Questions tagged [economic-growth]

An increase over time in the quantity of goods and services produced within an economy.

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-2 votes
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59 views

Why are policy proposals which have strong to overwhelming conensus amongst economists- so controversial among the general public?

Things like necessity for mass migration for robust economic growth/prosperity, open borders, keeping money in the community/shopping local is foolish and does not increase prosperity, Free trade, ...
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1 answer
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Why is the Chinese stock market weak while its economy is strong?

China's economy has had a decent growth rate even post-2008 however, the stock market indices appear to be weak and stuck at more or less the same level since long time as shown below for Shanghai, ...
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What does money multiplier mean?

When (currency-deposit ratio+1)/(currency-deposit ratio + reserve deposit ratio) = money multiplier What does money multiplier mean?
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1 answer
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why is the slow down in economic growth creating inflation

Context: Currently, many central banks and authorities are implementing monetary policies to do monetary tightening in response to current inflation and expectations of even higher inflation in the ...
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Question about the quantity theory of money

M = Money supply V = Velocity = Number of times the average bill changes hands in a time period. P = Price Y = Output T = Transactions Quantity equation M * V = P * Y, M * V = P * T Why do we have MV ...
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Is reserve deposit ratio + currency deposit ratio = 1?

Is reserve deposit ratio + currency deposit ratio = 1? Is cr=rr? Meaning (reserves/deposits=currency amount/deposits)? Thank you!
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What's the difference between "C" in the monetary base and the currency-deposit ratio formulas?

Can we call them variables? C = amount of a currency in circulation, and/or amount of a currency in commercial banks deposits R = Amount of reserves D = Amount of money in commercial banks deposits ...
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Why does the government spending increase by the "same" amount as the demand?

I know that governments can increase demand by increasing employment, transfer payments, and capital for the private sector. Why does government spending increase by the ""same"" ...
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Why S̅=I(r) and S=I?

Why is S̅ constant when it's equal to I(r)? Why is S inconstant when it's =I? Thank you!
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How does I(r) replace 'Investment', to form this formula: I(r)=Y̅-C(Y̅–T̅)-G̅=S̅?

In the case of an equilibrium of loanable funds in the financial market: How does I(r) replace I, to form this next equation? I(r)=Y̅-C(Y̅–T̅)-G̅=S̅ This is an equation regarding the way by which I(r) ...
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Questions about the equation: S=(Y-T-C)+(T-G)=I, in a situation of Equilibrium, in the market of loanable funds

Equilibrium in the market of loanable funds We have: S=(Y-T-C)+(T-G)=I So, (Y-T-C)=S? If that's true, then (T-G)=0, in equilibrium. So the government doesn't have savings, since all taxes are spent ...
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Why is Y constant on the left side of the equation : Y̅=C(Y̅–T̅)+I(r)+G̅, of the Mundell Fleming model?

Since I(r) is not constant, how could Y be constant on the left side of the equation of the goods market equilibrium - IS curve function? Thank you! Ps: I don't know where I should write function, or ...
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Why are I and I(r) equal in the national income formula?

The national income formula is =Y-C-G =I =I(r) Why I=I(r)? Is it just the case in equilibrium? Thank you!
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Question regarding the Y̅=C(Y̅–T̅)+I(r)+G̅ function

How could we include I(r), a non-constant variable, while Y̅, on the other side of the equation, is constant? Thank you!
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Why isn't G defined in monetary terms?

Why is "G" defined as the government demand for "goods and services, and not as the government demand for "money"? Thank you.
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Is it true that lenders only set nominal!!! interest rates in contracts?

If that is true, why would it, economically speaking, be the case?
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Current Value Hamiltonian

I have problems with writing the current value Hamiltonian and finding the related necessary and sufficient conditions: I should max the RHS of : $\rho U_t = log (\chi) + \frac{1}{\rho} log(\lambda)+ ...
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1 answer
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Please check those two production functions, they also seems to be quasiconvex?

Those two are generic production functions that we usually see, and I check the definition of quasiconvex and quasiconcave on wikipedia, and it seems those two graphs satisfy both definitions, and ...
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Are there common alternative models of economic growth, compared to Solow's model

I have been looking at the Solow growth model for many years, but after reading some of the Complexity Economics stuff, the Solow's model does seem way too simple for modelling important real world ...
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Schumpeterian Growth paradigm

I'm working on a Schumpeterian R&D growth model, and I assume that the quality gap between a new machine and the replaced one, i.e. $\lambda$ is sufficiently large such that I have drastic ...
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1 vote
1 answer
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Expanding product variety - Grossman & Helpman 1991

Consider the expanding product variety model of Grossman & Helpman (1991), given an equilibrium price for the intermediate sector equal to $w/\alpha$, how do the authors get the following result ...
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Question on Ramsey model with shock on technological level

I have a question on Ramsey Model. Consider the following one-sector, closed, representative household economy. I have the following Cobb Douglas production function in intensive form $$f(k)=Ak(t)^{\...
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What is meaning of combining factors of production into products?

“An entrepreneur is an agent who buys factors of production at certain prices in order to combine them into a product with a view to selling it at uncertain prices in future”.
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Does a neoclassical production with constant returns to scale implies type of Cobb-Douglas

Assume the neoclassical production function $$F(K,L)\colon [0,\infty) \times [0,\infty) \to [0,\infty)$$ twice continuously differentiable, i.e., F is montone increasing and concave, i.e., $$ \partial ...
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Is is possible that two economies have the same real interest rate, same GDP growth, but different inflations?

