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Aid Worker
An aid worker is a person on a trip of self discovery to exotic places at the taxpayer's expense.

Altruism
We know that people in different countries behave more or less altruistically (drop a wallet and the difference is noticeable). Since economics has no use for real world social behavior, economics textbook are not encumbered with such irrelevances as altruism.

Bank Managers
Speculators who gamble with other people's money, pocket the gains and transfer the losses to shareholders and the taxpayer.

Banks
According to economic textbooks, banks collect savings from the public and transfer them to firms that invest the money in productive activities. In actual fact, they "invest" these savings in government bonds and other speculative assets.

Chicago School
Adherents of the Chicago School believe that markets would operate perfectly were it not for state regulations that foul them up. The failure of unregulated or deregulated markets on the other hand - such as the financial markets - is invariably attributed to missing regulations.

Competition
In classical economics, competition ensures that resources go to those who can make the most of them. This leads to allocative efficiency and, more importantly, erodes excess profits. Innovation yields high profits that are subsequently eroded through competition. This process is driving the productivity and income growth of the capitalist system. Mainstream economists have no use for competition. In their models firms have exploited all potential efficiency gains and inventions and innovations fall from heaven.

Competition
Economists are convinced that activities not exposed to market competition are delivered inefficiently. This analysis is never applied to what economists do.

Consumer choice
Consumers have constant preferences, perfect information and all the power of computation necessary to evaluate all the possible options they have - that, at least, you learn from economic textbooks. You are lucky you find in your economics department some fringe figure located at the end of corridor next to the bathroom who tells you these assumptions lead you seriously astray in important fields such as health, finance and savings and that policy recommendations based on these assumptions may actually reduce welfare.

Corruption
Corruption is unknown in the economics profession since there is nothing illegal about testimonies and reports blatantly biased in favor of those who commission them.

Development Aid
Originally, development aid was supposed to improve the productivity of the inhabitants of the Third World. One of the best established findings in economics is that development aid did nothing of the sort. This does not stop the some economists from clamoring for more. Their behavior is entirely uninfluenced by the fact that a part of it flows their way in form of large payments for travel allowances, consultancy reports and research funds.

Development Economics
Fell on hard times and came low in the pecking order of economics since its practitioners were supposed to have some knowledge of the societies they dealt with. Fortunately, this prerequisite has now fallen by the wayside with the advent of the new wave of development enthusiasm and economists who manage to become country experts in a couple of days after the motto "been to China twice".

Development Expert
A development expert is someone who is developed by means of large amounts of aid money.

Econometrics
A branch of metaphysics; it transposes empirical data into speculations that have no known bearings on any observed economic relationships. It is the modern equivalent of calculating how many angels can dance on the head of a pin.

Economic Development
A field that reached its peak with the publication of the Wealth of Nations in 1776 and has gone downhill ever since. From time to time readers stumble over some of his insights and generate a new fashion in economics. Adam Smith's human capital theory was rediscovered by T.W. Shultz and got him (Shultz, not Smith) a Nobel Prize. The World Bank rediscovered that the nature and kind of government has something to do with growth. They called it Governance but haven't got the Nobel yet.

Economic Forecasting
Since future behavior of humans is unknowable - it is impossible to know the future preferences of human beings - economic forecasting predicts the future correctly only by accident and has no greater scientific standing than astrology. Were the market for forecasting to operate efficiently, the low-cost provider "astrology" would have put the high cost provider "economic forecasting" out of business long ago. Fortunately, the economic profession is a proficient rent-seeker and subsidies continue to flow into the failed profession.

Economic Growth
Economic growth is a long term issue that does not concern mainstream economists since "in the long run we are all dead".

Economic History
A subject that has been expunged from the canon of economic teaching and research on the ground that explaining singular events is not amenable to statistical procedures - quite apart from involving knowledge about the real world.

Economic Language
The language of economics is increasingly mathematical. The reason is simple. If transformed into common language it would be blindingly obvious that the ideas contained in most economic theories are either unoriginal or utterly trivial or both.

