Glossary entry

Spanish term or phrase:

fallas del mercado/arbitrajes del mercado

English translation:

Market failure/Arbitrage

Added to glossary by Neal Allen
Dec 18, 2008 13:42
15 yrs ago
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Spanish term

fallas del mercado/arbitrajes del mercado

Spanish to English Bus/Financial Economics
Do U.S. economists have special terms for these two terms?

Context: Las propuestas que sustentan el establecimiento de controles se basan en dos criterios básicos: en la existencia de “fallas del mercado”, cuando hay divergencias entre los movimientos del capital y los parámetros fundamentals de la economía, y en los llamados “arbitrajes del mercado”, cuando sucedan diversas estructuras de riesgos y rendimientos relativos entre los flujos internacionales de capitales.

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7 mins
Selected

Market failure/Arbitrage

MARKET FAILURE:
Market failure is a concept within economic theory wherein the allocation of goods and services by a free market is not efficient. Market failure can be viewed as a scenario in which individuals' pursuit of self-interest leads to unsatisfactory results for the society.[1] The first known use of the term by economists was in 1958,[2] but the concept has been traced back to the Victorian philosopher Henry Sidgwick.[3]

The belief that markets can have inefficient outcomes is a common mainstream justification for government intervention in free markets.[4] Economists, especially microeconomists, use many different models and theorems to analyze the causes of market failure, and possible means to correct such a failure when it occurs.[5] Such analysis plays an important role in many types of public policy decisions and studies. However, some types of government policy interventions, such as taxes, subsidies, bailouts, wage and price controls, and regulations, including attempts to correct market failure, may also lead to an inefficient allocation of resources, which has been called government failure.[6] Thus, there is often a choice between imperfect outcomes, i.e. imperfect market outcomes and imperfect government outcomes.

ARBITRAGE:
In economics and finance, arbitrage is the practice of taking advantage of a price differential between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, a risk-free profit. A person who engages in arbitrage is called an arbitrageur such as a bank or brokerage firm. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies.

If the market prices do not allow for profitable arbitrage, the prices are said to constitute an arbitrage equilibrium or arbitrage-free market. An arbitrage equilibrium is a precondition for a general economic equilibrium. The assumption that there is no arbitrage is used in quantitative finance to calculate a unique risk neutral price for derivatives
Peer comment(s):

agree Andres Pacheco
50 mins
gracias!
agree Richard Boulter
1 hr
gracias!
agree Mónica Sauza
3 hrs
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4 KudoZ points awarded for this answer. Comment: "Thank you, Regina."
+1
8 mins

market gap / market decisions

Marina Orellana. Glosario internacional del tracutor.

Una de las acepciones de "falla" es "gap"

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Stocks and Stock Market Gaps
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Market Gaps - The Greatest Leverage You Can find!
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Cover Market Gaps Or Shortages
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Oxford Spanish-English Dictionary. Una de las acepciones de "arbitraje" es "decision."

Web

Results 1 - 10 of about 68,800 for "market decision". (0.18 seconds)
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Mike :)
Peer comment(s):

agree Brigith Guimarães
1 hr
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