third best

adj, noun — 2 senses

adj

Economics, Sciences Characterized by being a third best in the below sense.

This reduces the inflation bias but brings higher employment variability than is optimal, a "stabilization bias," and hence leads to a third-best equilibrium rather than the second best.1997 Mar, Lars E. O. Svensson, “Optimal Inflation Targets, "Conservative" Central Banks, and Linear Inflation Contracts”, in The American Economic Review, volume 87, number 1, pages 98–114:

noun

Economics, Sciences A second best that is second best relative to a situation that is itself a second best.

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