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3 views

The role of reinforcement learning in Economics

While working on different research projects I got fascinated by RL which got applied to many fields that are focused on agent based modeling. Though it is a field in Machine Learning what interests ...
0
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0answers
7 views

Why are mathematical methods not used in calculating human performance prospects in real life to allow for the wiser usage of government funding

For example, if it is known that there is a greater chance of a person living in a given area achieving success, why not focus the resources on these areas? Tools for this seem to exist (SABRmetrics ...
0
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0answers
4 views

Show that if there exists an unemployment equilibrium, then money wage rigidity must exist in the complete Keynesian model [closed]

Show that if there exists an unemployment equilibrium, then money wage rigidity must exist in the complete Keynesian model. The following data is given for an economy- Y = 250 – 250r (IS curve) M0/P = ...
2
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1answer
8 views

Stationarity vs weakly dependence

I am doing an undergraduate course in econometrics where we are using the text Introduction to Econometrics by Dougherty. While going through time series, it was mentioned that one of the necessary ...
0
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0answers
6 views

Calculate Average Annual Real Interest Rate Given Average Annual Inflation

Given that the average annual inflation between the years 1993 and 2012 is 5.6%, what is the average annual real interest rate between 1993 and 2012? I know the formula growth = $(\frac{X_{t+p}}{X_t})^...
0
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0answers
11 views

what would happen if there was no stock market?

i am by no means an economist, i’m just really curious to what some of the pros and cons would be if the united states got rid of the stock market. would income levels be more even?
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0answers
6 views

Calclulate average annual inflation

The price index in the year 1993 (the base is 2012) is 60. The annual nominal interest rate between 1993 and 2012 is 66% on average. What is the average annual inflation between 1993 and 2012? I know ...
0
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0answers
9 views

Calculate GDP Deflator

If the nominal GDP of an economy in quarter 2 in 1983 was 400 units, and the real GDP of the same economy in 2012 is 700 units, what is the GDP deflator (base is 2012) for this quarter? I know that ...
1
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2answers
28 views

If you simply “copy” the trades of a professional trader, but with less money, isn't that *guaranteed* profits?

I keep coming back to this thought: I just don't understand the complex "rules" or "patterns" of how the prices of Bitcoin (or any financial instrument) move up and down, so I will ...
1
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2answers
21 views

Why if the economy will produces too much there will be an increase of prices in nearly all goods and services?

I am taking an online Economics course and not understanding why if the economy will produces too much there will be an increase of prices in nearly all goods and services? If for example there will ...
3
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1answer
28 views

Local nonsatiation

Suppose that $x^*$ satisfies $x^*\succsim x$ for $\forall x\in\{{x∈X|p·x\leq m}\}$. How can we prove that $x\succsim x^*$ $\Rightarrow$ $p·x≥m$ if $\succsim$ is locally nonsatiated? My idea for this ...
1
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0answers
17 views

Economics behind reverse auctions with occasional non-profiting suppliers

I was curious about the theory behind a reverse auction system where some suppliers act in a non-profit manner, namely, that their consideration of extra-auctions benefits of providing their service ...
0
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0answers
12 views

Meaning of high bond yields [duplicate]

Lately, rising longer-maturity bond yields have been in the news. Many people write as though the rising yields show that "the market" believes that the Federal Reserve will raise interest ...
2
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1answer
44 views

Proof of Concavity of Cobb-Douglas Function

Given the function $F(\mathbf{x})=x^{a_1}_1x^{a_2}_2 \ldots x^{a_n}_n$ defined on the set $S=\{\mathbf{x}=(x_1, \ldots, x_n) \in \mathbb{R}^n: x_1>0, \ldots ,x_n>0\}$ with $a_1,a_2,\ldots,a_n &...
0
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0answers
4 views

PPC's real output value

Does every point on the PPC have the same real output value? If not, then what point on the PPC does the long-run aggregate supply represent? Every article I've read so far only says that it ...
1
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0answers
15 views

Can one do post identification in SVAR models?

