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2
votes
1answer
8 views

Deflate level and flow variables using PPI and CPI

What do statements like Flow variables (such as dividend growth and returns) are deflated using the CPI index. or Level variables are deflated using the Producer Price Index (PPI). mean? What are ...
1
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1answer
9 views

What is the meaning of “labor input” in the context of incentive theories?

In the article "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design" (Holmström and Milgrom, 1991) it is said that two identical agents ($i=1,2$) devote ...
-2
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1answer
37 views

Could COVID-19 have brought deaths forward, rather than creating more?

From cursory examination of this graph by the CDC, we see a spike in US deaths (from all causes) well above trend in early 2020, but - unexpectedly - deaths are currently tracking below trend Is it ...
-2
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0answers
15 views

Does a centrally-planned economy have more overhead/booking-keeping cost than a free-market system?

While in college, I read an economics textbook. This book contained a chapter which compared and contrasted the free-market system to a centrally planned economy. The author of the book said hat a ...
1
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1answer
26 views

How to interpret this regression coefficient?

I am performing a simple single variate regression on the variables crime rate (denoted by crrate) and the probability of getting arrested (denoted by prarrest). To be precise, the variables are ...
2
votes
1answer
17 views

Blackwell order of information structures

Consider a model where a decision maker (DM) has to choose action $y\in \mathcal{Y}$ possibly without being fully aware of the state of the world. The state of the world has support $\mathcal{V}$. ...
1
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0answers
32 views

Does the Efficient Market Hypothesis explain why Cheaspeake Energy skyrocketed from \$25.95 to \$77.5 before tumbling to \$21 over 3 days?

In this question's title, I reported the daily highs for CHK for June 5th 2020 ($25.95), 8th, and 9th. CHK had been rumoured to file for Ch 11 bankruptcy since March 2020(?), and it did on June 28. ...
0
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0answers
9 views

What quasi-experimental/econometric technique can I use to measure the impact of a policy using longtitudinal tax data?

I have two cohorts of workers with very similar characteristics (e.g. same demographic profile, skill level, industry) that were laid off at different points in time. Say one group was laid off ...
1
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0answers
20 views

How many cars the Chinese brands make each year?

From the 25+ million cars made annually in China, many of them are German, American or Japanese brands. How many of the cars made inside China are actually Chinese brands?
2
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0answers
29 views

Proof of excess community demand function in Sonnenschein (1973)

Consider the following passage in Sonnenschein (1973; full citation below): Perhaps because I do not know much about the uniform Lipschitz condition, I do not follow his exposition after the first ...
-3
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0answers
14 views

SEARCH AND EMPLOYMENT:: Consider a simple economy with search unemployment. The matching function is given by M = 0.1Q^(4/12)A^(8/12) [closed]

Consider a simple economy with search unemployment. The matching function is given by M = 0.1Q^(4/12)A^(8/12) The supply curve of the workers is given by v(Q) = Q 2/6 Let b = 0.4, z = 1, k = 0.05, e= ...
1
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0answers
41 views

Prove local non satiation and convexity?

If we have the following representation of a preference relation (in form of a utility function) $$u(x_1, x_2) = \max\{2x_1, 2x_2\} + \min\{x_1, x_2\}$$ does the relation satisfy local non satiation ...
-1
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0answers
46 views

What did Krugman mean by “cult of amauterism” when describing why Britain fell behind in economic growth race?

From Krugman's macroeconomic textbook: It’s one of the classic questions in economic history: Why did Britain, the home of the Industrial Revolution, by far the world’s leading economy for much of ...
0
votes
1answer
24 views

Is Currency Devaluation a cause or effect of interest rates?

I understand that Federal bank/Goverment can manipulate the currency market and devalue its currency by printing more money or buying foreign currencies/assets (essentially increasing the supply of ...
5
votes
0answers
29 views

Are no arbitrage models and equilibrium models equivalent?

This YouTube video from WHU (starting from 3:50) claims that no-arbitrage models (such as Black-Scholes and HJM) are equivalent to equilibrium models (such as CAPM or C-CAPM). He uses the Euler ...
5
votes
1answer
469 views

How does John Stuart Mill distinguish between “wealth” and “riches”?