Economic Man
Maximizing one's self-interest leads to the greatest degree of welfare of the person concerned. Economists conclude from this that any witless creature not following this path is unworthy to occupy a position of social responsibility.

Economic Planning
By 1940 the majority of economists held that a planned economy was perfectly feasible, the arguments of its critics without force, the difficulties of monitoring state firms and of acquiring the necessary knowledge to conduct efficient planning much exaggerated.[i] When planning had manifestly failed in 1989 they had known all along that Socialist Planning didn't work. Yet there are still some who continue in the old vein to advocate the virtue of planning on a smaller scale, claiming that some additional pieces of legislation would produce an efficient national health system.

Economic Theory
Builds mathematical models on the basis of simplifying assumptions about the behavior of market participants, of a limited number of additional variables and of assumed functional forms. These models habitually fail to predict and explain - which provides excellent reasons to do more of the same.

Economists
Academics that unsuccessfully engage in predicting the future and fail to agree on the causes of past economic developments.

Efficiency
Undergraduates were taught (before the advent of modern textbooks) that efficiency means getting maximum output from a given input. Since economists produce output whose marginal product is largely negative (resources are employed in disseminating results that are of no value to anyone), the term has fallen into disuse.

Efficient Markt Hypothesis
When is a market efficient? According to some, it is efficient if a person without insider knowledge is unable to predict future prices: future market prices follow a random walk. Most people believe financial markets are reasonably efficient in this sense. Unfortunately, efficient markets were also defined differently. A whole lot of economists claimed that financial markets priced assets “correctly”, reflecting long run fundamentals such as future earning power. The dot-com-bubble wasn’t enough to explode this myth. Will the current financial crisis finally persuade analysts that asset prices follow a random walk: the way of the drunk on the way home?

Empirical Research
A mugs game where quantitative economists analyze data of dubious quality with dubious methods and increasingly without any theoretical guidance. Their findings are then going to be disproved by the next test using slightly different data sets and other dubious methods. Despite 30 years of research no findings of any significance - contributing to the understanding of the economy - have emerged yet.

Entrepreneur
Entrepreneurs embark on innovations and take personal risks in doing so. They have long been considered the moving force of capitalism and the supply of entrepreneurship was deemed a vital factor in explaining the wealth of nations. Not so modern economics - since the supply of entrepreneurship depends of social factors economists have nothing to say on the topic and therefore prefer not to mention entrepreneurs in their teaching at all.

Ethics
Ethics is a field that has been imposed on the profession by the misguided public and has never been accepted by economists as a serious subject of inquiry. Since markets are perfect, each participant goes bust if she deviates in pricing, production and employment decisions from what markets dictate. There is therefore no room for ethics at all.

Ethics
Ethics is a field staffed with would-be philosophers who refuse to acknowledge that in the real world business decisions constantly confront moral dilemmas. This conveniently allows professors of ethics to give cheap advice and accuse businesspeople of acting unethically whatever they do.

Exchange Rates
Exchange rates are the mysterious prices of currencies. There are no theories of the exchange rates because the assumptions of economics are unable to deal with actually observed human behavior such as rapidly changing expectations. This does not stop economists from integrating exchange rate movements in their models.

Experimental Economics
Experimental economics suggests that people sometimes behave in ways incompatible with rationally maximizing monetary gains. Since such behavior disrupts the ease of modeling, it is presumed to have no relevant effects on the operation, stability and success of the economic system we live in.

Finance
Finance is a field in economics that is supposed to analyze the operation of financial markets. That professors of finance have little knowledge of their subject has been amply proved by their failure to predict the current financial crisis. Since knowledge of actual business processes has never been a criterion of employment and promotion in the field of financial economics, this is unlikely to change.

Financial Regulation
Designed to increase the profits of banks by approving new financial products that increase the level of disinformation among the public and legalize dissimulation and fraud.

Financial Supervision
Institutions where bank managers regulate their scope for misappropriating funds.