Let say you have price and quantity data ($P, Q$) and you want to examine how Q responds to a shock to P. If you are certain Q is either demand or supply, you can impose some sign restrictions. But if ...
2
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0answers
18 views

Epstein zin and resolution of uncertainty

I'm reading Simon Gilchrist's notes here. I understood everything until and including page 14, where it reads $$\frac{W_h^{1-\rho} + W_l^{1-\rho}}{2} \geq \frac{c_h^{1-\rho} + c_l^{1-\rho}}{2} $$ and ...
1
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0answers
11 views

Is it customary for sellers to pay the commission in brokered transactions?

This question focuses on brokered transactions where 1) the intermediaries act as brokers (agents), not dealers, and 2) where both sides have an agent. In the U.S., in buying/selling houses, it is ...
3
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1answer
36 views

How can the Fed enforce exit criteria if they begin yield curve control?

Over the past year, the notion yield curve control has resurfaced and appeared on FOMC minutes, decades after its last implementation. According to the Fed's introduction page: As the U.S. continued ...
1
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1answer
23 views

Would be there redistribution of wealth from actors with sticky prices to actors with more flexible prices under stagflation?

Suppose there is inflation in our country, but we take a short term, thus some prices are sticky and there is non-positive "growth" of the real GDP. In other words, we experience stagflation....
0
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0answers
29 views

Why does some government tax non-economic activities such as estates tax? [closed]

Examples of taxes on non-economic activities (i.e. neither on production nor consumption) include estates tax, capital gain tax, stamps tax. These are from transfer of ownership. The presence of all ...
1
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0answers
24 views

Solow Growth Model and Steady States

$Y^A_t = AK^\alpha_t L_t^{1-\alpha}$ $Y^B_t = BK^\alpha_t L_t^{1-\alpha}-bL_t$ where B > A and b is a fixed cost (per unit of labor used). I found the steady state of $Y^A_t$, but I couldn't find ...
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0answers
13 views

Greater the price elasticity of demand, greater is the gains from trade” [closed]

Is this statement True or False for a country that imports the commodity from abroad? Justify and logically analyze your argument.
1
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1answer
22 views

Second Order Derivatives in Becker's Crime and Punishment

I'm trying to understand Becker's seminal paper Crime and Punishment (1968) particularly the parameter of cost of apprehension and conviction and their second order partial derivatives. The paper ...
0
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0answers
10 views

Microeconomics (signaling) [closed]

Suppose there are 10 individuals in a society, 5 of whom are of high ability, and 5 of low ability. Individuals know their own abilities. Suppose that each individual lives for two periods and is ...
0
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0answers
11 views

Why invest in index funds? [migrated]

I want to start investing in the stock market (I am 26) and I am a bit confused about the advantages of index funds (I am sorry if my questions are very basics, but I just started learning about this)....
0
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1answer
41 views

Seemingly contradictory relationship between bond yields and economic growth?

I have a few seemingly contradictory ways of viewing the relationship between economic growth and bond yields: Reductions in FFR are largely induced by IOER. Since IOER and bonds are competing ...
3
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2answers
739 views

How is money destroyed when banks issue debt?

Bank of England (2014): Money can also be destroyed through the issuance of long-term debt and equity instruments by banks. How is money destroyed when banks issue debt? Say Bank X issues a £100 10-...
2
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4answers
170 views

Why does anyone prepare their own food?

I'm not an econ person, so this is a super naive question, but here goes: why, given the comparative advantage that specialization produces, does anyone prepare their own food rather than buying from ...
-3
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0answers
44 views

What are the drivers of the $4trln increase in m2 from Feb 20 to Jan 21?

M2 has increased about 4 trillion from Feb 20 to Jan 21. I know there are different theories on why that is (qe, unemployment benefits, stimulus checks, businesses drawing down on lines of credit) ...
3
votes
2answers
244 views

Under what condition is a cost function strictly concave in prices?

