Questions tagged [consumption]

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110 views

Why does 'government consumption'in NK models not add to utility

In almost all NK models public government consumption (like coastal defences) or private government consumption (like primary and secondary education) is by default 'wasteful'. Government consumption ...
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1answer
51 views

Are all fixed capital public goods?

fixed capital: any kind of real or physical capital (fixed asset) that is not used up in the production of a product public goods: goods that are non-rival and non-excludable in consumption Both of ...
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0answers
83 views

Is utility function used in customer data/profile analysis? What alternatives in practice?

Utility function is great theoretical concept but is it used in customer data analysis or in building customer profile (e.g. from Big data or cash register/checkout data, ecommerce history) or in ...
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1answer
3k views

How does one calculate an optimal consumption bundle if the MRS only contains one variable?

For example, say the MRS has simplified to the form $MRS(x,y) = -y$, given a utility function \begin{equation*} U(x, y) = e^{(x + ln(y))^{1/3}} \end{equation*} With a budget line of, say, $2x + y = ...
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1answer
101 views

Why is there consumption sharing in Arrow-debreu time-zero complete markets trading model?

Specifically, I am looking at this paragraph ...
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1answer
237 views

What was happening in Madagascar during 1971-1996?

In the course of my research I have been examining these days macroeconomic time series for per capital household consumption, using the databank of the WorldBank. The unit of measure was constant ...
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1answer
89 views

Capital Asset Pricing Modeling for Consumption

Suppose Asset $A$ has a variance of 7 and its returns are negatively correlated with consumption, while Asset $B$ has a variance of 3 and its returns are uncorrelated with consumption. According to ...
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1answer
478 views

Saturation of durable goods

It seems one factor ignored (or is it?) in economic theory is saturation of durable goods. By this I mean the fulfillment of fixed need for durable goods. We can imagine income to be divided between ...
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2answers
79 views

Impact of a reduction of distortions in a flat consumption tax

I ask about the survey results of some prominent Australian economists shown here (Which is a similar Australian-centric version of the very interesting IGM Forum Surveys). The results of the survey ...
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2answers
127 views

Reverse of broken window fallacy for file sharing/piracy

Adult Swim roughly brings forward the following argument in the video 'film piracy feeds babies': While jobs may be lost in the movie or music industry, they might be created in another. Money that ...
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1answer
160 views

What are the economic benefits of SLAPP in file sharing/piracy?

Spin-off from Piracy/File sharing - Why aren't songs, movies or books given for free? What are the economic benefits of SLAPP in or out of file sharing/piracy? There's a comment in above link ...
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2answers
135 views

What are some of the economic arguments for gender-neutral marriage?

What are some of the economic arguments for same-sex or gender-neutral marriage (GNM)? Which arguments have merit, don't have merit or have yet to be decided/tested? For example, it is hypothesized ...
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0answers
63 views

Competition vs. cooperation [closed]

Why has competition evolved to be the leading principle of market based economies? Can this sustain in the long run? I am thinking about cooperation as a better principle of doing things in the long ...
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6answers
905 views

Piracy/File sharing - Why aren't songs, movies or books given for free?

Why aren't songs, movies or books given for free (+ads)? i. Every minute, people are pirating and there is no stopping that. If people see 0.99 for a song on iTunes and 0.00 for a song on a torrent ...
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0answers
45 views

Keynesian consumption law not applicable in USA ?

I was looking at some numbers and saw that in USA in 2010 consumption was at 70% but savings were close to zero and that even places were there is high income savings are still low while the keynesian ...
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1answer
116 views

Will the goods market be in equilbrium along the AD curve?

This is a question which was asked in the entrance to Jawaharlal Nehru University's (New Delhi) entrance for their post-grad program specializing in International Economics in 2014. Which of the ...
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1answer
114 views

What are the widescale economic ramifications of people holding onto their money instead of spending it?

Pretty simple question: people get rich by saving more money than they spend. What are the implications of people holding onto their money instead of spending it? Do rich people save more money (...
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2answers
169 views

Re-evaluation of Consumer Price Index (C.P.I.) weights

How are the weights of the various household items in the Consumer Price Index (C.P.I.) basket decided, i.e., how are they re-evaluated every year? Is it done manually or automatically? If its done ...
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0answers
95 views

Europe not self-sufficient in terms of food requirements and consumption?

An acquaintance once told me that Europe is not self-sufficient in terms of food consumption as it does not have enough farmland and farmers to produce enough for all its people, especially in terms ...
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1answer
394 views

Liquidity trap and consumers' reaction to an increase in money supply

I've understood that when the nominal interest rate reaches the zero lower bound there is nothing that the monetary policy can do to increase the output level of a certain economy. Because $i=0$, no ...
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1answer
102 views

Lifecycle Consumption Models and Dispersion in Consumption

Lifecycle models base on the assumption that households want to maximize their consumption and at the same time insure themselves against income shocks. However, there is a lot of (c.p.) consumption ...
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5answers
3k views

How does a reduction in consumer spending in favour of consumer saving, affect economic activity?

Let's say our government runs an advertising campaign, encouraging its citizens to reduce spending money on consumer items, and instead save more money. Let's say the campaign is successful, and ...