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Definition of semi-elasticity

The "$x$-elasticity of $y$" is defined as $\epsilon = \dfrac{\partial y/y}{\partial x/x}$. The $x$ goes down, and the $y$ goes up. But we have two definitions of semi-elasticity: $\epsilon_1 ...
robertspierre's user avatar
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Walrasian equilibrium

Why is there a walrasian equilibrium if excess demand is 0? How can I structure the answer to give a concise response. Do I have to include the 5 assumptions to prove its an equilibrium
sophie's user avatar
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How can I find a Radner equilibrium?

Consider an economy with 2 consumers and 1 good. There are 2 dates, date 0 and date 1. At date 1 there are 3 states of nature. The utility functions for the 2 consumers are the same: $$u_i(x_i)=\frac{...
Ludwig Gershwin's user avatar
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Total cost and public cost of sports stadiums

I'm interested in doing data analysis on the cost of large sports stadiums (in the US). I have an excellent data source in "Financing Professional Sports Facilities" (Robert A. Baade, Victor ...
Hilts's user avatar
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5 views

Credit profile bank dataset or Machine learning

Can you advise please any credit profile Bank free available datasets for Markov chain and machine learning computational experiments? For my student masters thesis. Thank you.
Player 777's user avatar
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Aggregate elasticity of demand in a differentiated products market

Is the notion of aggregate elasticity of demand applicable in a market for slightly differentiated products? Intuitively, it seems like it should. If market output can be expressed in a single number (...
Dale's user avatar
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1 answer
37 views

If utility function is convex, what can be said about preference relation?

It is known that if a utility function is concave, then it is quasiconcave, and the preference relation is convex. What can be said if a utility function is convex? I've found on the Internet then in ...
Paul R's user avatar
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About infinite strategy sets and $\epsilon$-equilibrium from Game Theory: Analysis of Confilct by Roger Myerson

I am studying infinite strategy sets using Myerson's Game Theory: Analysis of Conflict. On Page 143, he defines an $\epsilon$-equilibrium as follows: Definition For any nonnegative number $\epsilon$, ...
Beerus's user avatar
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1 answer
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If utility function is homogenous of order 1, then partial derivatives of demand function are equal

Prove that if $U(\alpha x)=\alpha U(x)$, then $$\frac{\partial x_i(p,w)}{\partial p_j}=\frac{\partial x_j(p,w)}{\partial p_i}$$ for any $i$ and $j$. I've proved that $x(p,\alpha w)=\alpha x(p,w)$, but ...
Paul R's user avatar
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Second-degree price discrimination exercise

A monopolist produces output with constant marginal cost equal to 1. There are two of consumers that are potentially in the market for the good. Consumer A has inverse demand function $$p_A(x) = 7 βˆ’ x,...
Sofia Delacruz's user avatar
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Marginal and Average costs for constant returns to scale production function being constant

Suppose that we are dealing with a production function $q = f(k,l)$, of inputs capital and labor. If this function exhibits constant returns to scale then I know that both the marginal cost and ...
Nick's user avatar
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Engine efficiencies on small scale ( ice engines vs turbines

A formula one engine is around 51% efficient (and if it weren't for the regulation and rules it might have been close to 55 to 60% efficient read somewhere in Google) that the extreme side but there ...
Doctor Pinocchio's user avatar
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1 answer
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Showing UMP and EMP do not exhibit duality if the assumption of local non-satiation is absent

I have been trying to use the contradiction method to prove this, but it does not seem to be working. Suppose $x^*$ is optimal in both EMP and UMP. Then $u(x^*) \geq u(x')$ for all $x'$ in $B_pw$. And ...
pacmanscuriousbloob's user avatar
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30 views

Why would bank runs lead to a decrease of the total quantity of money supply M1?

Itβ€˜s specifically about the German banking crisis of 1931. I get how the banks increasing their reserves and cutting their loans (starting 1930) would cause money contraction (at least of M1). Doesnβ€˜t ...
Iris L's user avatar
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Why cant other country Imitate China give people work in place of relief subsidies? especially country with low-employment rate?

From my shallow perspective as a Chinese, whenever there is a low economic growth rate, there is a massive infrastructure building plan as to give people work in place of relief subsidies to stimulate ...
Tong Su's user avatar
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1 answer
22 views

What is the difference between "The effects of Monetary Policy" and "The effects of Monetary Policy Shock"?

I know this may be a silly question. I always thought these were different but some people in the literature use them interchangeably and I was wondering are they different? If so, how are they ...
EHMJ's user avatar
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1 answer
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Is my understanding of Arrow's dictatorship correct? The dictator is free to update her preference and the social choice will always follow her taste

Suppose $R$ is a social ordering, $f$ is the social choice function, and $R_i$ is an individual preference. A profile of individual preference is $<R_i>$. $f(<R_i>)=R$ Suppose $i=1$ is ...
dodo's user avatar
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1 answer
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Which Spanish scholastic economist said that economies could not be controlled even if one could track every transaction?

