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The 2020 stock market crash is a global stock market crash that began on 20 February, 2020. On 12 February, the Dow Jones Industrial Average, the NASDAQ Composite, and S&P 500 Index all finished at record highs (while the NASDAQ and S&P 500 reached subsequent record highs on 19 February). From 24 to 28 February, stock markets worldwide reported their largest one-week declines since the 2008 financial crisis, thus entering a correction. Global markets into early March became extremely volatile, with large swings occurring in global markets. On 9 March, most global markets reported severe contractions, mainly in response to the 2019–20 coronavirus pandemic and an oil price war between Russia and the OPEC countries led by Saudi Arabia. This became colloquially known as Black Monday I, and at the time was the worst drop since the Great Recession in 2008.

Three days after Black Monday I there was another drop, Black Thursday, where stocks across Europe and North America fell more than 9%. Wall Street experienced its largest single-day percentage drop since Black Monday in 1987, and the FTSE MIB of the Borsa Italiana fell nearly 17%, becoming the worst-hit market during Black Thursday. Despite a temporary rally on 13 March (with markets posting their best day since 2008), all three Wall Street indexes fell more than 12% when markets re-opened on 16 March. At least one benchmark stock market index in all G7 countries and 14 of the G20 countries have been declared to be in bear markets.

As of March 2020, global stocks have seen a downturn of at least 25% during the crash, and 30% in most G20 nations. Goldman Sachs has warned that the US GDP will shrink 29% by the end of the 2nd quarter of 2020, and that unemployment may skyrocket to at least 9%. Australian Prime Minister Scott Morrison has called the looming economic crisis 'akin to the Great Depression'.

The Alchian–Allen effect was described in 1964 by Armen Alchian and William R Allen in the book University Economics (now called Exchange and Production). It states that when the prices of two substitute goods, such as high and low grades of the same product, are both increased by a fixed per-unit amount such as a transportation cost or a lump-sum tax, consumption will shift toward the higher-grade product. This is because the added per-unit amount decreases the relative price of the higher-grade product.

Suppose, for example, that high-grade coffee beans are $3/pound and low-grade beans $1.50/pound; in this example, high-grade beans cost twice as much as low-grade beans. Now add a per-pound international shipping cost of $1. The effective prices are now $4 and $2.50; high-grade beans now cost only 1.6 times as much as low-grade beans. This reduced ratio of difference will induce distant coffee-buyers to now choose a higher ratio of high-to-low grade beans than local coffee-buyers.

The effect has been studied as it applies to illegal drugs and it has been shown that the potency of marijuana increased in response to higher enforcement budgets, and there was a similar effect for alcohol in the U.S. during Prohibition. This effect is called iron law of prohibition.

Another example is that Australians drink higher-quality Californian wine than Californians, and vice versa, because it is only worth the transportation costs for the most expensive wine.

Colloquially, the Alchian–Allen theorem is also known as the “shipping the good apples out” theorem (Thomas Borcherding), or as the “third law of demand.”

In social choice theory, Arrow's impossibility theorem, the general possibility theorem or Arrow's paradox is an impossibility theorem stating that when voters have three or more distinct alternatives (options), no ranked voting electoral system can convert the ranked preferences of individuals into a community-wide (complete and transitive) ranking while also meeting a specified set of criteria: unrestricted domain, non-dictatorship, Pareto efficiency, and independence of irrelevant alternatives. The theorem is often cited in discussions of voting theory as it is further interpreted by the Gibbard–Satterthwaite theorem. The theorem is named after economist and Nobel laureate Kenneth Arrow, who demonstrated the theorem in his doctoral thesis and popularized it in his 1951 book Social Choice and Individual Values. The original paper was titled "A Difficulty in the Concept of Social Welfare".

In short, the theorem states that no rank-order electoral system can be designed that always satisfies these three "fairness" criteria:

• If every voter prefers alternative X over alternative Y, then the group prefers X over Y.
• If every voter's preference between X and Y remains unchanged, then the group's preference between X and Y will also remain unchanged (even if voters' preferences between other pairs like X and Z, Y and Z, or Z and W change).
• There is no "dictator": no single voter possesses the power to always determine the group's preference.

Cardinal voting electoral systems are not covered by the theorem, as they convey more information than rank orders. However, Gibbard's theorem extends Arrow's theorem for that case. The theorem can also be sidestepped by weakening the notion of independence.

The axiomatic approach Arrow adopted can treat all conceivable rules (that are based on preferences) within one unified framework. In that sense, the approach is qualitatively different from the earlier one in voting theory, in which rules were investigated one by one. One can therefore say that the contemporary paradigm of social choice theory started from this theorem.

The practical consequences of the theorem are debatable: Arrow has said "Most systems are not going to work badly all of the time. All I proved is that all can work badly at times."