Firms
In economic theory, firms appear and disappear from nowhere like ghosts in a mystery tale. Thus in a recession firms vanish but appear again after it is over and therefore recessions have as little impact on production in the long.

Fiscal Drag
Fiscal drag is a way for the government to make money through inflation. How? If your income goes up because of inflation, you end up in higher income tax brackets even if your real income remains constant – something often described as “bracket creep”. A similar effect operates on savings. An increase in the inflation rate reduces what’s left of the after-tax interest payments.

Foreign Private Debt
Debt incurred abroad by private individuals is not something an economist worries about. After all, these funds will surely be invested and will generate the funds to service the debt. The U.S. housing bubble is of course entirely irrelevant for the argument, since it was caused by faulty regulations.  

GDP per head of the population
A measure to establish the amount of goods and services available per head of the population. Economists teach that an increase in the GDP per head improves economic welfare. Hence if the burden of regulation increases and more regulators are employed and more people in firms are busy complying with the regulations, we are better off. When the crime rate increases and we "consume" more security services and spend less on food and leisure activities, economists report no change in welfare.

Government Debt
Is not really debt at all and therefore has not implication on future generations, at least when financed domestically. After all, future generations inherit both the debts as well as assets. So let's increase domestic government debt!

Human Capital Theory
Human capital theory holds that human capital increases labor productivity and it is therefore an important ingredient in economic growth and the wealth of nations. The theory is either a tautology or bunk. It is tautological when human capital is defined as those characteristics of the work force that improve labor productivity. It is bunk when human capital is identified with education. As anyone with some education knows, sometimes it does increase labor productivity and sometimes is does do not, and that frequently education lowers it. Not surprisingly, the bunk version is especially popular among the educationalists, including academic economists.

Human Capital Theory
The human capital theory was formulated by Adam Smith and has been rediscovered by modern economic theory. After the rediscovery it got trivialized to the point that any sort of school attendance makes people more productive, independent of its content or the environment those attending "school" live and work. Belly dancing and engineering classes both improve human capital.

Inflation
Introductory textbooks tell you that inflation is costly because it distorts price signals and leads to an undesirable redistribution from the private sector to the government. The governments get the income from the newly printed money – the seigniorage – plus the income from the fiscal drag. Whereas no one disputes the distributive consequences of inflation, the interpretation has suddenly changed after the financial crisis and the ballooning government debts: Leading economists now declare that plundering private sector income is a good thing because governments are in danger of going broke and desperately need more income.

Information Asymmetry
A seller knows more about a product than the buyer. Thus when a bank flogs you a share of a firm it knows will go bust, the deal suffers from information asymmetry. According to the laws of economic theory, if the bank takes advantage of the information asymmetry and acts in its own best interest, it also acts in the best interest of all of us. Not taking advantage of asymmetric information is therefore morally irresponsible.

Invisible Hand
According to modern economics, cheating everybody (some economists call it behaving opportunistically) fosters the common good.

Liberals (collectivist liberals)
Liberals of the collectivist kind (American liberals) blame markets for any social ills they observe. When the central bank stuffs up the economy by flooding it with cheap money and a housing bubble results, at fault is the housing market. When the bubble bursts and the government authorities charged with supervising the financial system have slept through the bubble, the fault is with the free financial markets.

Macroeconomic Policy
In a recession, increase government spending, decrease taxes and cut interest rates. Cutting edge macroeconomic theory signifally fails to agree on what happens when you do this. Increase government spending and macroeconomic theory predicts that income will increase, decrease or stay the same. 

Macroeconomic Theory
A theory how the main variables in the economy behave - such as income, inflation, and unemployment - that is immediately disregarded when it is needed, as in the case of recessions or depressions.

Market Failures
Do not exist. Oligopolies support growth, externalities can be dealt with by negotiations of market participants and information failures are uncommon because everybody has perfect information about everything concerning past, present and future and therefore always makes decisions in her best interests. This is particularly true of those who invest in shares.

Markets
According to economic theory markets are places where everybody cheats everybody else.

