Questions tagged [economic-growth]
An increase over time in the quantity of goods and services produced within an economy.
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Is weak global economy always a “headwind”?
In the most recent (Mar. 20, 2019) FOMC Press conference, Powell said this:
So, global economy was a tailwind for the United States
in 2017. That was the year of synchronized global growth, and ...
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0answers
13 views
Gilt edged securities with lottery prizes worth billions of dollars and other international currencies [closed]
CAN more and more gilt edged securities coupled with many Australian lottery prizes worth many billions of dollars and other foreign currencies equal tradings of international traders?I have no ...
2
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1answer
56 views
Overlapping Generations model: Social Planner solution
Assume we have a model of OVG where there are 2 overlapping generations, youngs and olds, the agents are two period living. The utility function is logaritmic, and the production function is Cobb-...
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1answer
27 views
Here's a question about the solow model [closed]
At first, I was confused by how y keeps increasing after depreciation exceeds savings, then I finally found what was truly bothering me. The fact that when depreciation exceeds savings, capital per ...
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1answer
55 views
Does brain drain really affect a nation's growth trajectory?
Take India as an example. India has been losing most of its bright minds to the west. India also ranks low in development. I would like to get a definitive answer to this cause-effect type question.
...
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1answer
72 views
The growth rate in the Solow model
Consider a very simple version of the Solow model with discrete time, a fixed population size and no technological progress (a fuller description of the assumptions is outlined here). Capital is at '...
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2answers
40 views
German economic growth in 20th century
I have question regarding this great animation: https://www.visualcapitalist.com/animation-the-worlds-10-largest-economies-by-gdp-1960-today/
Why Germany GDP shrunk so much from 1995 to 2000, while ...
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0answers
12 views
Japan economic growth in late 20th century
I have question regarding this great animation: https://www.visualcapitalist.com/animation-the-worlds-10-largest-economies-by-gdp-1960-today/
The lost decade, when started in 1991. However GDP in ...
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1answer
45 views
How to Calculate the productivity multiplier?
Given a Cobb Douglas
$Y_t = A (K_t^\alpha L_t^{1-\alpha}) $
$ K_{t+1} = sY_t + (1-\delta) K_t$
How do we get the multiplier on productivity to be equal to $ \frac{1}{1-\alpha}$?
I understand ...
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0answers
22 views
Logs and percentage change in equation
Suppose I have the following relationship between output $y$, capital stock $k$ and total factor productivity $tfp$,
$$\frac{\partial y}{\partial t}=\frac{\partial k}{\partial tfp}*\frac{\partial tfp}...
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0answers
30 views
The dynamics of c and k in Ramsey model (using the phase diagram)
I am having hard time understanding the dynamics of c and k using the phase diagram, the arrows don't make any sense to me. Any explanation will be a lot of help using the equations given.
Thank you.
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0answers
6 views
gdp growth outliers reflect exchange rate variations
I have nominal GDP for 20 countries and I need it in dollars. I noticed that some observations like Belgium 1986 are havily influenced by exchange rate variations so that we have real GDP growth of 45%...
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1answer
32 views
Dot over a variable, Neoclassical growth model?
Looking at the Neoclassical growth model, I have hard time understanding what dot over a variable mean? I know it is short for taking the derivative with respect to time, I don't understand the ...
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0answers
36 views
Economic interpretation of a CES production function
I am following a paper where a production function of this type is used.
$$Y=\left [\beta K^{- \rho}+\alpha \eta \left (\frac{K}{L} \right )^{-c(1+\rho)}L^{- \rho} \right ]^{-1/\rho}$$
It is a ...
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0answers
26 views
Positive effects of a Tunisia-EU free trade agreement?
Tunisia might be signing a free trade agreement with the EU very soon. It's called ALECA or DCFTA.
Many activists and labor unions are opposing such an agreement because it would result in losing ...
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0answers
16 views
Best financial model to proportionally distribute the company's income to all employees?
I'm planning to start a project of something "innovative". And among some of the parts of the project that I'm thinking about, it's in the term of how money (profits) should be distributed.
The truth ...
