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2
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1answer
44 views

Is there a theory about investors' behaviour during bubbles?

As far as I can see there are two senses in which it's 'rational' for an investor to buy during a bubble. The investor has erroneously overvalued the value of the stock/commodity. The investor is ...
0
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0answers
24 views

Bubble and productive investments

Is there some consenus in the literature as to what features characterize a bubble investment as distinct from a productive investment?
0
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0answers
10 views

do I need to pay tax if I earn 10 pounds from peer to peer investment [migrated]

quick question: if I earned 10 pounds in tax year 2014/15 do I need to pay tax? I just started investing in Funding Circle, I earned few pounds. This just looks silly to pay tax from 10 pounds but ...
3
votes
3answers
33 views

Scaling Adjustment Costs

Take a cont. diff, convex and increasing cost function $c(X)$. Say you start with a stock $K$, and want to (dis)invest $I$. Many adjustment cost functions (for example, the first example on page 2 ...
3
votes
1answer
12 views

Does the amount of inward investments affect inflation?

I understand that inflation has an impact on the foreign direct investment. But can the opposite be true? The amount of foreign direct investment has an impact on the inflation of the country that ...
5
votes
1answer
35 views

Does 'ethical investing' have any effect?

Some mutual funds make a point of only investing in ethical companies (eg avoiding arms companies, polluters, human rights violators, etc). Or other organisations pressure funds to stop investing in ...
3
votes
1answer
35 views

Derive marginal productivity conditions in DW Jorgenson paper

I'm reading Jorgenson, Dale W. (1963), "Capital Theory and Investment Behavior", American Economic Review. Vol 53, No. 2, pp. 247-259. http://www.jstor.org/stable/pdfplus/1823868.pdf I would like ...
1
vote
1answer
19 views

Lower ROI because of zero interest rate

I've heard an interview with Bill Gross in which he claims that one of the problems with lower interest rate is that it leads to a lower ROI in the real economy. How can that be?
1
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0answers
21 views

How does economics cope with production processes that have large lumpy investment requirements?

If seems that all equations (e.g. Price elasticity of supply ) assume that there is a marginal cost of production that is nicely related to the level of output. But clearly you can’t buy half a new ...
5
votes
0answers
45 views

Real option effect of uncertainty - irreversiblity vs fixed cost

There is a growing literature (e.g. Bloom, 2009) studying negative macroeconomic impacts of heightened uncertainty. One channel through which uncertainty can discourage economic activity, and ...
2
votes
1answer
69 views

What is the effect of redirecting government tax intake to a consumer retirement saving incentive?

In New Zealand we have a retirement saving scheme called Kiwisaver. The scheme is opt in. If a consumer opts in, they must save at least 3% of their income, which they can't access until retirement. ...