Which Spanish scholastic economist said that economies could not be controlled even if one could track every transaction? I think the context was an argument against Keynesian economics, Cartesian ...
Geremia's user avatar
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How to add a linear contraint between state variables to a current time Hamiltonian?

Let's say I have an objective function $F$ with state variables $A,B,C$ and relative equations of motion, I can create the current time Hamiltonian with $H_C = F\{A,B,C\}+\alpha * \dot A+\beta * \dot ...
Antonello's user avatar
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Equilibrium asset prices of a risk-free bond and a stock

Setup: Two-period economy with two equally likely states of the world in the second period. Two consumers with Bernoulli utility and same discount factor
TomUcl2003's user avatar
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1 answer
21 views

FOCs for profit maximization using a transformation function

I'm (still) reading the microeconomics textbook of Mas-Colell et al. On p. 135, the profit maximization problem (PMP) for producers is introduced; characterizing the technology as $Y = \{ y \in \...
chsk's user avatar
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0 answers
37 views

Forecasting and Structural Breaks

Let's say I am using walkforward evaluation for forecasting a certain time series with ARIMA and I want to test for structural breaks. And then I detect structural breaks. How can I use this ...
a12345's user avatar
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31 views

Differentiation of a composite utility function

Taking the utility function $U: ln(c_1)+\beta ln(c_2)$ with $c_t=\sqrt{c_{Nt}c_{Tt}}$, t indicating a time period 1,2. Ignoring any b.c.'s. I am having issues interpreting the marginal utility wrt $c_{...
econstudent's user avatar
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1 answer
66 views

Auction with independent private values - An example from Game Theory: Analysis of Conflict by Roger Myerson

I have difficulties understanding the equilibrium analysis of the following auction game: Suppose that there are $n$ bidders in an auction for a single indivisible object. Each player knows privately ...
Beerus's user avatar
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1 answer
42 views

General mechanism of bond price and real interest rate movements

Jeremy Siegel writes in "Stocks for the long run" that when better than expected economic data is released bond prices fall and real interest rates go up. Why do bond prices fall with ...
mhsnk's user avatar
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0 answers
23 views

What does it mean for a country to use another country's currency?

Argentina's new President-elect is proposing replacing the peso with the US dollar as the country's currency. What exactly does it mean for country A to adopt country B's currency? And how does it ...
Barmar's user avatar
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Why do firms produce less than what is socially optimal in an imperfect competition?

I just read an introduction to imperfect competition in my AP microeconomics textbook and one of the practice questions asked about production in imperfect competition. The answer choices were ...
Luke Lee's user avatar
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21 views

"If the aggregate supply is linear, demand shocks cannot affect average unemployment", what does it mean?

Aggregate Supply: $\pi_t =\pi_{t-1} -\alpha(u_t -\bar{u})+e_t^S$ Welfare: $W_t =-cu_t -f(\pi_t ), c>0, f''(\cdot)>0$ $\bar{u}$: natural unemployment rate $e_t^S$: supply shock In Romer's ...
newcomer's user avatar
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1 answer
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Define "Equilibrium" in Market Design task

in a current market design problem set I am very confused by the given questions. We are often asked to find "an equilibirum of the [auction type, e.g. second-price auction]". The amount of ...
lele_tz's user avatar
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1 answer
66 views

Does anybody know why the Fed Funds Effective Rate has 3 evenly spaced dips in between every FOMC meeting, that suddenly stop on March 21st 2018?

In general the effective rate was much more volatile the further back you go, but now it is perfectly straight, what has changed? The fact that it is exactly three evenly spaced dips of 8-10 basis ...
Ski Mask The Slump God's user avatar
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0 answers
11 views

Taylor Rule Model Specification: Serial Correlation and Interest Rate Smoothing

I'm reading this paper by Abrams and Iossifov. The paper investigates electoral cycles influence on monetary policy by estimating a Taylor Rule reaction function using OLS. The authors describe the ...
alvalentini's user avatar
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Can anyone pls do the derivation of the cournot aggregation condition and make it explanatory

I'd like to know how the aggregation condition was derived.
Ghost's user avatar
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1 answer
40 views

Understanding consumption units normalisation by $u^\prime (c) $

It is frequently noted that if utility is given by $u(c)$, then the object $$ \frac{u(c)}{u^\prime (c)} $$ puts the utility in consumption units via the normalisation by $u^\prime(c)$. What is the ...
Debreu's user avatar
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0 answers
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How could a market be designed to prevent hoarding?

