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4
votes
1answer
21 views

Signalling models and out of equilibrium beliefs

Consider the simplest version of the Spence signalling model. There are two types of worker, with either productivity $\theta_H$ or instead productivity $\theta_H < \theta_L$. The proportions of ...
2
votes
1answer
20 views

Why would using real-time settlements have helped combat some of the chaos that occurred during the January 2021 GameStop saga?

I read on cnbc.com (mirror): Tenev also advocated for real-time settlement instead of two-day settlement in order to help combat some of the chaos that occurred during the GameStop saga. Why would ...
0
votes
1answer
25 views

How do increasing tax rate helps control inflation?

Also, do the opposite that is lowering tax rate controls deflation?
0
votes
1answer
16 views

What is business cycle frequency?

What does the term 'business cycle frequency' mean? Annual, quarterly, or monthly frequency? Thanks. I have yet found a definition on google.
4
votes
2answers
544 views

Are financial markets “unique” for each “currency pair”, or are they simply “translated”?

This is something I've been long wondering about. Let's say that I have statistics showing the daily closing Bitcoin price in USD since early 2009. Great. Now, if I wanted to get the daily closing ...
0
votes
0answers
26 views

Does net exports has to do with borrowing and lending?

In my course notes, it says that "when net exports is negative it means that the country is borrowing from other countries" but I do not get it if net exports is negative that only means ...
2
votes
0answers
25 views

Social Planner problem: two period

The production function is $F(K_t,N_t)=AK_t^\alpha N_t^{1-\alpha}$ and depreciation $(\delta)$ is equal to 1. The given preferences are as follows: $$U(c_1,l_1,c_2,l_2)=\gamma log(c_1)+(1-\gamma)log(...
0
votes
1answer
14 views

Sunk costs - Book value and Market value

i try to understand the concept of sunk cost and how we compute sunk costs when there is a difference between book and market value. For example, if the book value of assets is ...
3
votes
1answer
33 views

Bellman Equation with Two Discount Factors

For the following social planner's problem $$ \max \mathbb{E_{0}}\sum_{s=0}^{\infty}\beta_{1}^{s}(\alpha U(C_{s}^{1}))+\beta_{2}^{s}((1-\alpha)U(C_{s}^{2})) $$ $$ s.t.\ \text{some constraints ...
0
votes
0answers
28 views

Mathematical question in macroeconomic task

I am currently working on a project where I want to explore how changes in a couple of currencies affects the income for my countrys exported fish. My country (Norway) sells it fish in 4 different ...
2
votes
0answers
15 views

Relationship between CURRCIR, CURRENCY, and MBCURRCIR?

The FRED website has Currency Component of M1 (CURRENCY) Currency in Circulation (CURRCIR) Monetary Base; Currency in Circulation (MBCURRCIR) Monetary Base; Total (BOGMBASE) M1 Money Stock (M1) ...
0
votes
0answers
19 views

References on Cobb-Douglas Function

I am wondering why everybody uses Cobb-Douglas production functions? Nowadays they are so standard that they are just written down without further discussion. Does anybody know more about this and can ...
5
votes
3answers
2k views

Will printing more money during COVID cause hyperinflation?

When COVID started, many countries started printing loads of money and handing it out to their people. Here are some examples US is printing money to help save the economy from the COVID-19 crisis We’...
1
vote
4answers
66 views

What happened when the money from share issuance is spent?

Let's assume that new bank is incorporated and it issued 100 000 shares with nominal value odf $100. Let's also assume that all shares are sold for the same price, so bank now has 10 million dollars. ...
2
votes
0answers
15 views

Market clearing price and dual variables in auctions

Suppose the allocation of an auction (or a market) is defined by the solution of a linear program. Then it is known that the associated clearing price is given by the dual variable associated to the ...
1
vote
1answer
57 views

How much revenue could an 100% land value tax be able to generate for the Indian government?

So as a Georgist (follower of Henry George), I believe most form of taxation is immoral and economically inefficient except the land value tax (not to be confused with property taxes) and other ...
-2
votes
0answers
28 views

Mark vs Zuck game theory [closed]

Mark and Zuck share an apartment. They have different views on cleanliness and, hence, on whether or not they would be willing to put in the hours of work necessary to clean the apartment. Suppose ...
3
votes
1answer
98 views

Why utility rather than expected utility in Cochrane's “Asset Pricing”?