This is just a conceptual thought experiment. Is it possible that two countries have the same real interest rate, same GDP growth, but different inflation, one higher, one lower? If that's possible, ...
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1 answer
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Calculating population growth in logs

I want to approximate annual population growth using logarithms; that is, log(population at year 2) - log(population at year 1). Is it okay to use population in thousands, or in millions in these ...
-4 votes
1 answer
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Why other countries stock market fall during war between russia and ukraine

Why other countries stock market is falling during Ukraine Russia war. How does it affects others country's stock market.
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Indices with different base years - growth rate

When you know the growth rate of an index for a given base year, can you apply this exact growth rate to the same index for another base year? What is the formula to transform the same index into a ...
3 votes
1 answer
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Solow residual with cost minimization, calculus (Roeger, 1995)

I am trying to get a good understanding of the steps involved in solving the dual of a maximization problem, namely cost minimization. At some point (last two steps), the author ends up with the ...
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1 answer
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Unified growth theory optimization problem

I'm trying to understand the standard unified growth theory model as summarized on page 60 here: https://www.econstor.eu/bitstream/10419/80210/1/481894578.pdf;Unified The basic household optimization ...
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1 answer
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If LRAS shifts right, won't PPC also shift outward?

Hi, I was solving this question. Here are the answers: I am really confused about part (c) & part (d). My understanding is that when LRAS shifts right, the PPC will shift outwards, to show ...
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1 answer
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How to make a country rich with no ground resources?

I have heard from an interview with N. Chomsky that the British favored India to work their fields instead of creating the machines that are used in the fields, this is a form of economic supressesion ...
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Is there a response to Stagflation that isn't austerity?

A reason why Keynesian economics got discredited and replaced by the now dominant Washington Consensus, was because of the 1970's stagflaysh according to David Harvey: https://newlearningonline.com/...
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Does higher tax encourage high economic gowth?

Text in image: Which of the following is LEAST likely to be associated with a higher rate of economic growth? (A) strong protection of property rights (B) taxes on savings and investment (C) policies ...
1 vote
1 answer
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Labor=1 in standard growth model

In every standard growth model, we suppose labor=1. I learnd that this is because optimization solution of labor is equal to 1. How to derive that optimazation solution? For example, consider that ...
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Countries whose currencies have changed

Countries whose currencies have changed Can you highlight the main reasons as why some countries have changed their currencies ? What will be the impact on their economy once they change their ...
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Stylized facts in macroeconomics [closed]

Max $E_0 \sum_{t=1}^{\infty}\beta^t u(C_t , L_t)=E_0 \sum_{t=1}^{\infty}\beta^t[logC_t-B\frac{N_t ^{1+\gamma}}{1+\gamma}]$ $Y_t=A_t K_t^{1-\alpha}(N_t X_t)^\alpha$ where $X_t$ is labor augmenting ...
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1 answer
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Why is equity trading an active contribution to the development and growth of economy?

How can one explain in a few words why equity trading is an active contribution to the development and growth of economy? At first sight it seems counter-intuitive (for the layman): Buying newly ...
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Can sanctions spur economic reforms?

Is there any evidence throughout history that economic and financial sanctions helped sped up structural reforms, particularly in countries whose economies were previously dependent on natural ...
2 votes
1 answer
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Why is human capital per worker multiplied by wage per worker?

I am studying a paper entitled "The Past and Future of Knowledge-Based Growth" by Strulik et al (2013) where the budget constraint is written as: $$w_{t}h_{t}(1-\tau n_{t})=c_{t}^{1}+s_{t}+...
5 votes
1 answer
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Solow Model with DRS and Human Capital

This is a self study question. I am novice at this and have only basic knowledge of solving such problems. \begin{align} Y &= AK^\alpha H^\beta \\ \dot{K} &= s_KY - \delta K \\ \dot{H} &= ...
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2 votes
1 answer
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Can Autarky be prosperous?

In light of the recent economic sanctions on the Russian federation, I would like to know, if it is theoretically possible for a country like Russia, with a high level of natural resources and ...
6 votes
2 answers
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Where are the equations? Limits to Growth, Meadows et al., 2004

I'm specifically interested in the most recent World3-03 model from 2004. I was just wondering if someone knows how they actually derive their model or any of their predictions? I couldn't find any ...
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2 answers
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Is there a scenario where investment and interest rates could both be increasing

Is there a scenario where investment and interest rates could both be increasing? I know that lower interest rates lead to increase borrowing and thus increased investment spending. So there is ...
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Resources on hunger and sustainable development in India

I need some articles and papers on how hunger causes hurdle to sustainable development in India in the present day scenario. I am doing a research work on this topic. (I am new to this community. ...
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0 answers
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Growth Premium and Debt consolidation

I'm interested in country cases (e.g., Argentina or another EME) where there have been periods of high economic growth but worsening (or at least not improving) fiscal balances. This could be either ...
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Issue with Calculating Revenue Compound Monthly Growth Rate (CMGR)

I am trying to calculate the revenue compound monthly growth rate (CMGR) over a 12 month period of a hypothetical business whose net revenue shares a seasonality trend. Here is an example of data (...
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Recent Research Topics in Macroeconomics (Hopefully Growth Theory)

Im in my last year as undergraduate and i have the opportunity to make a tesis, i have strong foundations in econometrics and macroeconomics but I don't know what the latest research on macroeconomics ...
4 votes
1 answer
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Proof of Saddle-Path Stablility in Ramsey-Cass-Koopmans model

I'm currently struggling to proof the saddle-path stability in the Ramsey-Cass-Koopmans model. Based on the books Introduction to Modern Economic Growth by D. Acemoglu (chapter 7 and 8) and ...
2 votes
0 answers
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Natural regression to study rate of convergence from MRW (1992)

In the paper of Mankiw, Romer and Weil (1992: 422-423) aka MRW there is a transfer from theoretical dynamical model to empirical regression approach as follows. The model suggest a natural regression ...
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