JS Mill in his Principles (1848): But though air is not wealth, mankind are much richer by obtaining it gratis, since the time and labour which would otherwise be required for supplying the most ...
0
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0answers
12 views

Why is FDI included in GDP computation but not in GNP? Similarly why is FPI included in GNP computation?

I know the difference between GDP and GNP is that the former is confined to domestic borders and the latter to nationals across the world. I also know that FPI is shorter duration and more volatile ...
0
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0answers
34 views

How can nominal gdp replace total transaction volume since it is less than total transaction

After reading my textbook found that money demand for transaction times velocity of circulation equals total transaction i.e. vM = T. After that the book mentions that total transaction is greater ...
0
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0answers
14 views

Decreasing performance pay in the risk-aversion of the principal

What is the intuition behind a decreasing performance pay ß if both principal and agent are risk averse compared to a principal being risk neutral and an agent being risk averse? Actually, intuitively ...
0
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0answers
39 views

How many cars do Chinese brands produce outside China?

Some Chinese car manufacturers have factories outside China. For example FAW produces trucks in South Africa. How many cars do Chinese brands manufacture in factories outside China? Say for example in ...
1
vote
1answer
212 views

Can implicit costs make every option not worth doing?

I'm new to microeconomics so sorry if this is simplistic, but if an action should only be taken when benefits > costs and opportunity costs are included in cost calculations, how would one deal ...
2
votes
1answer
37 views

How buying bonds indirectly from the government prevents the central bank from financing government deficit?

From Krugman's macroeconomic textbook (highlighting is mine): "In an open-market operation the Federal Reserve buys or sells some of the exist- ing stock of U.S. Treasury bills, normally through ...
1
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1answer
29 views

Why is sovereign rate a reference?

I would like to know why we always focus on 10 years sovereign rates when we talk about interest rates ? Let me clarify. I'm reading a paper from the Bank of England that emphasizes the fact that ...
1
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0answers
27 views

Cashflow Risk vs Discount Risk

I'm studying financial economics/asset pricing and I often hear the terms cashflow risk and discount risk but I'm not sure what they mean? Apparently, the investment decision model from Berk Green and ...
-1
votes
1answer
23 views

How does the Greenspan/Bernanke Put semantically relate to put options?

If rational investors reckon that "the Fed, under Alan Greenspan, its longtime chairman, would always bail stock investors out of their losing positions", then rational investors would buy ...
0
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0answers
13 views

How does currency peg affect pegging country's stock market returns?

How does Hong Kong's currency peg to USD affect stocks on the Hong Kong stock exchange? If Hong Kong equities out-perform or under-perform US ones, then the demand for HKD will rise or fall ...
-1
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0answers
22 views

What does Eugene Fama mean “the amount of debt that's financed with equity isn't put aside”?

I transcribed A Symposium with 2013 American Nobel Laureates at Embassy of Sweden, Washington - YouTube starting at 56:00. The moderator, AAAS CEO Alan Leshner, claims Looking up that kind of money ...
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0answers
21 views

What does Eugene Fama mean “variance of price changes over multiple days should be less than the multiple of the variance over a day”?

I transcribed A Symposium with 2013 American Nobel Laureates at Embassy of Sweden, Washington - YouTube starting at 54:45. Martin Karplus (Chemistry)  challenges Eugene Fama. Look at how the stock ...
2
votes
3answers
91 views

Relation between demands of $x, y$ and $z$

Question: Consider a consumer with utility function $U(x,y,z)=y\min\{x,z\}$. The prices of all three goods are the same. The consumer has $100 to spend on these three goods.The demands will be such ...
1
vote
1answer
55 views

Game theory and differential equations

Does anybody know, any (advanced/classic) textbook that combines game theory with differential equations in mathematical economics. Specifically, I an interested in asymmetric information problems.
1
vote
1answer
28 views

Why don't suppliers increase price after a positive demand shock?

Forgive me, I am new to economics. Suppose there's a demand shock in the pork market and D1 shifts to D2. Why not keep quantity supplied fixed at 220 and then raise prices to $3.70, instead of moving ...
0
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2answers
42 views

How do I predict Macroeconomic indicators?Or are there any free resources where I can get the predicted values?

I am building a time series forecasting model in which I am considering the macroeconomic indicators as predictors.I wanted to ask 2 things How do I get the future values?I have seen trading ...
3
votes
1answer
113 views

Nash Equilibrium for n-shops Location Game

So if two ice cream shops were to be placed in the location $[0,1]$, inorder to maximize their own pay offs, they both would finally come to the location $[\frac{1}{2}, \frac{1}{2}]$. This is also the ...
0
votes
1answer
17 views

Why is the Stock Market Cap / GDP ratio on FRED well out of date?

