Community Digest

Top new questions this week:

Why do we need to "get the economy moving again"?

Sorry I have no background in economics but as a computer programmer, I specialise in building models out of simple math and logic, so I hope we can speak the same language without having to get into ...

macroeconomics gdp economic-growth covid-19-crisis  
asked by Andy 36 votes
answered by Kenny LJ 48 votes

Existence of Symmetric Pure Strategy Equilibrium

I have 2 symmetric players $A$ and $B$. Each of them has 2 decision variables $x_i\in[0, \beta]$ and $y_i\in[0,1]$, where $i\in\{A,B\}$. Their payoff functions are symmetric, i.e., if you swap the ...

asked by ftxx 4 votes
answered by brunosalcedo 6 votes

Neutral technical progress

Recently I learnt that Cobb-Douglas production function has elasticity of substitution equal to 1, therefore it has neutral technical progress. Then Leontief production function has zero elasticity of ...

macroeconomics mathematical-economics economic-growth labor-economics technological-progress  
asked by Deb B. 3 votes
answered by 1muflon1 3 votes

Average ability conditioning on having accepted an offer

There is a continuum of workers between 0 and 1. These have ability $\alpha\sim U[0,2]$. A firm offers them a salary $v$ and has profits $$ \pi = (\rho \alpha-v) n(v) $$ where $n(v)$ is the fraction ...

labor-economics probability profits  
asked by Three Diag 3 votes

Why GDP series always has an unit root problem?

In one of the lecture slides of class that I am currently taking our professor mentioned that when it comes to the GDP is it safe to always assume it has unit root and testing for it is just ...

macroeconomics gdp applied-econometrics  
asked by csilvia 3 votes
answered by Michael 1 vote

Current status and trends in the choice of software for teaching econometrics

My institution is updating some of its bachelor and master study programs in economics and business administration, and the question of choice of software for econometrics and related classes has come ...

econometrics reference-request software teaching  
asked by Richard Hardy 3 votes

An easy GDP growth question

A woman pays her gardener £60 per year and later married him. The gardener continues to work in the garden but unpaid. The woman earns £1000 before and after the marriage. Statement: the marriage ...

asked by geg 3 votes
answered by Rumi -1 votes

Greatest hits from previous weeks:

Taxes levied on sellers = Taxes levied on buyers

All page numbers refer to Principles of Microeconomics, 7 Ed, 2014, by NG Mankiw. [p 125:] Taxes levied on sellers and taxes levied on buyers are equivalent. [p 156:] ... When a tax is levied ...

microeconomics taxation  
asked by Accounting 4 votes
answered by Jay 3 votes

A general drought in the world, raises the total income that farmers receive?

I need to write 6-7 lines explaining why is the following statement true: A drought around the world raises the total revenue that farmers receive from the sale of grain, but a drought only in ...

macroeconomics financial-economics  
asked by Adrian George 2 votes
answered by Adrian George 2 votes

What is the likely result of rent control in Berlin?

What predictions does economics make about the likely result of this policy in Berlin of capping rent prices. Berlin is freezing the rents of 1.5 million apartments for the next five years ...

pricing rent-control price-control  
asked by FreeMarketUnicorn 20 votes
answered by 1muflon1 18 votes

What is the difference between present value and face value?

What is the difference between present value and face value? When I search this question on Google is says they're the same in some cases and different in others. It says they are the same when the ...

interest-rate investment value bonds  
asked by Adam Staples 5 votes
answered by Giskard 6 votes

Solow Model: Steady State v Balanced Growth Path

Okay, so I'm having real problems distinguishing between the Steady State concept and the balanced growth path in this model: $$ Y = K^\beta (AL)^{1-\beta} $$ I have been asked to derive the steady ...

economic-growth production-function capital-returns steady-state  
asked by James Baker 11 votes
answered by Alecos Papadopoulos 14 votes

How interest rate affects currency

I am quite new to economics. I was reading about changes in interest rates and its effect on currency value. The fact is as interest rates increases, the currency value also increases and vice ...

macroeconomics currency inflation interest-rate  
asked by Maha 9 votes
answered by BB King 6 votes

Completeness of Preferences

Economists assume that consumers have a set of preferences that they use to guide them in choosing between goods. These preferences have to satisfy three properties: completeness, transitivity and ...

microeconomics reference-request preferences  
asked by emeryville 5 votes
answered by Ubiquitous 3 votes

Can you answer these questions?

Lerner Index Interpretation?

How do you interpret the Lerner Index? I ask because at Uni. we have been told that, for monopoly, when the producer max. his profit, he sets the price such as the demand is elastic and the lerner ...

microeconomics mathematical-economics markets monopoly producer-theory  
asked by ada109 1 vote

Travel Cost Method - how to treat people who live at a site

We are about to do a survey using the individual travel cost method to value a harbour, located in a fishing society, which is visited by tourists each season. My question is - should we include in ...

asked by Kjisti 1 vote
answered by Adam Bailey 0 votes

What is data trapezoid form?

For one of our class project we are required to do the following: Download U.S. real GDP in data trapezoid form (vintages) I tried to search online for what does the data in trapezoid form means ...

gdp data  
asked by csilvia 1 vote
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