Cochrane "Asset Pricing" Chapter 1 p. 6 says We model investors by a utility function defined over current and future values of consumption, $$ U(c_t,c_{t+1}) = u(c_t) + \beta \mathbb{E_t}[...
1
vote
2answers
334 views

What does price embody ? Do we constantly undervalue some type of products?

I'm not sure to fully get the meaning of prices. If I understand well, there are two drivers of it : The theory of demand and supply and thus prices are driven partly by the utility that agents get ...
0
votes
1answer
52 views

Did the Bank Of England say QE doesn't work?

https://www.bankofengland.co.uk/working-paper/2020/does-quantitative-easing-boost-bank-lending-to-the-real-economy Staff Working Paper No. 883 Published on 14 August 2020 From the conclusion: If the ...
-3
votes
0answers
11 views

Profit Maximization need help pls [closed]

Curently I am biit confused in this topic but this practice question must be send in a few hours, if somebody whould briefly help. Thank you in advance
2
votes
1answer
40 views

Is amazon retail not very profitable?

I have heard it claimed that amazon's retail business is actually not very profitable (it's claimed that most of their profit comes from their web services). A rebuttal to this claim I have heard is ...
0
votes
0answers
33 views

Simple supply and demand problem

I'm not sure about this, can I ask you if I'm wrong? Thanks. Data: $$Q_{s}=P/2$$ $$Q_{d}=P-42$$ Questions: a) How many units will be traded at 35 dollars? At $14 dollars? b) What quantity at what ...
-3
votes
0answers
13 views

Do you have a stata file for this problem set? [closed]

http://www.its.caltech.edu/~mshum/gradio/blp.pdf I need a stata file for this problem set. Please share with me if you have it.
1
vote
1answer
33 views

Lagrangian multiplier and optimal bundle

I would like to know where I am wrong (if I am) and why I am wrong here please: If a consumer has an income of 600 euros to spend for good x (Px = 10 euros) and good y (Py = 5 euros). What is the ...
1
vote
1answer
27 views

Blackwell's Sufficiency Conditions for a Contraction:

I wondered if anyone could throw some intuition on Blackwell's sufficiency conditions: (1) Monotononicty; (2) Discounting; Would be genuinely appreciated to hear both terms expressed in plain English.
0
votes
0answers
29 views

Fixed cost, sunk costs and variable costs

i need to answer to this question but i'm wonder if i need to use the short-run cost function (C = wL * rK) of not. Can you help me ? This is the statement : A small business owner employs 5 workers. ...
0
votes
0answers
7 views

Help to find China Data

do you know where can I find data about the R&D expenditure of china from 1976 until 2020?
0
votes
1answer
14 views

Why does US equities valuation have the downward pressure on USD?

While making readings on economics I came across a sentence: ..large valuation gap that has opened up between US equities and the rest of the world. This could help bid up non-US equity valuations and ...
1
vote
2answers
86 views

Does elasticity make sense for different levels of prices? If not, how can we fix that?

Let's say we know that our customers can't make sense of a raise in 5% of the price. It's too little for them to notice. However, an increase above 10% is easily noticed. If this is true, different ...
0
votes
0answers
9 views

Does it make sense to calculate price elasticity in respect to some percentage?

I was trying to calculate how much the price of a product impacts some company I'm analysing. At college, we learn that the price elasticity of demand is the percentage change in demand divided by the ...
0
votes
1answer
19 views

What is the resolution down to which the annual inflation value can be controlled?

Judging by previous posts in the site, the inflation target is set annually to 2% by the Federal Reserve. Regardless of the reasons behind this choice, I am curious to understand how precisely can the ...
0
votes
0answers
3 views

Example of a (not quasi-linear) production function whose inputs are not perfect substitutes but are not asymptotic at the axes

I'm looking for an example of a family of production functions indexed by, say, rho, where the inputs become closer and closer to perfect substitutes as rho approaches 1, and yet, the marginal product ...
0
votes
0answers
8 views

Problem with the discrete demand curve

I am starting to learn microeconomics from a book named Intermediate Microeconomics by Hal R. Varian. The first chapter is on market. I was attempting to solve the end text problems but was stuck. ...
2
votes
2answers
449 views

Does Modern Monetary Theory (MMT) provide a useful insight into how to manage the economy?

