13 Finance Terms Worth Knowing in Today’s Strange Economy

By The Inspired Investor teamJuly 7, 2023

The only thing weirder than the economy these days is all the buzzwords it's created. What do they mean – and what can they tell us about financial markets today?

Upcrash. Moral hazard. Zombie debt. What? It seems some economists have been whipping through a thesaurus in their efforts to describe what’s going on with the economy. Of course, all the colourful jargon we’ve been hearing lately doesn’t always make it easier to understand the markets if you’ve never heard it before. To help you make sense of it all, we started with 13 finance terms worth knowing.

Zombie debt

A debt you owe may be forgotten or simply ignored by its original creditors. (Crazy, but it happens!) That old credit card balance or unpaid telephone bill can become zombie debt when someone motivated enough to try and collect it, like a collection agency, resurrects it. Canadians, who carry some of the highest consumer debt levels in the world, are at higher risk of getting bit these days as delinquencies climb.

The Bank of Mom and Dad

Canadian real-estate prices have been at their least affordable for a while now, yet houses keep flying off the market. What gives? Recent reports and commentary suggest that the Bank of Mom and Dad – that is, financial support from the family – may be a key part of the equation.


Markets took off like a shot after initially tanking in the early days of the COVID-19 pandemic, a recent example of an upcrash, a sudden, and often sustained, rally in a stock’s price or the overall market can occur when investor optimism suddenly returns after a period of negativity.

Wall of fear

There’s a saying in investing that “bull markets climb a wall of fear” (or sometimes a “wall of worry”). The phrase suggests that after the initial euphoria of a market upswing wears off, investors may start feeling increasingly fearful of an impending correction, downturn or crash – whether one is just around the corner or not.


Kind of the opposite of globalization, slowbalization refers to the slowdown (or reversal, depending on who you ask) of global trade following the financial crisis of 2008. International tensions have led to nations trading among regional groups of allies rather than globally, which is at least one of the reasons we experienced those pandemic-induced supply chain snarls a while back.

Risk on/risk off

When economists talk about risk on or risk off, they’re broadly referring to how investors feel about the markets. For example, when investors are optimistic about the markets and buying into higher-risk stocks and commodities, it’s “risk on.” When times are tough and investors start eyeing the exits for less-risky bonds or cash, it’s “risk off.”

Hawkish pause

In a period marked by increase after increase to interest rates, it can be hard to remember that Canadian and U.S. central banks did signal a brief pause in their fight against rising inflation. Economists called this a hawkish pause – a holding pattern that left the door open for more hikes in the future. And leave the door open they did: We’re officially on hike number nine here in Canada, if you’re still counting.

Moral hazard

Earlier this year, scads of U.S. regional banks courted failure after interest-rate hikes exposed their financial mismanagement. Rather than let all of them fail, however, the U.S. Fed bailed them out. Some critics suggested that such bailouts could create a moral hazard, the idea that saving someone from the consequences of their actions will encourage them to take even bigger risks in the future.

The ‘flations… and all ‘cessions, too

Something we’ve noticed about economists is that they simply love putting their own spin on classic finance terms. That’s how you get so many words for inflation. You’ve probably heard these lately:

Funflation: Interest rates keep climbing, but inflation seems stickier than a melted ice cream cone. Some economists theorize that a recent surge in spending on fun-but-expensive experiences like concerts and vacations could be a significant contributor.

Shrinkflation: Smaller box, same price – that’s your favourite cereal brand on shrinkflation. Many manufacturers quietly reduce package sizes without lowering prices as a way of dealing with rising inflation.

Stagflation: An unfortunate mix of slow economic growth, along with high levels of inflation and unemployment. Usually, these three economic forces don’t happen together… but have we mentioned how weird the economy’s been?

Economists have also mastered ways of avoiding the dreaded “R” word. While a “technical” recession is your textbook label for two consecutive quarters of negative growth in real GDP terms, some others worth knowing these days include:

Richcession: A recession also affecting the wealthy, as opposed to mainly middle and lower earners who usually bear the brunt of a slowing economy. Job losses in high-powered industries (like those we’ve seen in tech) and wage stagnation can lead to one.

Cardboard box recession: Fewer goods flying off store shelves means less packaging required – that’s a cardboard box recession in a nutshell. Firms cut back on packaging purchases when they anticipate slowing demand. That in turn can indicate a slowdown in manufacturing, which has historically preceded recessions in the U.S.

+ Disclaimers

The material in this article is intended as a general source of information only, and should not be construed as offering specific tax, legal, financial or investment advice. Every effort has been made to ensure that the material is correct at time of publication, but we cannot guarantee its accuracy or completeness. Interest rates, market conditions, tax rulings and other investment factors are subject to rapid change. You should consult with your tax advisor, accountant and/or legal advisor before taking any action based upon the information contained in this article.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.