All Questions
Tagged with macro or macroeconomics
3,002 questions
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Determine the value of this hypothetical token
Suppose there is a token, an issuer of the token, and a reclaimer of the token. Every year at the beginning of the year the issuer creates and sells at auction 10 tokens. At the end of each year the ...
- 343
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1
answer
35
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Quantifying stability and source of value
Suppose economies A, B and C have equal GDP. However:
90% of A is goods of strictly investment value (artwork, NFTs)
90% of B is tools for producing other goods (resources, machinery)
90% of C is ...
- 223
2
votes
1
answer
103
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Why in Italy and Spain, as productivity grows, wages don't grow too?
As you can see in this report: https://rpubs.com/lovepeacejoy404/crescita_salariale between labor productivity and the average wage there is a correlation of 76% (Pearson index), while with the ...
- 31
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22
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Looking for a guide to data at daily frequency or higher
I found that one of the most valuable parts of an economics education was learning about the available data and major surveys. The NIPAs and the Integrated Nstional Accounts (which I believe will ...
- 369
2
votes
1
answer
80
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Proof of the Lucas' Cost of Business Cycles
I am trying to derive the parameter used by Lucas to measure the cost of business cycles, namely:
derived in the paper "Macroeconomic Priorities".
I already searched in several papers but I ...
1
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0
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24
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The correct classification of system costs: maintenance, excess consumption, necessary consumption, development?
Yesterday I saw in one of the videos on YouTube a classification of the expenses of the system consisting of:
maintaining the system
necessary consumption
excess consumption
development
Please tell ...
- 11
1
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0
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34
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Why do I keep hearing that Americans are running down their pandemic savings but the data doesn't show that?
I keep hearing on the news etc. that Americans are running down their savings, even from well known figures like the head of Blackrock etc. Granted I have not been looking at economists specifically. ...
- 111
3
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2
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265
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Solving stochastic difference equation in New Keynesian model (FTPL textbook derivation)
In Cochrane's "Fiscal Theory of the Price Level", I am struggling with the following derivation. Take the first line as given, where $\pi_t$ and $i_t$ are random processes adapted to $\...
- 31
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0
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46
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DSGE: Difference between Goods Market Clearing Condition and Resources Constraint
I’m currently reading about DSGE models and I’m little bit confused about the difference between the resources constraint and the goods market clearing condition. Are they the same? If not, how is ...
1
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0
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31
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Datasets with high frequency measures of monetary policy shocks for the US
I am looking for sources (datasets) with high frequency measures of monetary policy shocks for the US. For the Euro area I have found this, MPD DATASET. I haven't found anything similar for the US. I ...
- 223
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1
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65
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Euler Equation - small open economy
How would I find the Euler equation for:
$$ U=\sqrt{C_1}+\beta{\sqrt{C_2}} $$, where $$\beta=1/(1+r)$$
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0
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62
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Log-linearisation of the Euler equation
I am struggling to log-linearize the following around the steady state:
$
U'\left(e^{z_t} F(k_t, 1) + (1 - \delta)k_t - k_{t+1}\right) - \beta E_{z_t}U'\left(e^{z_{t+1}} F(k_{t+1}, 1) + (1 - \delta)k_{...
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1
answer
42
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How does tax level of country effect the international value of a currency?
I'm trying to figure out if a currency gets valued or devalued internatopnally if there is more taxation.
Looking at places like Dubai, id think itd get valued more on the basis that people would be ...
- 467
1
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0
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37
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Ricardo Reis and S&D decompositions of inflation
In this presentation at around 21:20, Ricardo Reis discusses a two-sector New Keynesian model to explain that the supply and demand decompositions of inflation by Adam Shapiro as not as informative as ...
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2
answers
97
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Why limit the maximum size of deposit-CBDC transfers?
From page 33 of Dirk Niepelt's Money and Banking with Reserves and CBDC (October 2022):
Some central banks consider caps on CBDC balances to limit the maximum size of deposit-CBDC transfers ("...
- 192
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1
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78
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Economics book which study video game economies
I saw this very interesting Ted Talk which discusses the Economics of a popular game called Tf2. This piqued my curiosity, but I couldn't find much more of this content on youtube. Searching for the ...
- 467
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1
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103
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Is John Maynard Keynes an economic liberal or an economic nationalist?