Imagine that someone has been put in charge of creating a new market for some kind of commodity. They have ultimate regulatory power. What kind of market mechanisms could they put in place to ...
Crashworks's user avatar
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1 answer
43 views

How to compare Preferences in Utility Functions?

When looking at utility functions, how do you compare preferences? I understand the economic concepts, but the math part is holding me down from understanding a lot in the textbook. (I am not typing ...
SelfTaughtEcon's user avatar
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0 answers
12 views

Calculating Effective Maturity with Negative Cash Flows

The formula for effective maturity. Suppose that an installment plan also shows additional borrowings of a debtor. That is, at some point in time (other than the inception date) the borrower is given ...
Larx's user avatar
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-1 votes
0 answers
17 views

Derive differen function of production

Find the optimal cost function, profit function, and input functions of the following supply functions: a. 𝑓(𝑙, π‘˜) = 4𝑙½kΒ½ b. 𝑓(a,b)= (a^Β½+3bΒ½)^2
Rohit kunar's user avatar
1 vote
1 answer
26 views

The consideration of export in calculating national income

Is export/imports a part of factor income i.e returns from the act of production? If not, then here is my counter argument. Export is the equivalent value which is added to the goods when it is ...
TheCuriousOne's user avatar
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0 answers
25 views

Microeconomics to show if indifference curve is convex to the original [closed]

) for the following utility functions and determine whether they have convex indifference curves i. π‘ˆ(π‘₯, 𝑦) = 3π‘₯ + 𝑦 5 marks ii. π‘ˆ(π‘₯, 𝑦) = √π‘₯ βˆ— 𝑦 5 marks iii. π‘ˆ(π‘₯, 𝑦) = π‘₯𝑦 π‘₯+οΏ½
Lonjezo 's user avatar
1 vote
1 answer
59 views

Why Is Having a Strong Manufacturing Base Important to a Country's Economy?

I was living in Pittsburgh in my teens and twenties during the collapse of the steel industry and remember how profoundly it impacted Pittsburgh. Some say that due to the large percentage of the ...
Tikhon's user avatar
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1 vote
1 answer
63 views

MR Diagrams touching y axis

The following is from an exam question: To my mind this is plain nonsense. If Q is zero, AR and MR are zero, not some point above P1. My question: is there any significance in drawing this diagram ...
havlock's user avatar
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1 answer
46 views

Using Variance for Nash Equilibrium

For the mixed strategies, the expected utility (or payoff) is used to find the mixed strategy Nash Equilibrium. The main assumption is players try to maximize their expected payoffs. However, I think ...
Tunay Sabri Yüksel's user avatar
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0 answers
19 views

What are the ways to take account of inflation?

If one wants to analyze the influence of inflation on other macro economic indicators, what are the best/standard way of how to use it? I've found 3 variants: As is (yearly values). To take ...
Andrew's user avatar
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0 answers
22 views

Deflated Consumption Data

I have been researching the literature of consumption inequality for my project. Most of the articles have deflated the consumption datasets, before measuring the inequalities with different indices. ...
Tunay Sabri Yüksel's user avatar
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0 answers
56 views

Mixed Strategy Nash Equilibrium

Consider the game of Battle of Sexes, where $$\begin{matrix} &&Women\\ && Football & Resaurant\\ Men&Football&2,1 & 0,0 \\ &Restaurant&0,0 & 1,2 \end{...
Tunay Sabri Yüksel's user avatar
1 vote
1 answer
46 views

Complex Analysis VS Differential Geometry as signals/preparation for grad school?

I am an undergrad (in math and econ) interested in pursuing a PhD in the latter. I can afford a pure math elective this semester and I am torn between diff geom and complex analysis. Which one is more ...
keynesian geometer's user avatar
0 votes
2 answers
82 views

t-test result inconsistent with regression

I have two batches of data and I want to check whether the response variable is different across the two batches. I first did a t-test and found that the means of the response variables in the two ...
Justin's user avatar
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1 vote
0 answers
25 views

Ultimatum game where fair offers are automatically accepted

Has there been any experiments with a variant of the Ultimatum Game where a fair offer is automatically accepted? For example, the game below, where rule 2 has been added to the classic ultimatum game:...
Zags's user avatar
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0 answers
10 views

Regression and RDD give results in opposite directions but both statistically significant

I am conducting an RDD on an attitude and how it shifts over time due to a shock (sharp RD measured in days), I am using RDROBUST in STATA. I do not think I have coding errors but I need help ...
rdd_help's user avatar
2 votes
1 answer
69 views

Does this contraction mapping map strictly concave functions into strictly concave functions?

Consider the following functional equation: $$TV(k)=\max[W(k),\beta V(f(k))]$$ where $\beta\in (0,1)$, $W(k)$ is continuous, increasing, bounded, and strictly concave function defined on $[0,\bar{k}]$,...
Accept Cookies's user avatar

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