"Assume a can opener" is a catchphrase used to mock economists and other theorists who base their conclusions on unjustified or oversimplified assumptions.

The phrase derives from a joke which dates to at least 1970 and possibly originated with British economists. The first book mentioning it is likely Economics as a Science (1970) by Kenneth E. Boulding:

There is a story that has been going around about a physicist, a chemist, and an economist who were stranded on a desert island with no implements and a can of food. The physicist and the chemist each devised an ingenious mechanism for getting the can open; the economist merely said, "Assume we have a can opener"!

The phrase was popularized in a 1981 book and has become sufficiently well known that many writers on economic topics use it as a catchphrase without further explanation.

Basic income, also called universal basic income (UBI), citizen's income, citizen's basic income in the United Kingdom, basic income guarantee in the United States and Canada, or basic living stipend or guaranteed annual income or universal demogrant, is a governmental public program for a periodic payment delivered to all on an individual basis without means test or work requirement. The incomes would be:

• Unconditional: A basic income would vary with age, but with no other conditions. Everyone of the same age would receive the same basic income, whatever their gender, employment status, family structure, contribution to society, housing costs, or anything else.
• Automatic: Someone's basic income would be automatically paid weekly or monthly into a bank account or similar.
• Non-withdrawable: Basic incomes would not be means-tested. Whether someone's earnings increase, decrease, or stay the same, their basic income will not change.
• Individual: Basic incomes would be paid on an individual basis and not on the basis of a couple or household.
• As a right: Every legal resident would receive a basic income, subject to a minimum period of legal residency and continuing residency for most of the year.

Basic income can be implemented nationally, regionally or locally. An unconditional income that is sufficient to meet a person's basic needs (at or above the poverty line) is sometimes called a full basic income while if it is less than that amount, it is sometimes called partial. A welfare system with some characteristics similar to those of a basic income is a negative income tax in which the government stipend is gradually reduced with higher labour income. Some welfare systems are sometimes regarded as steps on the way to a basic income, but because they have conditionalities attached they are not basic incomes. If they raise household incomes to specified minima they are called guaranteed minimum income systems. For example, Bolsa Família in Brazil is restricted to poor families and the children are obligated to attend school.

Several political discussions are related to the basic income debate. Examples include the debates regarding robotization, artificial intelligence (AI), and the future of work. A key issue in these debates is whether robotisation and AI will significantly reduce the number of available jobs. Basic income often comes up as a proposal in these discussions.

Baumol's cost disease (or the Baumol effect) is the rise of salaries in jobs that have experienced no or low increase of labor productivity, in response to rising salaries in other jobs that have experienced higher labor productivity growth. This pattern seemingly goes against the theory in classical economics in which real wage growth is closely tied to labor productivity changes. The phenomenon was described by William J. Baumol and William G. Bowen in the 1960s.

The rise of wages in jobs without productivity gains is from the requirement to compete for employees with jobs that have experienced gains and so can naturally pay higher salaries, just as classical economics predicts. For instance, if the retail sector pays its managers 19th-century-style salaries, the managers may decide to quit to get a job at an automobile factory, where salaries are higher because of high labor productivity. Thus, managers' salaries are increased not by labor productivity increases in the retail sector but by productivity and corresponding wage increases in other industries.

Bitcoin (₿) is a cryptocurrency. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.

Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its source code was released as open-source software. Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. Research produced by University of Cambridge estimates that in 2017, there were 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.

Bitcoin has been criticized for its use in illegal transactions, its high electricity consumption, price volatility, and thefts from exchanges. Some economists, including several Nobel laureates, have characterized it as a speculative bubble. Bitcoin has also been used as an investment, although several regulatory agencies have issued investor alerts about bitcoin.

Braess' paradox is the observation that adding one or more roads to a road network can slow down overall traffic flow through it. The paradox was postulated in 1968 by German mathematician Dietrich Braess, who noticed that adding a road to a particular congested road traffic network would increase overall journey time.

The paradox may have analogies in electrical power grids and biological systems. It has been suggested that in theory, the improvement of a malfunctioning network could be accomplished by removing certain parts of it. The paradox has been used to explain instances of improved traffic flow when existing major roads are closed.

This is a category of jobs that have been rendered obsolete due to advances in technology and/or social conditions.

A celebrity bond is commercial debt security issued by a holder of fame-based intellectual property rights to receive money upfront from investors on behalf of the bond issuer and their celebrity clients in exchange for assigning investors the right to collect future royalty monies to the works covered by the intellectual property rights listed in the bond. Typically backed by music properties, the investment vehicle was pioneered in 1997 by rock and roll investment banker David Pullman through his $55 million David Bowie bond deal.