Methodology
Methodology analyzes the principles and procedures of inquiry in a particular discipline, i.e. its methods. Since methodology sounds more important than method, most economists, in line with other social scientists, use the former when they mean the latter.

Monetarism
Money influences output in the short run but only prices in the long run. The short run lasts from a month to infinity. The long run is slightly longer.

Money Supply
Some economists think that the supply of money is determined by the central bank (money is exogenous), others believe that the quantity of money is determined by the money or credit creation process within the financial system (money is endogenous). Such inconsistent anslses do not stop economists from freely proffering their advice on what monetary policy a central bank ought to pursue.

Neoliberals
Liberals of the free market type fight any regulation of markets tooth and nail. If such unregulated markets fail, they blame it on the government that has neglected to regulate them properly.

Networking
In practice means establishing yourself as a well-connected crony. Everyone knows that careers are made through networking. You will hear little about it from economists. If networks are important, then the allocation mechanism goes out of the window and private economic decisions might turn out to be socially detrimental. 

Networking
Not part of the canon of economics. There is no formal training that tells young economists that their career is strongly influenced by attaching themselves to networks that help each other in getting jobs, promotions and journal publications.

New Classical Macroeconomics
Explains recessions when all markets remain in equilibrium, but some people have misestimated inflation rates. Only the Nobel Price Committee ever seriously believed that major recessions can be caused by uncertainties over slight variations of the inflation rate.

New Keynesian Macroeconomics
Labor and product markets are inefficient and generate unemployment on grounds that are not quite clear.

Nobel Prizes in Economics
The only Nobel Prize that is given without the burden of having to produce a significant original idea that sheds light on economic life.

Oriental Bazaar
The ideal world of economic theory - prices are fixed by haggling, information on prices and product quality unavailable and fraud is ripe.

Performance Incentives
Performance incentives are a central element of an economist's policy toolkit. These incentives consist exclusively of material rewards. Even economists grudgingly agree that most people are motivated not only by monetary gain but also by social norms, such as by doing a good job or by intrinsic job satisfaction. However, the dismal science fights bitterly against the well-established insight that monetary rewards often undermine these other motivators and, as a consequence, additional monetary rewards may reduce performance.

Performance Incentives
All incentives in economics are material - which implies that salaries have to be tied to performance, otherwise economic man starts to shirk. A different part of economics, that dealing with imperfect information, teaches that complex tasks cannot be monitored effectively. If it were true that only performance related pay prevents shirking and performance cannot be monitored, economists have nothing sensible to say on how to shape work incentives of complex tasks.

Progress in Economic Theory
Progress in economics consists in cloaking trivial ideas in mathematics.

Public Sector Organizations
Public activities are always and everywhere done ineffectively even if they deliver profitably the same services at the same cost as firms in the private sector.

Quantitative Economics
A method that is forced upon unsuspecting students who initially believe that it leads to deeper insights into social or economic life. Some of them later realize that they have been fraudulently deceived, but in the absence of any alternative employment opportunities they are forced to perpetuate the fraud on the next generation of students.

Quantity Theory of Money
If the quantity of money increases significantly, the price level ought to go up - in the long run. So far no-one has been able to specify what the long run is.

Rating Agencies

Rational Expectations
People’s expectations are always identical to the forecast of the model that happens to be constructed. This definitional twist allows modelers to avoid dealing with expectations altogether – since everybody is assumed to believe that in the future the world behaves as in the model. Unsurprisingly, this intellectual obfuscation was considered worthy of a Nobel price.

Rationality
The insight that people do not behave rationally cannot be accommodated in economic models and has therefore, regrettably, to be disregarded.

Real Business Cycle Macroeconomics
Markets are always in equilibrium - unemployment is an illusion beheld by simpletons who cannot see that the unemployed could easily find a job at the going wage rate.

Reality
Economists often talk about reality. It consists of masses of data-sets that are collected by all sorts of institutions that are then manipulated statistically. Data not contained in such data sets are not part of reality.

