The macro glossary
28 terms, two sentences each, no filler — and where the concept lives on the atlas.
Policy rate
The interest rate a central bank charges banks for short-term funds — the anchor every other rate in the economy prices off. Set by rate decisions a handful of times a year.
Real interest rate
A nominal interest rate minus inflation. Positive means money earning that rate gains purchasing power; negative means it loses even while the balance grows.
Mortgage rate
The interest rate on loans secured by housing. Statistics agencies report the average rate on NEW loans, which reacts to policy changes far faster than the average across all outstanding loans.
Annuity loan
A loan repaid in equal instalments: early payments are mostly interest, later ones mostly principal. The standard mortgage form in most of Europe.
CPI (Consumer Price Index)
The price of a fixed basket of consumer goods and services over time. Its yearly change is what people mean by "inflation".
HICP
The EU’s Harmonised Index of Consumer Prices — a CPI computed the same way in every member state, so inflation is comparable across the union. The ECB’s target refers to it.
Core inflation
Inflation excluding energy and food, the most volatile components. Central banks watch it to separate a trend from a spike.
Inflation target
The inflation rate a central bank steers toward — 2 % in most advanced economies. Persistent misses in either direction trigger rate moves.
Disinflation
Inflation falling while still positive — prices rise more slowly. Distinct from deflation, where the price level actually falls.
Deflation
A falling general price level. Sounds pleasant, but it raises the real burden of every debt and can stall spending as buyers wait for lower prices.
Hyperinflation
Inflation so fast that money stops working as a store of value — conventionally 50 % per MONTH. Historic cases: Weimar Germany, Zimbabwe, Venezuela.
Purchasing power
What a unit of money actually buys. Inflation is precisely the rate at which purchasing power erodes.
GDP
Gross domestic product: the market value of everything an economy produces in a period. Its inflation-adjusted growth rate is the standard measure of whether an economy is expanding.
GDP per capita
GDP divided by population — the rough income level of a country. Comparisons across countries use a common currency (USD) or purchasing-power adjustment.
Purchasing power parity (PPP)
An exchange-rate adjustment that equalises what money buys across countries, so income comparisons reflect living standards rather than currency swings.
Unemployment rate
The share of the labour force actively seeking work without finding it. People outside the labour force — students, retirees, the discouraged — are not counted.
Government debt (% of GDP)
What the state owes, measured against the economy’s size — the ratio matters more than the amount, because GDP is what services the debt.
Budget deficit
The gap when a government spends more in a year than it collects. Deficits accumulate into debt; a surplus pays it down.
Money supply (M2, M3)
Broad measures of money in the economy: cash plus deposits and near-money. Rapid expansion beyond economic growth has historically preceded inflation.
Central bank balance sheet
The assets a central bank holds — swollen by QE bond-buying. Its size signals how much money creation has supported markets and governments.
Quantitative easing (QE)
A central bank creating money to buy bonds, pushing long rates down when the policy rate hits bottom. The reverse — letting bonds mature unreplaced — is quantitative tightening.
Yield curve
Interest rates plotted across loan maturities. It normally slopes upward; an inverted curve (short rates above long) has preceded most recessions.
Currency depreciation
A currency losing value against others. Imports get dearer (imported inflation); exports get cheaper for foreigners.
House price index
Residential property prices tracked as an index (a base year = 100), so places with different price levels can be compared by their price DEVELOPMENT.
Tax wedge
The share of total labour cost taken by income tax and social contributions — the gap between what an employer pays and the worker keeps. The OECD’s standard comparison uses a single average earner.
VAT / GST
A consumption tax collected at every stage of production but ultimately paid by the final buyer. Rates and exemptions differ enormously by country.
Capital gains tax
Tax on the profit from selling an asset — shares, property, currency. Rules on rates, exemptions and holding periods vary more across countries than almost any other tax.
Choropleth map
A map where whole areas are coloured by a value — the atlas’ own front page. Good for country-level comparison; misleading when area size is confused with importance.