Define the unit cost function as $$ c(w) = \min_{z\geq 0} w\cdot z $$ subject to $f(z)\geq 1$. Where $w$ is a vector of input prices, $z$ is the vector of inputs and $f$ is a production function. We ...
0
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0answers
34 views

Price level calculation

I am currently reading Dying of Money by Jens O. Parsson and he criticizes the way price level is calculated. Basically he tries to make a case that since money are not only used to purchase goods but ...
0
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0answers
17 views

What are some examples of Market Failure and Government Intervention in Italy? [closed]

I'm currently writing and essay about the Economics of Italy, I have been searching the internet for Market Failure examples in Italy but I can't find anything. I gotta admit I'm not very good at ...
1
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0answers
21 views

Von Neumann–Morgenstern implications for repeated strategic games

I am currently studying game theory and have just begun looking at repeated strategic games. In my lecture notes, it states that "preferences are unique up to an affine transformation", ...
-2
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0answers
31 views

Isnt the government just an hoa [closed]

If I create an HOA, and give it a military and everything, and just dont use the particular weapons that are illegal and only use it to attack homeless people isnt that the same as the government? ...
-1
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0answers
13 views

what is a bond yield and how did it recently affect the stock market [closed]

can you explain to me how did the recently drop in nasdaq index is related to the rising bond yield in an understandable way im in the process of basically interpreting this article https://www.cnbc....
0
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1answer
22 views

Synthetic control question on donors

I'm using synthetic control methods. The treatment group has covariates that are the extrema of the values across itself and all potential donor units. So, say, on covariate $x_1$, the treatment unit ...
0
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0answers
14 views

Verification of logic behind instrumental variable approach

I would like to know whether the following reasoning regarding the instrumental variable approach is acceptable. I understand there are case-by-case factors that affect the applicability of ...
1
vote
1answer
22 views

Can I add a variable that varies only with time in Least Squares Regression model with a time-fixed effects term?

I'm estimating this equation for the trade flows between various countries at time t: ($i$ and $j$ are countries) The last 3 terms are control variables, one of which is oil prices. Can I add oil ...
0
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0answers
22 views

Is it feasible for another country to attack the US dollar via counterfeiting? [duplicate]

Assuming, for the sake of the question, that a well-resourced adversary (another country, most likely) had the means and motive to conduct economic warfare against the United States through large-...
2
votes
1answer
29 views

Is there a financial hypertrophy ? Could you make a case for finance?

I've the impression that finance is in hypertrophy. But I'm not an expert on it, so I'd like those who are more knowledgeable than I am to do a [steelman][1] of it. The things that make me thinking ...
-2
votes
1answer
27 views

How can a non-fiat currency be backed by gold?

Question is really simple- The value of gold is it self controlled by supply-demand, which insinuates that gold is fiat, only valued because people accept it and not because it has a use case. from ...
0
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0answers
26 views

Solving for parameter value

I have the following maximization function - $\max_{x \in (0,1)} (((p_1e_1x^2)^{r} + (p_2e_2(1-x)^2)^{r})/2)^{1/r}$ where, $p_1$ and $p_2$ are drawn from uniform distribution [0,1] and are considered ...
1
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2answers
55 views

What happened to the dollar in Nov 1978?

Arthur Burns (1979): "Benign neglect" of the external value of the dollar came to an end dramatically, and I would hope irrevocably, in November 1978. What event(s) of Nov 1978 is Arthur ...
1
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0answers
18 views

Do applied papers introduce new notation for every regression?

I am currently writing an empirical paper which reports on the results from estimating a number of regression models. Question: is it standard to introduce new notation for each of these models, or ...
0
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1answer
35 views

Why would foreign asset purchases by PBOC temper yuan appreciation?

Suppose the PBOC buys a bunch of dollar-denominated bonds, using its dollar reserves. All else equal, what effect should this have on the yuan-USD exchange rate? And why? It amounts to trading non-...
1
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1answer
31 views

Rationalizable strategies and Weak Dominance

Can I find the rationalizable strategies for a game where none of the players has strict dominance but only weak dominance?
2
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0answers
21 views

Remove seasonality in R

I have data of total exports of fish from my country in the time period 2010-2020. Since our currency (NOK) has gotten weaker to the currencies we are trading with, we have gotten a lot more value ...
0
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0answers
10 views

Who has comparative advantage in the following situation? [closed]

Assume there are only two skills to be discussed. A can cook 4 pots of rice per hour OR forage 4 rabbits per hour. B can cook 2 pots of rice per hour OR forage 2 rabbits per hour. Clearly A has ...
0
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1answer
16 views

What's the minimum number of datapoints in order to run a diff-in-diff?

I was thinking about running a diff-in-diff with fixed effect in order to deal with a panel data experiment. The problem is that I don't know how many datapoints I need in order to the experiment be ...

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