Structural Change

AAA

DEFINITION of 'Structural Change'

An economic condition that occurs when an industry or market changes how it functions or operates. A structural change will shift the parameters of an entity, which can be represented by significant changes in time series data.

INVESTOPEDIA EXPLAINS 'Structural Change'

A structural change can alter past trends or theories regarding stock returns. For example, let's say the futures market on oil is usually in contango, which means that oil today is more valued than oil in the future. If political instability and fears of scarce reserves arise, the oil market may undergo a structural change. Demand for future oil may increase, as people would fear lower supply levels for that period. Consequently, the market may shift to a backwards market, where the oil today is less valuable than future oil.

RELATED TERMS
  1. Business Process Redesign - BPR

    The complete overhaul of a key business process with the objective ...
  2. Small Firm Effect

    A theory that holds that smaller firms, or those companies with ...
  3. Time Series

    A sequence of numerical data points in successive order, usually ...
  4. Small Minus Big - SMB

    One of three factors in the Fama and French stock pricing model. ...
  5. Economy

    The large set of inter-related economic production and consumption ...
  6. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
Related Articles
  1. Economics Basics
    Economics

    Economics Basics

  2. Explaining The World Through Macroeconomic ...
    Options & Futures

    Explaining The World Through Macroeconomic ...

  3. Recession: What Does It Mean To Investors?
    Active Trading Fundamentals

    Recession: What Does It Mean To Investors?

  4. All About EVA
    Options & Futures

    All About EVA

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center