2
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1answer
57 views
Why are we using exp(.) as the functional form in the household maximization problem inside the RCK model?
Currently I'm studying the RCK model at my Advanced Macroeconomics I classes.
A question arose almost immediately when I saw the utility function of a household in this model.
The question is: why ...
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1answer
22 views
annualized quarterly growth rate calculating
I was using R to calculate the annualized quarterly growth rate of real GDP by 400*diff(log(rgdp)).
If I perform in this way some of the percentage change is big.
However, if I calculate as 100*diff(...
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1answer
52 views
Wealth Creation: Where does the money come from?
I'm trying to better understand wealth creation– let's use trade as an example.
I've bought a cup for \$2 and sold it for \$10. We've "created some new wealth" there– but without a net increase in ...
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1answer
33 views
The Effects of Demonetisation
I do not wish to get into the details of the Demonetisation implemented by the Indian Government on 8th November, 2016. Endless political debates have already been conducted advocating or berating ...
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1answer
26 views
falling household savings
While reading Mazzucato's "The value of everything", I come across this
The rise in private debt in the US and UK has resulted in household
savings falling as a percentage of disposable income - ...
1
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1answer
74 views
How does the economy of a city work?
I'm interested in learning how the economy of a town is analyzed. For instance, some occupations serve only people in the town, for instance the town grocer, baker, restaurant, dry cleaner, etc. Their ...
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2answers
82 views
How is the GDP growing when nothing else seems to be?
We've had strong GDP growth all three quarters this year. To me, that would indicate that, in at least some areas, we should be seeing growth. However, from my extremely ignorant armchair, it doesn't ...
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1answer
34 views
NEGATIVE GROWTH RATE WITH POSITIVE JOB GROWTH
As per CARE RATINGS for India, in FY18 half of the formal sector firms are showing negative sales/growth but positive job growth? Explain please.
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2answers
39 views
Unsure how to go about computing GDP for the following problem
I came across this question where the GDP for the years 1995-1997 is given. Then I was asked to compute the growth rate every year which I'm aware of.The next question was to compute the average which ...
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1answer
11 views
What's a « 1-Ratio» ? From a text on Capital's share of GDP
In this article, the writer talks about the «capital share, as a percent of GDP — here just 1 – labor share percentage»
What's this 1-labour share percentage?
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1answer
65 views
Why is entrepreneurship a factor of production?
I'm a student at a faculty of economics. The professor asked us a question to which I still can not find an answer, which is why entrepreneurship is part of the production factors?
I would be very ...
2
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1answer
27 views
I can't find (lny-lny0)/t meaning [closed]
I cannot understand what (lny-lny0)/t means. Of course we use this to show growth rate. But in the mathematical sense, I cannot know what it is. Is it diferrentiaion?
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0answers
16 views
Empirical implementation of Milbourne et al's 2003 model of growth for time series data
I'm interested in testing the relationship of public investment in human capital and infrastructure, and the rate of growth of the GDP for Colombia, during a 20 years period. Given that I'm only an ...
1
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0answers
54 views
labor share and growth
Is there a link between the level of the labor share and growth?
In standard models growth is the rate of (labor augmenting) technical progress and labor force. So does that mean if the labor share ...
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2answers
35 views
A maximization program expressed by per capita variales - Ramsey model
I have a problem to be maximized with the following program
$$max\int_{0}^{\infty}\left\{ u\left(C\right)+\beta S^{\chi}\right\} e^{-\rho t}dt$$
s.t
$$\dot{K}=AK-C$$
$$\dot{S}=\left(1-S\right)S-\...
2
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1answer
42 views
Ramsey growth model - per capita vs aggregate variables
I am reading a paper Okuguchi,1981 with a Ramsey growth model. There is a constant population growth $n$ such as $L(t)=e^{nt}$. The way he writes the Hamiltonian is quite interesting (equation 5 on ...
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0answers
10 views
Economic history/geography of the UK (1960-today)
I am not an economist and I am looking for reference knowledge about how the economy of the UK (mainly focussing on England/Scotland/Wales) developed over the past 5 decades. The kind of information I ...
