons between the participating countries. In 1999 it was incorporated into the European Union. As of 2007, there were 15 participants: all EU15 countries except Ireland and the U.K., plus Iceland and Norway.
Scientific tariff	A made-to-measure tariff.
Scitovszky indifference curve	An indifference curve for a group of individuals representing the minimum needed to keep all of them at given levels of utility. A well-behaved family of such indifference curves is defined holding utilities of all but one individual constant and varying only the one. These are useful in discussing the gains from trade. Due to Scitovszky (1942).
SDR	Special Drawing Right
SDRM	Sovereign Debt Restructuring Mechanism
Seasonal quota	A restriction on the quantity of imports of a good for a specified period of the year.
Seasonal tariff	A tariff that is levied at different rates at different times of the year, usually on agricultural products, being highest at the time of the domestic harvest.
Seattle Ministerial	The ministerial meeting of the WTO that was held in Seattle in November, 1999. It attracted a large group of protesters and ended without agreement among the participating countries.
Second best	Refers to what is the optimal policy when the true optimum (the first best) is unavailable due to constraints on policy choice. The Theory of Second Best says that a policy that would be optimal without such constraints (such as a zero tariff in a small country) may not be second-best optimal if other policies are constrained. See Lipsey and Lancaster (1956).
Second-best argument for protection	1. Any argument for protection that can be countered by pointing to a different and less distortionary policy that would achieve the same desired result at lower economic cost. 2. An argument for protection to partially correct an existing distortion in the economy when the first-best policy for that purpose is not available. For example, if domestic production generates a positive externality and a production subsidy to internalize it is not available, then a tariff may be second-best optimal.
Second theorem of welfare economics	The proposition of welfare economics that any Pareto optimal allocation can be attained by a competitive general equilibrium.
Secondary tariffs	Any charges imposed on imports in addition to the statutory tariff, such as an import surcharge.
Section 201	The escape clause of the U.S. Trade Act of 1974.
Section 301	The provision of U.S. trade law that permits private parties to seek redress through the U.S. government if their commercial interests have been harmed by illegal or unfair actions of foreign governments.
Securities	Stocks, bonds, and other tradable financial assets.
Seigniorage	The difference between what money can buy and its cost of production. Therefore, seigniorage is the benefit that a government or other monetary authority derives from the ability to create money. In international exchange, if one country's money is willingly held by another, the first country derives these seigniorage benefits. This is the case of a reserve currency.
Selective	Applied to a trade policy, this means one that affects only some countries, not all, in contrast to MFN policy. Selectivity is an important concern in the use of safeguards, which countries often would prefer to make selective but are required by GATT Article XIX to be nondiscriminatory.
Self-sufficiency	Provision by one's self of all of one's own needs. In international trade this means either not trading at all (autarky), or importing only non-necessities.
Self-sufficiency argument for protection	The view that a country is better off providing for its own needs than depending on imports. It may be based on fear that war or foreign governments will interrupt imports. This is a second-best argument, since many policies could provide for that contingency without sacrificing all the gains from trade.
Sensitive	In trade negotiations and agreements, countries often identify lists of particular sensitive products or sensitive sectors that they regard as especially vulnerable to import competition and that they wish to exempt from trade liberalization.
Sequential game	A game with multiple stages, played one after the other.
Serious injury	The injury requirement of the escape clause, understood to be more stringent than material injury but otherwise apparently not rigorously defined.
Service	1. A product that is not embodied in a physical good and that typically effects some change in another product, person, or institution. Contrasts with good. Trade in services is the subject of the GATS. 2. To make the scheduled payments on a debt, usually including both interest and amounts towards repayment of the principal. See debt service.
SEZ	Special economic zone.
Shadow exchange rate	1. The shadow price of foreign exchange. 2. What the market exchange rate would be in the absence of various market imperfections.
Shadow price	The implicit value or cost associated with a constraint. That is, the increased value that will be achieved by relaxing the constraint by one unit. When foreign exchange is rationed, the shadow price of foreign exchange becomes the relevant exchange rate for making decisions.
Shallow integration	Reduction or elimination of tariffs, quotas, and other barriers to trade in goods at the border, such as trade-limiting customs procedures. Contrasts with deep integration.
Shelf life	The length of time that a good can be stored while still remaining useful enough to sell. Important for both perishable goods and goods that may become obsolete for reasons of technology or fashion. Relevant for international trade when, for example, customs procedures cause delays.