Rent-seeking
Trying to attract income beyond what can be had in a well-regulated market is a ubiquitous phenomenon and of great practical import which disqualifies it from being taken seriously by economists - perhaps because the profession is an extreme example of siphoning off rent.

Securitization
Transfer of debt from one financial institution to another without the knowledge of the debtor. The term was invented to hide the fact that securitization increases the risk of default.

Social Science
Social science is generally not a word mentioned in a society of polite economists since it involved - at least before it got contaminated with economics - such wasteful pursuits as acquiring some knowledge of societies, possibly even a foreign language.

Socialism
Socialists believe that if government and enterprises are in the hands of the Socialist Party, the welfare of the members of the Socialist Party will improve. The theory is one of the best established truths in social science.

Stakeholder
Any activist group politically important enough to extort funds from firms for worthy causes, mainly the cause of increasing the welfare of the leading activists.

Trade Unions
Trade Unions are an unnecessary encumbrance of the market economy, since wages are determined by the theory of wage determination.

Trade Unions
Trade Unions are a nuisance preventing the efficient allocation of resources. They interfere in the labor market that would otherwise work perfectly and allocate resources efficiently according the theory of the labor market.

Trust
Is not a category in economics.

Truth
Truth is not a category in economics (and in social science generally). Most economists claim that they formulate hypotheses which they then try to refute. Fiddling with extremely simplified if not simple-minded hypotheses that are hardly ever conclusively refuted will never lead to anything approaching “knowledge” of “truth”. No wonder these categories are not encountered in economic writings.

U.S. Federal Reserve Bank
The Federal Reserve Bank is a public institution that buys junk assets in exchange from newly printed money in order to improve the stability of the US economy and the welfare of its citizens.

Unemployment
Without government intervention labor markets always clear. That is trivially true because those fired either find a job at the same wage rate or a lower wage rate, including one that is close or equal to zero and some people are reduced to cleaning shoes or beg. Thus the absence of beggars in the street is a clear and regrettable sign of government messing up labor markets.

Unproductive Labor
Economics teaches that there is no such thing as unproductive labor. Increasing the number of economists will increase the value of the output generated. All lawyers are engaged in productive activities. If you increase the complexity of the law and you need many more lawyers and expert-economists to produce the same output, economists would cheerfully declare this work of lawyers and economics to be productive activities. As usual, Adam Smith beats modern economics; at least he knew that there was something like unproductive labor.

Virtue
Is not a category in economics. Since it would be most unlikely that a virtuous economist would get a job in a university and everybody knows this, the term is an embarrassment.

Wage Determination
Wages are determined by the supply and the demand for labor. It is assumed that there are large numbers of mobile employees and a large number of firms in each category of work at each and every location. Since economists habitually confuse models with reality, it follows that in the real world too wages are negotiated freely by employees with a high degree of bargaining power because they have a great many alternatives readily available. For this reason alone, trade unions are entirely superfluous organizations hampering the free development of individual workers.

Wages of Management
The theory of wage determination justifies any wage rate, including those of the top management. Never mind that wage rates are set by these very managers who sit on each others board of directors and happily agree to the bonuses of their colleagues that allow increases of their own salary in the next round.

Welfare State
Modern Utopia - where everybody has access to education, health and old age pensions at no cost to themselves.

Welfare
According to welfare economics, welfare increases if we can consume more material goods or increase our leisure or both - never mind that job security goes down the gurgler and "job flexibility" destroys our private and family life.

World Bank
The World Bank gives large loans to countries of the Third World so that they might "develop". Since the money is habitually wasted, the resulting debt has to be regularly forgiven after some seemly interval.
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[i] Bergson notes that „by now it seems agreed that the argument on those questions advanced by Mises ... is without much force”; the alleged information and monitoring problems “exaggerate the difficulties of the problems” (Colander, 370 – quotes Abram Bergson. Social Economics. A Survey of Contemporary Economics, Vol. I, ed. Howard S. Ellis. Homewood, Ill Richard D. Irwin, 1948, p. 412).