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2answers
90 views
Why is a Normal Yield Curve a sign of a healthy economy?
I think the question is pretty self explanatory. I'm just trying to understand the logic behind why an upward sloping yield curve indicates a good economy?
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1answer
59 views
Perpetual Youth Model
I am reading the famous paper of Blanchard,1985. There are some fundamental stuff that I did not really get.
1) Why they call it "perpetual youth"?
2) On page 225, he mentions the cohort size. So, ...
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2answers
24 views
Nominal Growth rate above Nominal Interest Rate
I'm reading Ray Dalio's "An In-Depth Look at Deleveragings", and at one point he's talking about central banks providing liquidity and credit support, and he states:
"This produces relief and, if ...
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1answer
20 views
Devising a model for inflation for a closed points system
I am working on a project that involves points. The idea is that users will earn points and redeem them for certain rewards.
The means via which the users earn are fairly limited (They can attend a ...
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0answers
16 views
Optimal Time-Consistent Fiscal Policy with Finite Lifetimes
I am reading Optimal Time-Consistent Fiscal Policy with Finite Lifetimes by Calvo and Obstfeld.
Here is the paper :
Calvo and Obstfeld (1988)
In fact, their model consists of two stages. In the ...
2
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1answer
49 views
Does credit really help an economy?
I'm reading Ray Dalio's How the Economic Machine Works, and although I understand the role of credit in an economy, I don't understand whether credit actually adds any value to an economy.
Ray says ...
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2answers
39 views
How does domestic demand affect the domestic currency's value
If an economy grows, due to a tax reduction for example, how does that affect the exchange rate?
My logic would be that reduced taxes put more money into people's pockets, which they then use to buy ...
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0answers
135 views
Improve my solution: Question on solow model
There is a question about Solow growth and Ramsey model,
compared to solow model, the Ramsey model is better to explain growth patterns across countries because it predicts a slower convergence ...
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1answer
758 views
Quarterly GDP growth: YoY vs QoQ / terminology
Quarterly GDP growth can be calculated either in terms of YoY change or - in the case of seasonally adjusted data - in terms of QoQ change. (A third option would be to annualize the QoQ rate.)
To ...
3
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0answers
65 views
Solow growth model deriving solutions
I was reading a note on Solow model in continuous time, and it said we can derive K, C, and Y from the key equation. But the steps were omitted, and I have no clue with it. How can I derive these ...
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2answers
82 views
Must a market-based economy constantly expand?
I vaguely recall from my reading of Adam Smith’s “The Wealth of Nations”, during college, that he opined that a market-based economy must constantly expand. Is this recollection correct and, if so, ...
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2answers
111 views
a question on the endogenous growth model
I have such a question on the endogenous growth mode”:
In the macroeconomics literature there are various ways in which the growth process in the Ransey-Cass- Koopmans model has been endogenized. ...
4
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1answer
64 views
Interpretation of the Cross Partials of the Cobb-Douglas
Consider a Cobb-Douglas Prod. Function $$Y=AL^{a}K^{1-\alpha}$$
This has the cross-partial:
$$\frac{\partial^2 Y}{\partial K\partial L}=(1-\alpha)\alpha AL^{\alpha-1}K^{-\alpha}$$
Is the ...
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1answer
103 views
Sustainable growth in the long run [closed]
Suppose that, in addition to physical capital and labour, an economy requires a fixed factor and a non-renewable resource to produce the final good. Prove that an economy with these input requirements ...
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1answer
48 views
Is there objective evidence that the US economy is “booming”?
I realize that it's the political pundits that are saying it, but they never seem to provide evidence that the economy is "booming". The dictionary definition of "booming" is having a period of ...
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0answers
43 views
Social conflicts in economic growth models
I'm highly interested in theories and models which explain how do social conflicts influence economic growth.
What papers on the topic can you recommend? I was searching for some seminal and most ...
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0answers
20 views
Raising the elasticity of substitution in an economy
Papers such as de la Grandville (1989) and Klump/de la Grandville (2000) have shown that a higher elasticity of substitution leads to higher economic growth. My question is, if there is a way to ...