Shock	1. An unexpected change. 2. Any change in an exogenous variable (although strictly speaking, models often fail to deal adequately with the complications of an exogenous change being expected).
Short	1. Used with "sell" or "sale," this means that the seller does not currently have the thing being sold, but intends to acquire it on the market prior to making delivery. 2. Used by itself as a verb, it means to sell short, as "to short a currency," meaning to sell it forward in anticipation that its value on the spot market will fall.
Short run	Referring to a short time horizon, usually one in which some aspects of behavior that would vary over a longer time do not have time to do so. In trade models, it usually means that the employment of some factors of production is fixed. Contrasts with long run.
Short-term	1. Happening within the short run, or within a matter of months. 2. In the case of bonds or capital flows, this refers to financial assets with a maturity of less than one year.
Short-term capital flow	A capital flow that is short-term; of interest because such capital flows are likely to be very liquid and therefore easily reversed and sources of instability in exchange markets.
Shrimp-Turtle Case	A case filed in the WTO against the United States for restricting imports of shrimp from countries whose shrimp were caught by means that endangered sea turtles. The WTO ruled against the U.S., enraging many environmentalists.
Shuttle trade	The trade accomplished by individuals and groups traveling to other countries, buying goods, and bringing them home, often in their luggage, to resell. An important source of imports for Russia in the 1990s, some people traveling abroad several times a month for this purpose.
Silver standard	A monetary system in which the value of a currency is defined in terms of silver. If two currencies are both on a silver standard, then the exchange rate between them is approximately determined by their two prices in terms of silver.
Singapore Issues	The issues on which it was agreed to form working groups at the Singapore Ministerial: trade and investment, competition policy, transparency in government procurement, and trade facilitation.
Singapore Ministerial	The first ministerial meeting of the WTO, held in Singapore in 1996. It did not attempt to launch a round of trade negotiations, but it agreed to form working groups on several Singapore Issues.
Single European Act	Treaty, signed in Luxembourg and The Hague and entering into force 1 July 1987, completing the Single Market. See Europe 1992.
Single Market	Removal of the remaining barriers among the countries of the European Union, permitting the free movement of goods, persons, services, and capital; also known as Europe 1992.
Single undertaking	A term, in trade negotiations, for requiring participants to accept or reject the outcome of multiple negotiations in a single package, rather than selecting among them.
Skill	The abilities acquired by workers through education, training, and experience that permit them to be more productive. Essentially the same as human capital.
Skill-biased	A technological change or technological difference that is biased in favor of using more skilled labor, compared to some definition of neutrality.
Skill intensive	Describing an industry or sector of the economy that relies relatively heavily on inputs of skilled labor, usually relative to unskilled labor, compared to other industries or sectors. See factor intensity.
Skilled labor	Labor with a high level of skill or human capital. Identified empirically as labor earning a high wage, with a high level of education, or in an occupational category associated with these; sometimes crudely proxied as nonproduction workers.
Slicing up the value chain	Term for fragmentation used by Krugman (1996).
Slump	A decline in performance, either of a firm as a slump in sales or profits, or of a country as a slump in output or employment.
SMAC function	An acronym for the CES function based on the names of the four authors who introduced it in Arrow et al. (1961).
Small country assumption	The assumption in an economic model that a country is too small to affect world prices, incomes, or interest rates.
Small open economy	An economy that is small enough compared to the world markets in which it participates that (as a good approximation) its policies do not alter world prices or incomes. The country is thus a price taker in world markets. The term is normally applied to a country as a whole, although it is sometimes used in the context of only a single product.
Smoot-Hawley Tariff	The Tariff Act of 1930, this raised average U.S. tariffs on dutiable imports to 53% and provoked retaliation by other countries.
Smuggle	To take a good across a national border illegally. If the good itself is legal, the purpose is usually to avoid paying a tariff or to circumvent some other trade barrier.
Snake	An arrangement in which currencies were pegged to each other but left free to float as a group against the U.S. dollar. Named for the graph that the limits of variation of a currency would follow over time.
Snake in the Tunnel	An arrangement used briefly in Europe after the collapse of the Bretton Woods System in which European currencies were permitted to vary ±1% against each other (the snake but ±2.25% against the dollar (the tunnel).
Social Accountability International	A U.S.-based nonprofit organization that develops and implements the SA8000 international workplace standards.