I am working on a research project about political economy. However, I stumbled upon differences in the interpretation of the orientation of John Maynard Keynes. Some sources indicate that Keynes is a ...
0
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2
answers
385
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is labor a scarce resource?
We all know about the four factors of production: land (natural resources), labor (physical human effort), capital goods, and tech. And, most of us are aware of the fundamental definition of scarcity: ...
- 13
1
vote
1
answer
325
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BOP balancing to 0, use of capital and financial account
Please someone for the love of god help me. I can't find two sources on the internet that don't have conflicting or very difficult to understand information on the balance of payments.
I have various ...
1
vote
2
answers
231
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Infrastructure a capital good?
A capital good is produced to produce other goods or to provide services, which means it doesn't get consumed entirely in the production process. Then, in what sense roads, buildings, bridges, statues,...
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22
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Where's the current research at the intersection of labor market and macroeconomics?
I am into monetary economics and DSGE modeling, so I'm not very up-to-date when it comes to research on labor markets. Can anyone give me an overview of the current research trends on labor markets (...
- 121
2
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1
answer
103
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Subjective discounting factor in the utility function
Consider the following utility function in an infinite time-horizon set up:
\begin{equation}
U= \int_{0}^{\infty} e^{-(\rho-n)t}u(c(t)) dt
\end{equation}
Why we assume that $\rho >n$, where $\rho $ ...
- 319
1
vote
2
answers
796
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Why is the reward for providing capital goods interest?
In high school economics, students are taught that there are four factors of production: land, labour, capital and enterprise, and that the rewards for each are respectively: rent, wages, capital and ...
- 75
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1
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42
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What are the purely financial implications of exempting taxes for the public spending?
I've had this question for quite a long time by now ; wouldn't it be far more efficient in terms of administrative costs and beuraucratic efficiency to exempt public spendings from its taxes?
Of ...
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4
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0
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48
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Aggregation in macroeconomic model with expanding product varieties
The final good is produced by a competitive industry combining a set of intermediate
products, $i ∈ [0, N_t ]$ , using a CES aggregator:
\begin{equation}
Y= \left( \int_{0}^{N_t} y(i)^{\frac{\sigma -1}...
- 277
0
votes
1
answer
75
views
Large quantity sale of CNY at current currency value
Some company wants to sell large quantity of CNY and buy USD on Forex. Let current currency value is 1 CNY = 0.14 USD at the time moment on Forex. When company sell large quantity of CNY, money supply ...
- 139
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1
answer
65
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How an annual rate of 1.1 percent in the first quarter of 2023 is calculated on the website of bea.gov
The table 1 says
Real gross domestic product (GDP) increased at an annual rate of 1.1 percent in the first quarter of 2023
(table 1),
1.1 percent is derived from Real GDP
They are on the Right Hand ...
- 101
3
votes
2
answers
201
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Utility maximization for a household consisting of a woman and a man, with gender discrimination
Consider a household consisting of a woman and a man, with preferences over leisure and consumption given by:
$U(\overrightarrow{c},\overrightarrow{l}) = \ln{c} + \ln{l^F} + \ln{l^M}$
where $\...
- 2,351
4
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1
answer
1k
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Three types of Neutral technological Change
Can you tell me why the isoquants changes as per pic below in the three cases of neutral technological change: i) Hicks neutral, ii) Solow neutral, iii) Harrod neutral
- 277
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1
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148
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Definite Integral technique for Differential Equation
Update. I'm reordering this post to make the core question more clear.
Given the following problem:
Infection model: The number of people $N(t)$ affected by a pandemic at time $t$ is modelled by the ...
- 1,011
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0
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126
views
How is QoQ and YoY inflation calculated from data in the table below
I am confused about reference point for both QoQ and YoY. Is for Q1 is it (Q1 - 0)/0 * 100?
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3
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0
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96
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Open Economy IS-LM with Perfect Capital Immobility
As a part of self-study for entrance exams I was trying to solve the following problem:
The problem with this question is that I feel like the equation for $TB$ is incorrect, because we are given ...
- 667
2
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0
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275
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Solow Model - speed of convergence
This is a question also for those with a good expertise in micro. For micro guys who wanna go streight to the question, just jump to equation $(1)$
I'm studying the Solow growth model.
Let's write the ...
