A situation in which no feasible change can raise anybody's welfare without lowering that of somebody else. This applies to reallocation of final goods between different users, reallocation of factors of production to different industries, and changes in the composition of final goods produced. Pareto-optimality is best understood through a series of negatives. If at the existing allocation two consumers have positive consumption of two goods and the consumers' indifference curve between them differ in slope, an exchange between the two can make both better off, so the situation is not Pareto-optimal. If for two goods with positive output levels the indifference curve for any consumer and the transformation curve for any producer differ in slope, changing the composition of the goods produced can make somebody better off without harming anybody else, so the situation is not Pareto-optimal. With constant or decreasing returns to scale everywhere in an economy, Pareto-optimality is often defined in terms of marginal equalities. If there are increasing returns anywhere in an economy, however, Pareto-optimality cannot necessarily be ensured purely by pursuing marginal equalities: a local optimum may not be a global optimum, and an optimal situation may involve corner solutions.

• expectations-augmented Phillips curve
• expectations, model-consistent
• expected inflation
• expected utility
• expected value
• expenditure
• expenditure-based deflator
• expenditure changing
• expenditure method
• expenditure, public
• expenditure switching
• expenditure tax
• exploitation
• exponent
• exponential
• exportables
• export concentration
• export control
• export credit
• export credit agency
• Export Credits Guarantee Department
• Export Import Bank
• export incentives
• export-led growth
• export multiplier