All Questions
15,484
questions
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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 ...
- 113
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0
answers
15
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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
- 1
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0
answers
18
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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{...
- 355
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0
answers
10
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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 ...
- 1
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0
answers
5
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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.
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answers
3
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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 (...
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1
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1
answer
37
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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 ...
- 125
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vote
1
answer
23
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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$, ...
- 249
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1
answer
67
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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}$$ for any $i$ and $j$.
I've proved that $x(p,\alpha w)=\alpha x(p,w)$, but ...
- 125
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23
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Second-degree price discrimination exercise
A monopolist produces output with constant marginal cost equal to 1. There are two of
consumers that are potentially in the market for the good. Consumer A has inverse demand
function
$$p_A(x) = 7 − x,...
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1
answer
16
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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 ...
- 1
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0
answers
17
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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 ...
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votes
1
answer
29
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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 ...
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0
answers
30
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Why would bank runs lead to a decrease of the total quantity of money supply M1?
It‘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). Doesn‘t ...
- 1
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0
answers
19
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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 ...
- 1
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1
answer
22
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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 ...
- 157
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1
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21
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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 ...
- 249
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1
answer
19
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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 ...
- 473
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0
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35
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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 ...
- 307
-1
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26
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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
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1
answer
21
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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 \...
- 283
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0
answers
37
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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 ...
- 101
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0
answers
31
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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_{...
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1
answer
66
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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 ...
- 249
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votes
1
answer
42
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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 ...
- 1
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0
answers
23
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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 ...
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0
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16
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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 ...
- 1
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0
answers
21
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"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 ...
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1
answer
29
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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 ...
- 3
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votes
1
answer
66
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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 ...
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0
answers
11
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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 ...
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13
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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.
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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 ...
- 140
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0
answers
14
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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 ...
- 101
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votes
1
answer
43
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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 ...
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0
answers
12
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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 ...
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-1
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0
answers
17
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Derive differen function of production
Find the optimal cost function, profit function, and input functions of the following supply functions: a. 𝑓(𝑙, 𝑘) = 4𝑙½k½ b. 𝑓(a,b)= (a^½+3b½)^2
1
vote
1
answer
26
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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 ...
-1
votes
0
answers
25
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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. 𝑈(𝑥, 𝑦) = 3𝑥 + 𝑦 5 marks
ii. 𝑈(𝑥, 𝑦) = √𝑥 ∗ 𝑦 5 marks
iii. 𝑈(𝑥, 𝑦) =
𝑥𝑦
𝑥+�
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1
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1
answer
59
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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 ...
- 113
1
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1
answer
63
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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 ...
- 143
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votes
1
answer
46
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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 ...
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0
answers
19
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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 ...
- 133
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0
answers
22
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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. ...
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0
answers
56
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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{...
1
vote
1
answer
46
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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 ...
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votes
2
answers
82
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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 ...
- 149
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0
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25
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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:...
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0
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10
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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 ...
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2
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1
answer
69
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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 $[0,\bar{k}]$,...