- 277
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1
answer
79
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Inflation adjustment: CPI less than one
I need help on how to adjust my figures by inflation.
I have two pieces of data. The first one is a company's nominal expenditures during the 2015-2020 period:
...
- 113
6
votes
1
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649
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Balanced growth path definition in the Hicks neutral steady state with technology
In the Hicks neutral Solow Model with technology where $Y_t = A_t F(K_t,L_t)$, and labour and technology growths are held constant (exogenously), how is the balanced growth path defined?
I read that ...
user43302
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0
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40
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What would happen if we always built new homes to keep the house prices stable?
What would happen if the government passed a law to always keep on building new houses so the housing market never appreciated? What would be the economic impacts of this?
Currently housing is in ...
- 111
1
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2
answers
165
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General Solution Differential Equation
We have the following system of ordinary differential equation. To solve this using diagonlsation we do the following. My concern is that my general solution is a subtly different result, I've checked ...
- 1,011
1
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0
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58
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Meaning of "everything else remaining the same"
Suppose in an economy, there is a representative firm, the government and a representative household who all have their individual budget constraints. The household maximizes its utility function and ...
0
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2
answers
443
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Why does increase of national debt of the USA not lead to inflation?
Increase of national debt is increase of money supply.
But why does increase of national debt of the USA not lead to inflation?
Thanks.
- 139
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1
answer
229
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How to prove that an increase in the money supply leads to devaluation of the currency?
In one article I've read that increase in the money supply leads to inflation and exchange rate change.
For example, if we have double increase in the money supply then we'll have double change in ...
- 139
1
vote
0
answers
37
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In a New Keynesian model, why do firms not take the interest rate into account when discounting their future profits?
I understand that firms usually discount future prices using the discount factor $M_t = \beta^t u'(c_t)$. Both the presence of $\beta$ and $u'(c_t)$ make sense to me as they reflect the (im)patience ...
2
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2
answers
454
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What's wrong with a deflationary economy?
It is my understanding that central banks around the world strive to achieve a stable inflation rate of around 2%. It is claimed that this is because steady low inflation helps contribute to the ...
- 129
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1
answer
40
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Modelling the inefficiency of redistribution in case of proportional taxation and lump-sum subsidy
I would like to model the following situation in the simplest possible way.
First, a government imposes a proportional tax on the whole population, say, x% of income for each household.
But then, it ...
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1
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66
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Research in Applications of Machine Learning Techniques to Economics
I am a new graduate student in economics, and my advisor has recently focused on applying machine learning techniques to economics. It seems natural for me to take up this area, but I heard the rumors ...
- 121
1
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1
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260
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What is the household i’s intertemporal budget constraint (utility depends on household consumption and neighbourhood's average consumption)?
Assume that household i derives utility from consumption, but now lifetime utility is given by the following expression:
$$ U_i = \sum_{t=0}^{\infty} e^{ -\rho t}\frac{1}{1-\theta} \left(\frac{C_{i,t}}...
- 33
1
vote
1
answer
79
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How to derive the a = rB identity from the CES production function?
I am wondering how using this particular production function
$$ Y = F(K,L) = \left(\alpha K^{\frac{\sigma -1}{\sigma}} + (1 - \alpha)L^{\frac{\sigma -1}{\sigma}}\right)^{\frac{\sigma}{\sigma -1}}$$
...
2
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2
answers
159
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Solow long run growth model question
I've been stuck on an exam question regarding long run growth
Consider the following model of economic growth
A) Derive the equilibrium growth rate of capital, and hence find the steady-state values
...
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2
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1
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182
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Why does not Uncovered Interest Parity hold exactly? Or does it?
I am using the UIP condition before taking an approximation and, therefore, expecting UIP to hold exactly.
I want to understand why UIP calculated for a pair of currencies
a) does not hold exactly (...
- 41
1
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4
answers
210
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Textbook Recommendation for IS-LM AS-AD Models
I am currently taking an intro to macroeconomics class, and I am looking for undergraduate level study material to understand the IS-LM model and its interactions with the AS-AD model. Can you give me ...
- 11
1
vote
2
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84
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Why do sticky prices make output partly determined by demand?
First time going through the basic new-keynesian model and i understand the math behind it okay. I also get that output being partly demand determined is the transmission mechanism for monetary policy ...
- 11