Community Digest

Top new questions this week:

Can someone explain why sterling-dollar parity is bad?

Please forgive the probable naivety of this question. I am not an economics student I am just trying to understand the currency fluctuations that are currently occurring with GBP as a result of our ...

monetary-policy currency international-economics uk  
user avatar asked by thomasbishop Score of 8
user avatar answered by user253751 Score of 25

Why the subjective "Owners’ equivalent rent of residences" is included in the CPI?

I was reading about the calculation of the Shelter index of the CPI which accounts to more than 30% of the entire basket. It consists mainly of two parts: (1) Rent of primary residence, and (2) Owners’...

inflation statistics  
user avatar asked by d_e Score of 4
user avatar answered by 1muflon1 Score of 4

How to find the price ratio $\frac{p_x}{p_y}$?

(Question) Suppose two individuals form an economy where each devotes $10$ hours of labour to produce goods $x$ and $y$. The utilities of the agents $S$ and $J$ are $U_S(x,y) = x^{0.3}y^{0.7}$ and $...

microeconomics production-function  
user avatar asked by Schmidt Score of 3

What are the most plausible scenarios for Eurozone economics without Nord Stream 1 gas?

As you may have heard, the Nord Stream 1 and 2 gas pipelines are no longer available. It is possible to foresee the most probable economic outcomes of that events to the Eurozone area? My main focus ...

macroeconomics unemployment demand european-union euro-area  
user avatar asked by Vitaly Olegovitch Score of 3
user avatar answered by 1muflon1 Score of 2

When the country's currency is falling, does it make sense for Central Bank to intervene beyond curbing Volatity?

Consider a country who have more imports than exports. If the country's currency is falling badly with reference to the dollar (and the dollar is the main trading currency for the said country), then ...

international-trade central-banking foreign-exchange balance-of-trade  
user avatar asked by user93353 Score of 2

Are interest rates increases fighting inflation?

Central banks are stubbornly increasing rates to fight current spike of inflation. Inflation, especially in Europe but also in the USA, is mainly supply driven and, killing demand to try to tame an ...

inflation  
user avatar asked by user067531 Score of 2

Does the initial bond price equal the face value?

When a bond is issued, does the buyer necessarily pay the face value? (I am not talking about consols or zero coupon bonds, just about an ordinary bond that, for simplicity, pays a coupon once a year.)...

bonds  
user avatar asked by Richard Hardy Score of 2
user avatar answered by 1muflon1 Score of 1

Greatest hits from previous weeks:

Why do banks take deposits if they do not need them to make loans?

I have taken some economics courses in university, where I was introduced to fractional-reserve banking. From my understanding, in fractional-reserve banking, the bank has motivation to encourage ...

banking money-supply central-banking debt  
user avatar asked by Flux Score of 26
user avatar answered by MichaelS Score of 27

If someone goes for a haircut, does it increase GDP?

If I go for a haircut, am I causing the GDP to rise because consumption is rising?

macroeconomics  
user avatar asked by ROHAN PAUL Score of 37
user avatar answered by stevec Score of 38

Is Basic Economics by Thomas Sowell a good book for a layperson who isn't interested in pursuing economics?

I heard that Basic Economics by Thomas Sowell is a good book for a layperson to get a feel for how the economy works. I have also heard some criticisms but they seem to be based on Thomas Sowell's ...

reference-request soft-question books textbooks  
user avatar asked by ApplePiePoodle Score of 10
user avatar answered by 1muflon1 Score of 11

Nash Equilibrium and Pareto efficiency

What is the difference between Nash equilibrium and Pareto Efficiency. Can you give me an example where Nash equilibrium is not Pareto Optimal?

game-theory  
user avatar asked by HARSHA VARDHAN Score of 9
user avatar answered by Sub-Optimal Score of 16

What are some results in Economics that are both a consensus and far from common sense?

What are some results in Economics that are both a consensus between most economists and far from common sense? I would also welcome suggestions of clear definitions for what we should mean as ...

reference-request  
user avatar asked by psn Score of 81
user avatar answered by Herr K. Score of 45

How much money is wire transferred every year worldwide?

How much money is wire transferred every year worldwide? Estimates are fine.

banking money  
user avatar asked by B T Score of 7
user avatar answered by dismalscience Score of 11

Why is a higher inflation rate bad for international competitiveness?

Why if there's a higher inflation rate in country A then its exports are less competitive and its trading partners prefer to buy from countries with lower inflation rates?

inflation  
user avatar asked by Richard Smith Score of 7
user avatar answered by BB King Score of 4

Can you answer these questions?

How to derive a solution to stochastic difference equation using Blanchard-Kahn method?

Let $z_t =\rho z_{t-1}+\epsilon_t$, where $|\rho|<1$ and $E_t e_{t+1}=0$ I need to solve the stochastic difference equation $E_t[y_{t+2}-2ay_{t+1}+by_t]=z_t$ for $y_t$, $t\geq0$, where $0<b<1$...

macroeconomics difference-equations rbc  
user avatar asked by Pjoon Score of 1

Convergence of various forms of Prospect Theory?

I'm not a mathematician but it seems that my problem is a rather technical than an economic one, but i hope this is still the right audience. My problem is the following: I want to analyse the effects ...

microeconomics mathematical-economics utility expected-utility risk-aversion  
user avatar asked by T123 Score of 1

Fixed effect model: different estimation approaches with R - how to demean variables - unbalanced panel

I want to use R to estimate a fixed effects model using different estimation approaches (e.g. replicating xtreg from Stata). Note that I am using an unbalanced panel. The easiest way to do this is ...

econometrics applied-econometrics statistics r  
user avatar asked by shazz Score of 1
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