Social benefit	The benefit to society as a whole from an event, action, or policy change. Includes externalities and deducts any benefits that are transfers from others, in contrast to private benefit.
Social capital	The networks of relationships among persons, firms, and institutions in a society, together with associated norms of behavior, trust, cooperation, etc., that enable a society to function effectively.
Social cost	The cost to society as a whole from an event, action, or policy change. Includes negative externalities and does not count costs that are transfers to others, in contrast to private cost.
Social dumping	Export of a good from a country with weak or poorly enforced labor standards, reflecting the idea that the exporter has costs that are artificially lower than its competitors in higher-standards countries, constituting an unfair advantage in international trade.
Social indifference curve	A curve showing the combinations of goods that, when available to a country, yield the same level of social welfare.
Social welfare function	A function mapping allocations of goods to the individuals in an economy to a level of welfare for the economy as a whole. If it depends only on the levels of utility of the individuals rather than separately on the allocations, then it is a Bergsonian social welfare function.
SOE	1. State-owned enterprise. 2. Small open economy.
Soft currency	A currency that is not widely accepted in exchange for other currencies, in contrast to a hard currency.
Softwood lumber dispute	A trade dispute between the U.S. and Canada that has extended over many years. Canada's forest land is mostly owned by provincial governments, which charge a "stumpage fee" for lumber companies to harvest trees. The U.S. claims that this fee is too low and constitutes an illegal subsidy.
Sole importing agency	An entity, either private or government, that has been granted by government the exclusive right to import certain goods.
Solow model	The neoclassical growth model. Also called the Solow-Swan Model.
Solow neutral	A particular specification of technological change or technological difference that is capital augmenting.
Solow residual	A measure of technological progress equal to the difference between the rate of growth of output and the weighted average of the rates of growth of capital and labor, with factor income shares as weights. Due to Solow (1957). Also called the growth of total factor productivity. Used to compare sources of growth across countries.
Sound money	A currency that is responsibly managed so as to avoid excessive inflation.
Source country	See FDI.
Sovereign Debt Restructuring Mechanism	A framework proposed by the IMF for permitting countries facing financial crises to restructure their debts in an orderly manner and minimally disruptive manner, analogous to bankruptcy for a private debtor.
Sovereign spread	The spread on the debt of a sovereign government, and thus a measure of the riskiness of lending to it and the cost to it of borrowing.
Sovereignty	A country or region's power and ability to rule itself and manage its own affairs. Some feel that memberships in international organizations such as the WTO are a threat to their sovereignty.
Spaghetti bowl	Term frequently used by Bhagwati for the tangle of relationships created by multiple overlapping preferential trading arrangements.
Spatial arbitrage	Arbitrage on price differences in different locations.
Special and differential treatment	The GATT principle that developing countries be accorded special privileges, exempting them from some requirements of developed countries. It also permits tariff preferences among developing countries and by developed countries in favor of developing countries, as under the GSP.
Special Drawing Right	Originally intended within the IMF as a sort of international money for use among central banks pegging their exchange rates, the SDR is a transferable right to acquire another country's currency. Defined in terms of a basket of currencies, today it mainly plays the role of a unit of international account.
Special economic zone	These exist in several countries, including especially China, and their characteristics vary. Typically they are regions designated for economic development oriented toward inward FDI and exports, both fostered by special policy incentives that may include being an EPZ.
Special entry procedure	An administrative procedure that is required as a condition of entry for an imported good, such as transport by the importing country's national fleet, or entry through a specific port or customs station.
Special safeguard	As part of the Agreement on Agriculture of the WTO, a special provision for providing safeguard protection to specified agricultural products that had been subject to tariffication.
Specialization	1. Producing more than you need of some things, and less of others, hence "specializing" in the first. In international trade, this is just the opposite of self-sufficiency. 2. Doing less than everything, as when a country produces fewer different goods than it consumes. In a 2x2 trade model, this means a country produces just one good. With many goods and countries, it means a country has some goods that it does not (and cannot competitively) produce. Also may be called complete specialization.
Specie	Coins, normally including only those made of precious metal.
Specie flow mechanism	Under the gold standard, the mechanism by which international payments would adjust. A country with high inflation would export less, import more, and thus lose specie, i.e., gold. With the money supply fixed to the quantity of gold, the resulting monetary contraction would reduce prices. Due to David Hume.