FRED posts the Buffet Ratio here: https://fred.stlouisfed.org/series/DDDM01USA156NWDB But it ends in 2017, anyone know why?
1
vote
1answer
30 views

Generalizing demand for perfect substitutes utility function

I have the utility function: $U(x_1,...,x_n)=a_0+\sum_{i=1}^{n}a_ix_i\;\;\;\;\;\;\;\;\;a_j\in\mathbb{R}_+ \;\;\forall j=\{0,...,n\}$ (maybe $a_0$ could be zero) Where the problem is: $\max_{x_1,...,...
1
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0answers
20 views

How do soda bottler costs break down?

I am curious what the typical breakdown of costs is for a soda bottler in the United States. I realize there are variations depending on region and brand. I am looking for ballpark estimates based on ...
0
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0answers
24 views

How to optimize this dynamical system? Needing guidelines

I'm trying to solve a growth model, where the author indicates is a dynamical system. I want to ask if someone would help me with some guidelines of how to optimize this, I've been trying to solve it ...
0
votes
1answer
24 views

How can a country develop the skills of its population and have them stay?

Suppose, I am a leader of a country, and a lot of my citizens go to the Gulf states (see 3.1, Page-09) to work as unskilled laborers. I see my population working abroad as laborers as a prestige ...
2
votes
1answer
51 views

What are some examples of goods that entrepreneurship-intense?

Entrepreneurship is considered to be one of factors of production (the other factors of production are capital, labor and land). According to Heckscher–Ohlin model, a country that has an abundant ...
1
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0answers
10 views

What types services count as intermediary consumption when calculating GDP?

What types of services count as intermediary consumption when calculating GDP? I'm not quite sure where the line is drawn. The examples below try to illustrate my confusion. Say a supermarket provider ...
2
votes
1answer
63 views

Coase theorem study material

I'd like to read a more detailed/mathematical analysis on the subject of Coase's theorem. Could you perhaps suggest any advanced textbook/paper on the matter?
0
votes
1answer
30 views

Are the primary dealers obliged to buy treasuries no matter what?

It is said that treasuries are the highest quality debt because the government can always "print money" to pay the debt. But, isn't so that the ones printing the money to loan to the ...
0
votes
1answer
27 views

What are the uses of overnight loans?

As far as I understand an overnight loan is a loan that is settled the next day. Who are the entities that would find it useful to take a loan just for a day? and, what would they use an overnight ...
3
votes
1answer
62 views

Is QE the equivalent of printing money?

I heard somewhere that QE is not the same as printing money -- in fact as I know it, QE is the purchase of assets in exchange for more liquid and high-quality, better collaborated debt. In other words,...
1
vote
1answer
31 views

Why doesn't the San Francisco Bay Area have two-story houses?

The San Francisco Bay Area is an interesting place. Housing prices are through the roof (hehe) and increasing by an average of 5-20% per year for the past 20 years. This is largely driven by an ...
0
votes
1answer
26 views

What is the characteristics of economic downturn and which countries experience economic downturn from 2010 to 2018?

I would like to know the characteristics of economic downturn. Is downturn the same as recession? and which countries experience economic downturn from 2010 to 2018?
0
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2answers
25 views

Term for when using a single number is used instead of a function?

A cost per unit could be 20, but it could also be 20 + 2q (in the cast of the latter, the cost per unit is a function whose ...
4
votes
1answer
39 views

How are historic economic statistics calculated?

Sources like Our World in Data can have statistics that date back hundreds of years. Specifically, the Our World in Data source has a graph of GDP Per Capita in England dating all the way back 1270. ...
2
votes
1answer
35 views

Does levying a new tax on production increase GDP?

Consider a society with no taxes on (e.g) commercial land ownership. One day the government impose a small tax on land owned by the foresting industries. I would assume that prices on goods produced ...
0
votes
1answer
20 views

CAPM and beta for individual stocks

Why do we just assume that the beta is constant for a stock? Could it not very well be the case that the beta is 1.2 in a bear (baisse) market and 0.8 in a bull (hausse) market for an individual stock,...

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