Questions tagged [linear-algebra]
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18
questions
2
votes
0answers
47 views
Recursive Models of dynamic linear economics (Hansen / Sargent, 2014) - optimal linear regulator problem / solution of bellman equation p. 34 ff
The optimal linear regulator problem according to Hansen/Sargent, 2014, Recursive models of dynamic linear economies, on page 34 ff. is stated as follows:
$-E\sum_{t=0}^{\infty}\beta^t[x_t' R x_t+u_t'...
3
votes
1answer
74 views
Leontief input output model with column sum greater than 1
In a linear algebra textbook I came across the following question (not included in the answer key):
Consider an open economy with a consumption matrix
\begin{equation}
C =
\begin{...
1
vote
1answer
90 views
Calculating natural rate of unemployment
I have sample data on unemployment rate in a market and am looking to calculate the natural unemployment rate. The natural unemployment rate I obtained is constant over a time period, which is not a ...
0
votes
0answers
38 views
How can I represent this observation regarding options in a formula?
By observing how an option's expiration P/L changes as its underlying asset price changes, we can discover the following system of equations:
$\begin{cases}S_{Long} = C_{Long} + P_{Short} \\ S_{Short} ...
0
votes
2answers
55 views
What are the concepts in Linear Algebra that model the idea of Identification Strategy in Econometrics?
I just would like to know what concepts one should know before talking about identification strategies in econometrics. I see people studying such concepts but I'm not sure they realize (or even know) ...
-1
votes
1answer
45 views
$x\sim y$ implies $x+a\sim y+a$ for any $a\geq0$ and $x,y\in\mathbb R^n$, then the preference is linear?
$x,y,a$ are vectors in $\mathbb R^n$
We say $a\geq0$ if all directions of the vector $a$ is greater or equal to zero.
We want to prove (or disprove by counterexample) that:
Suppose $x\sim y$ ...
0
votes
1answer
30 views
Derive the growth rate of an equation
I have the following equation:
$$\mu =\left [s_{\pi }-v(s_{\pi }-s_{W})+\zeta \right ]$$
And I have to derive its growth rate, which is:
$$\dot \mu =-\frac{v}{\mu } (s_{\pi }-s_{W})\dot v$$
Do ...
0
votes
1answer
26 views
Hep with total differentiation of an AD function [closed]
Is there anyone who can help me with a total differentiation exercize. I am starting with the following formula for AD:
$$x=\mu ^{-1}(g+i+e)$$
Where $\mu$ is the Keynesian multiplier.
And have to ...
6
votes
1answer
123 views
Econ Intuition for Jacobian inverse in demand system
Consider the following simple linear demand system (in vector notation) with n different products
Demand: $\quad\mathbf{q=B\left(a-p\right)}$
Inverse demand: $\quad\mathbf{p=a-B^{-1}q}$
where $\...
0
votes
1answer
268 views
Calculating the elasticity of substitution between factors of production
Following the work of Lu (1967) (Full text available here!) I got stuck trying to derive the elasticity of substitution between factors. He use the formula developed by Allen, that when the production ...
0
votes
1answer
277 views
How to utilize the projection matrix in econometrics?
When consider the following DGP : $y=X\beta^{*}+\epsilon$ where $\beta^{*}$ is a $\tilde k\times1\ $ vector.
Define the projection matrices: $P_{X}=X(X^{T}X)^{-1}X^{T}$ and $M_{X}=I-X(X^{T}X)^{-1}$.
...
3
votes
1answer
189 views
Has this differential calculus inequality approach to optimizing the production possibility curve exist?
I just started micro-economics at my community college and my teacher mentioned the derivative of the PPF for two output resources. I thought about it a while and came up with this approach. Some of ...
2
votes
0answers
85 views
Visualising eigenvectors/values
This might seem like an odd question but seeing as I haven't had any formal education in solving ratex models yet, it is something I have been thinking about a lot recently. Consider the following ...
3
votes
2answers
172 views
Budget hyperplane in n dimensions
Take the set of all vectors $x = (x_1, \cdots, x_n)$ that are
solutions to $p_1x_1 + \cdots + p_nx_n = I > 0$. Show that this set
has $n-1$ dimensions.
I have somehow managed to get myself ...
3
votes
1answer
412 views
When gradient of utility function is a zero vector
In Advanced Microeconomic theory by Jehle and Reny is said that if $\mathbf{x^*}$ is a solution to the following maximization problem $\max_{\mathbf{x} \in \mathbb{R}_+^n} u(\mathbf{x}) $ subject to $...
3
votes
0answers
494 views
Short Run vs Long Run Cost Functions
Let $z_a$ and $z_b$ are two vectors of inputs. $z_a$ is variable in both long run and short run however $z_b$ is only variable in long run.
Now let's suppose that the price of one of the inputs in ...
6
votes
3answers
256 views
How to deal with a singular Leontiev inverted matrix?
I am currently studying and experimenting the input-output methodology. It is a 1930's method based on national accountings that allows to measure the interindustry flow of good and services.
...
3
votes
1answer
56 views
How can I write a conditional expectation of finite state markov process in matrix notation
NOTE: This question is related to the econometric method explored in the following two questions:
Multiplicative factorization of stochastic growth time series--solving for an eigenfunction/...