Specific commitment	Under the GATS, the identification of a category of services in which a country will apply national treatment and assure market access for foreign service providers.
Specific factor	A factor of production that is unable to move into or out of an industry. The term is used to describe factors that would not be of any use in other industries and also -- more loosely -- factors that could be used elsewhere but do not, in the short run, have the time or resources needed to move. See specific factors model. The term seems to come from Haberler (1937).
Specific factors model	A model in which some or all factors are specific factors. The most common version is the Ricardo-Viner Model, with one specific factor (often capital or land) in each industry plus another factor (often labor) that is mobile between them. But an extreme form of the model, the Cairnes-Haberler Model, has all factors specific.
Specific tariff	A tariff specified as an amount of currency per unit of the good.
Specificity	The property that a policy measure applies to one or a group of enterprises or industries, as opposed to all industries.
Specificity rule	The principle that the optimal policy for correcting a distortion is one that deals most directly, or specifically, with that distortion.
Speculation	The purchase or sale of an asset (or acquisition otherwise of an open position) in hopes that its price will rise or fall respectively, in order to make a profit. See destabilizing speculation and stabilizing speculation.
Speculative attack	In any asset market, the surge in sales of the asset that occurs when investors expect its price to fall. A common phenomenon in the exchange market, especially under an adjustable pegged exchange rate.
Speculator	Anyone who engages in speculation. May include those who transfer their assets into different forms (or currencies) in order to avoid a prospective capital loss.
Splintering	Another term for fragmentation. Used by Bhagwati (1984).
Spoke	See hub and spoke integration.
Sporadic dumping	Intermittent dumping.
Spot	On the spot market.
Spot market	A market for exchange (of currencies, in the case of the exchange market) in the present (as opposed to a forward or futures market in which the exchange takes place in the future).
Spot rate	The exchange rate on the spot market. Also called the spot exchange rate.
Spread	1. The difference between the price one must pay to buy something, such as a currency, and the price one receives for selling it. 2. The difference between the interest rate on a bond and the risk free rate; thus the risk premium on the bond.
SPS	Sanitary and phytosanitary
SST	Stolper-Samuelson Theorem
Stability and Growth Pact	The 1997 agreement among the countries participating in the EMU to coordinate their fiscal policies in a way that would limit budget deficits and debt.
Stabilization policy	The use of monetary and fiscal policies to stabilize GDP, aggregate employment, and prices.
Stabilize	To reduce the size of fluctuations in an economic variable over time. Examples include stabilizing exchange rates by exchange market intervention; stabilizing the price of a commodity by operation of a buffer stock; and stabilizing GDP by macroeconomic stabilization policy.
Stabilizing speculation	Speculation that decreases the movements of the price in the market where the speculation occurs. See destabilizing speculation. Friedman (1953) provided a classic argument that speculation on a floating exchange rate would be stabilizing.
Stable	1. Of an equilibrium, that the dynamic adjustment away from equilibrium converges to the equilibrium. 2. Of an economic variable, not subject to large or erratic fluctuations.
Stackelberg equilibrium	A game theoretic equilibrium in which one player acts as a leader and another as a follower, the leader setting strategy taking account of the follower's optimal response. Contrasts with Nash equilibrium in which both players take the other's strategy as given.
Stamp fee	See para tariff.
Standard	Rule and/or procedure specifying characteristics that must be met for a product to be sold in a country's domestic market, typically to protect health and safety. When a standard puts foreign producers at a disadvantage, it may constitute an NTB.
Standard error	A common measure of the uncertainty associated with a numerical estimate. In a regression analysis, standard errors are often reported with (or below) the coefficient estimates. As a rough rule of thumb, one can be 95% confident that the true coefficient is within ±2 standard errors of the estimate.
Standard of living	Usually refers to a country's per capita income, but sometimes takes account also of additional conditions that matter for a person's or household's wellbeing, such as leisure or the quality of the environment.
Standstill	1. A commitment to refrain from introducing new measures that are not consistent with an agreement. 2. In the Uruguay Round, the agreement not to introduce new GATT-inconsistent trade-restricting and trade-distorting measures during the negotiations. See rollback.
State bank	A bank owned by government, other than the central bank, and performing the same functions as a commercial bank. State banks are often directed by their governments to provide credit to activities or persons favored by the government.
State-owned enterprise	A firm owned by government. Relations between SOEs and private firms on international markets raise special problems for GATT, since SOEs may not respond normally to market forces and their actions may reflect government policies.
