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It is important we see over-leveraging for what it is: a large negative externality that society has been forced to support.
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If you don't poke the nose of a capitalist enterprise into a negative "externality" (that is, an anti-societal side effect of its activities) and firmly hold it there, it will deny both the very existence and importance of that externality.
Production exploits a natural resource and involves a negative externality.
Such a condition is known to economists as a negative externality: the behavior of Person A (we'll call him Arthur) damages the welfare of Person Z (Zelda), but Zelda has no control over Arthur's actions.
The emission of carbon dioxide and other greenhouse gases is a classic negative externality — the "biggest market failure the world has ever seen," in the words of Nicholas Stern, the author of a report on the subject for the British government.
Additionally, this assessment also provides a necessary step in evaluating the invasive potential of bioenergy crops, which present a possible negative externality to the bioeconomy.
This is, in economist-speak, a "negative externality": the transaction inflicts a cost on an otherwise uninvolved party, who gets no benefit from the transaction.
From an economic perspective, greenhouse gas emissions are a negative externality.
A negative externality exists when the production or consumption of a product results in a cost to a third party.
Also, merely identifying a negative externality is not enough to demand putting an end to its causes; sometimes it has to be accepted as a trade-off for the gains from marketisation.
We follow the utility function of Su and Zhang (2008), and differing from the above papers, we incorporate two externalities into the utility function: A negative externality may motivate strategic customers to purchase early while a positive externality may make them wait.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com