Macroeconomics

Seasonal adjustment:

The removal of the regular

fluctuations in an economic variable that occur as a

function of the time of year.

Sectoral shift:

A change in the composition of

demand among industries or regions.

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Seigniorage:

The revenue raised by the govern-

ment through the creation of money; also called the

inflation tax.

Shock:

An exogenous change in an economic rela-

tionship, such as the aggregate demand or aggregate

supply curve.

Shoeleather cost:

The cost of inflation from reduc-

ing real money balances, such as the inconvenience of

needing to make more frequent trips to the bank.

Small open economy:

An open economy that

takes its interest rate as given by world financial mar-

kets; an economy that, by virtue of its size, has a neg-

ligible impact on world markets and, in particular, on

the world interest rate. (Cf. large open economy.)