State trading enterprise	An entity of government that is responsible for exporting and/or importing specified products. See marketing board.
Static gains from trade	The economic benefits from trade that arise in static models, including the efficiency gains from exploiting comparative advantage, the reduced costs from scale economies, reduction in distortion from imperfect competition, and increased product variety. Contrasts with dynamic gains from trade.
Static model	An economic model that has no explicit time dimension. A static model abstracts from the process by which an equilibrium or an optimum might be reached only over time, as well as from the dependence of the variables in the model itself on a changing past or future. Contrasts with dynamic model.
Statistical tax	See para tariff.
Status quo	The current situation. A preference for the status quo means a reluctance to change.
Steady state	A type of equilibrium, especially in a neoclassical growth model, in which those variables that are not constant grow over time at a constant and common rate.
Sterilize	To use offsetting open market operations to prevent an act of exchange market intervention from changing the monetary base. With sterilization, any purchase of foreign exchange is accompanied by an equal-value sale of domestic bonds, and vice versa.
Stochastic	Random; arising from a process that generates different values each with some probability.
Stock	A share in the ownership of a corporation.
Stockpiling	The storage of something in order to have it available in the future if the need for it increases. In international economics, stockpiling occurs for speculative purposes; by governments to provide for national security; and by central banks managing international reserves.
Stolper-Samuelson derivative	In general equilibrium, the effect of a small change in the price of a single good on the price of a factor of production.
Stolper-Samuelson Theorem	1. The proposition of the Heckscher-Ohlin Model that a rise in the relative price of a good raises the real wage of the factor used intensively in that industry and lowers the real wage of the other factor. 2. The further proposition (requiring addition assumptions) that protection raises the real wage of a country's scarce factor and lowers the real wage of its abundant factor. Due to Stolper and Samuelson (1941).
Straight-line PPF	The PPF that arises in the Ricardian Model, or in the HO Model �if the two sectors have the same factor intensity. It is a downward sloping straight line with, therefore, a constant marginal rate of transformation.
Strategic industry argument for a tariff	The view that an industry serves a special "strategic" purpose in an economy and needs to be protected by a tariff to prevent it from disappearing. Views of what constitutes a strategic purpose are often vague and contradictory.
Strategic trade policy	The use of trade policies, including tariffs, subsidies, and even export subsidies, in a context of imperfect competition and/or increasing returns to scale to alter the outcome of international competition in a country's favor, usually by allowing its firms to capture a larger share of industry profits. The seminal contribution was Brander and Spencer (1981).
Strategic trade policy argument for a tariff	In an example of strategic trade policy, the use of a tariff to extract monopoly profits from a foreign monopolist, or to shift profit from foreign to domestic competitors in an international oligopoly. The monopoly case seems to have originated with Katrak (1977), but the classic treatment of the larger issue is Brander and Spencer (1984).
Strategic variable	An economic variable that is chosen with regard to, and sometimes with a view to influencing, economic behavior by someone else. Most frequently refers to the choice of firms in an oligopoly.
Strategy	In game theory, a set of actions and contingent actions for the several stages of a sequential game, that is, a plan of action for each stage contingent on the outcome of preceeding stages.
Structural adjustment	The reallocation of resources (labor and capital) among sectors of the economy in response to changing economic circumstances, including trading conditions, or changes in policy.
Structural adjustment program	The list of budgetary and policy changes required by the IMF and World Bank in order for a developing country to qualify for a loan. This "conditionality" typically includes reducing barriers to trade and capital flows, tax increases, and cuts in government spending.
Structural Impediments Initiative	A 1990 agreement between the United States and Japan to reduce their bilateral trade imbalance. Among other commitments, the U.S. promised to reduce its budget deficit and encourage saving, while Japan promised to increase spending and facilitate entry of new businesses.
Structure of protection	The pattern of protection across sectors of an economy: which sectors are highly protected and which not, perhaps in terms of effective protection, or - even better - in terms of their expansion and contraction that would occur if all protection were removed.
Stumbling block	The term that Bhagwati (1991) used, together with building block, to address whether PTAs help move the world toward or away from multilateral free trade.
Subcontracting	Delegation by one firm of a portion of its production process, under contract, to another firm, including in another country. A form of fragmentation.
Subgame	A portion of a game that is itself a game.