According to advocates of MMT, the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce the spending capacity of the private sector. ...
0
votes
0answers
31 views

Quasilinear Preferences

So, I understand that a utility function of the form $U(x,y)=x^{0,5}+y$ is linear in $y$ and so there is no income effect on $x$. But what about the function of the form $U(x,y)=x^{0,5}+\frac{y^{2}}{2}...
0
votes
2answers
37 views

Typical duration of bonds purchased in QE

I know that QE involves the purchasing of government bonds by the central bank "printing money" but I am curious about what the typical time to maturity of those bonds are. I.e. the typical ...
0
votes
2answers
33 views

Buying and selling in the stock market

I am a total beginner to this, but from the few online videos about how (practical) trading works, I understand that when buyers dominate the market the prices go up and when sellers dominate the ...
-1
votes
0answers
60 views

The economic function of inflation [closed]

I often see people who ask how much inflation is a good amount of inflation, or why deflation is bad. My understanding of the systemic role of inflation (and please correct me...), is to neutralise ...
1
vote
1answer
21 views

Is GDP the market value of goods consumed or goods produced in a time period?

Definitions across various resources state that GDP is the market vaue of all goods 'produced' in a certain time period. But while calculating GDP by expenditure method, consumers' spending is one of ...
1
vote
3answers
73 views

Why is deflation bad for economy?

As now many people are talking about the inflation of US dollar on the account of the COVID-19 pandemic and the printing of trillions of US dollar bills, the price of decentralized cryptocurrencies ...
-1
votes
0answers
9 views

Questions regarding application of Intertemporal Choice

I recently encountered the application of intertemporal choice decision in page 201, can anyone describe the math involved behind the scholarship savings topic ?
-1
votes
0answers
11 views

It is argued that in optimization the first part of the second-order condition appears opposite to their interpretation? [closed]

It is argued that in optimization the first part of the second-order condition appears opposite to their interpretation
0
votes
1answer
34 views

Constant to the power of t in steady state

I am wondering how to get the steady-state for the following Euler equation. I know that we can get rid of time in subscripts. However, here I have a constant (a) to the power of $t$. Does anyone know ...
0
votes
1answer
33 views

How does the treasury determine the rates of the bonds they sell?

My understanding is that price and yields are determined via supply and demand. How are the interest rates determined when the bonds are auctioned off?
0
votes
1answer
18 views

Creating a pragmatic, useable (not theory heavy) proxy for a currency basket for a set of economies

This is currently, a gedanken experiment, but may well form the basis of a whitepaper - or better still, an actual project. I am trying to come up with a practical way of creating a "currency ...
2
votes
1answer
47 views

Interacting covariates with the instrument in the first stage

If I want to run a 2 stage least squares (2SLS) regression with: Relationship of interest: $Y = \alpha + \beta X + \varepsilon $, where $X$ is the endogenous explanatory variable of interest. If I ...
1
vote
1answer
53 views

Contradictory FOC and maximizing solution

I have to maximize the following function - $\max_{x \in (0,1)} (((p_1x)^{2r} + (p_2(1-x))^{2r})/2)^{1/r}$ where, $p_1$ and $p_2$ are drawn from uniform distribution [0,1] and are considered to be ...
2
votes
3answers
71 views

What is the mechanism for when the fed purchases a gov't or corporate bond from a non bank?

My understanding is when the fed buys a bond from a bank they use bank reserves (bank reserves are swapped for a bond). How does the transaction differ when a non bank (ex hedge fund) is involved?
0
votes
1answer
27 views

Sidrauski Monetary Model and Neutrality

In the Sidrausk model, money is in the long run super neutral. Does this result only apply to the case where money and consumption are separable in the utility function, or also to the case where they ...

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