Subgame perfect	Said of a Nash equilibrium �if the portions of the strategies of that equilibrium that pertain to each subgame are also Nash for their subgame. This is a useful refinement of Nash equilibrium in that it rules out strategies that are not credible for subgames.
Subsidiary	A firm that is owned and ultimately controlled by another firm. Thus a multinatiol conarporation has a parent in once country and one or more subsidiaries in others.
Subsidy	A payment by government, perhaps implicit, to the private sector in return for some activity that it wants to reward, encourage, or assist. Under WTO rules, subsidies may be prohibited, actionable, or non-actionable.
Substitute	One good is a substitute for another if an increase in demand for one (or a fall in its price) causes a decrease in demand for the other.
Substitute in production	One good is a substitute for another in production if an increase in output of one (or a rise in its price) causes a decrease in output of the other.
Substitution effect	That portion of the effect of price on quantity demanded that reflects the changed tradeoff between the good and other alternatives. Contrasts with income effect.
Sunk cost	A cost that has already been incurred and cannot be reversed, which therefore cannot be avoided by current or future action. Sunk costs should therefore be irrelevant to current decisions.
Sunset clause	A provision within a piece of legislation providing for its expiration on a specified date unless it is deliberately renewed.
Sunset industry argument	The argument, in contrast to the infant industry argument, that a mature industry should be provided protection, either to help it restore its competitiveness, or to cushion its exit from the economy.
Super 301	A U.S. law authorizing USTR to identify the most significant unfair trade practices confronting U.S. exports and to seek to eliminate them. In contrast to Section 301, this does not require a private party to initiate the action.
Superior good	A good the demand for which is income elastic.
Supernatural trading bloc	A trading bloc among countries that are natural trading partners but that, because its tariff preferences are too extreme or transport costs with the outside world are too low, reduces world welfare. Due to Frankel (1997).
Supply	1. The act of offering a product for sale. 2. The quantity offered for sale. 3. The quantities offered for sale at various prices; the supply curve.
Supply chain	The sequence of steps, often done in different firms and/or locations, needed to produce a final good from primary factors, starting with processing of raw materials, continuing with production of perhaps a series of intermediate inputs, and ending with final assembly and distribution.
Supply curve	The graph of quantity supplied as a function of price, normally upward sloping, straight or curved, and drawn with quantity on the horizontal axis and price on the vertical axis. Supply curves for exports and for foreign exchange usually have the same qualitative properties as supply curves for labor, being potentially backward bending.
Supply elasticity	The elasticity of a supply function, usually with respect to price.
Supply function	The mathematical function explaining the quantity supplied in terms of its various determinants, including price; thus the algebraic representation of the supply curve.
Supply price	The price at which a given quantity is supplied; the supply curve viewed from the perspective of price as a function of quantity.
Supply side	Anything that contributes to supply, as opposed to demand, in a market or, especially, in the aggregate economy; aggregate supply.
Supranational	Transcending nations, especially through organizations that encompass more than one nation, such as the European Union
Surplus	In the balance of payments, or in any category of international transactions within it, the surplus is the sum of credits minus the sum of debits. Also called simply the "balance" for that category. Thus the balance of trade is the same as the surplus on trade, or the trade surplus, and similarly for merchandise trade, current account, and capital account.
Sustainable development	Economic development that is achieved without undermining the incomes, resources, or environment of future generations.
Swan diagram	A diagram illustrating the conflict between internal balance and external balance as they respond to its fiscal deficit and its costs relative to the world (and thus its exchange rate.) Due to Swan (1955).
Swap	1. In exchange markets, this is a simultaneous sale of a currency on the spot market together with a purchase of the same amount on the forward market. By combining these two transactions into a single one, transactions costs may be reduced. 2. An arrangement between central banks whereby they each agree to lend their currency to the other.
Swap rate	The difference between the spot and forward exchange rates. Thus the price of a swap.
Sweatshop	A manufacturing workplace that treats its workers inhumanely, paying low wages, imposing harsh and unsafe working conditions, and demanding levels of performance that are harmful to the workers.
Swiss formula	A formula devised during the Tokyo Round for reducing tariffs in a manner that would harmonize them. The formula is tnew=(told´M)/(told+M), where the t's are the new and old tariffs, in percent, and M is a number that turns out to be the maximum possible new tariff. Somebody, presumably Swiss, was very clever!

(DOU 18082007)