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Questions tagged [macroeconomics]

Macroeconomics is a branch of economics dealing with the aggregate economy as a whole, rather than individual markets.

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Structural breaks in price time series: when to test?

I am investigating the price transmission between two inflation indices within the same sector but at different stages of processing. For example, I might be looking at the relationship between raw ...
André Goulart's user avatar
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is there any specific way to convert a country's gdp to us dollars?

I need to convert Indonesia's real/constant GDP(rupiah) base year 2010 to USD. is it like basic convert using exchange rate based on the year I look for? or is there other way? I am concerned with the ...
Melati Nada S.'s user avatar
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22 views

In describing the multiplier process, is it right to

explain in terms of increase in national income --> increase in consumption and increase in savings? If I assume mpc is 0.90 and initial govt injection is $1: Injection of \$1 increases national ...
user1311104's user avatar
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0 answers
19 views

Why does domestic currency appreciate if purchasing power increase?

As is known, if inflation increase then purchasing power of domestic currency decrease and people buy USD. Thus domestic currency depreciate. But why does domestic currency appreciate if purchasing ...
Mike_bb's user avatar
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Cash transfer from USA to country B

I read that cash is transferred from USA (USD) to country B by airplane. At first bank in country B send cashless dollars to its correspondent account (for example 250 000 000 USD) in bank of USA. ...
Mike_bb's user avatar
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How to calculate exchange rate (non-PPP rate) if we know purchasing power of two currencies?

Let we know: old purchasing power in country A (currency A) old purchasing power in country B (currency B) old random exchange rate (A/B) (non-PPP rate) and new purchasing power in country A (...
Mike_bb's user avatar
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24 views

DSGE some derivation

I am currently studying the lecture note from Jesus. In page 49, he provides 4 equilibrium conditions: $$\frac1{c_t} = \beta E_t\left\{\frac1{c_{t+1}}\left(1 + \alpha e^{z_{t+1}}k_{t+1}^{\alpha -1}l_{...
muz1991's user avatar
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Can a financial institution's headquarters location misrepresent service sector GDP in other regions?

In calculating GDP using the output approach, can a financial institution's headquarters location misrepresent the service sector's contribution to GDP in other regions? For example, imagine a ...
Anonymous M's user avatar
1 vote
1 answer
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Questions about output, quantity, level of output and quantity of output, investment level

Hope your week went well. These may be basic facts known to many but I am afraid that I have misunderstood the terms. Does quantity of a good mean the amount demanded or supplied? Does output refer ...
user1311104's user avatar
1 vote
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22 views

Money Supply and the Budget Constraint in Lagos & Wright 2005 model

Context I'm studying the Lagos & Wright (2005) model as presented in the Chapter 3 of the book "Money, Payments & Liquidity" by Guillaume Rocheteau and Ed Nosal. Simplifying the ...
PernaPaulo's user avatar
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26 views

Set the price to maximize profits

Suppose there's a patented and perishable product that all people will need sometime in their lives which they would rationally give all the resources they could access to purchase. How would a seller ...
user121330's user avatar
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Savings when money market is in equilibrium (LM curve in IS-LM model)

When the money market is in equilibrium, supply of real money balances is equal to the money people hold in hand as liquidity, right? Which means entire real money balance is at hand as liquidity (...
Nipuna Saranga's user avatar
-1 votes
1 answer
42 views

How redenomination leads to strengthening of national currency?

I read that redenomination leads to strengthening of national currency but I didn't find more details. How is it possible? Thanks.
Mike_bb's user avatar
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Is cause of undervalued currency the low cost of labor force or vice versa?

I read in some source that cause of undervalued currency is low cost of labor force. In another source I read that low cost of labor force is conclusion of undervalued currency. What case is true and ...
Mike_bb's user avatar
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Thought Experiment: What would happen to the UK economy if many people suddenly moved their savings into managed investment portfolios?

Different people obviously have different risk appetite and ability to sequester money away in investments, however I believe there is a large amount of money that people are keeping in savings ...
WF Castle's user avatar
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1 answer
63 views

What is the point of allowing informal sections of an economy?

In Germany, many stores don't accept any card (eg: Resutarants). The main reason for this is thought to be to avoid tax. Many of these stores would not be able to actually keep themself running with ...
Cathartic Encephalopathy's user avatar
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0 answers
30 views

MSC, MSB, MPC and MPB in privately funded news organization?

I have thought of 2 possible ways the MSC (Marginal Social Cost), MPC (Marginal Private Cost), MSB (Marginal Social Benefit) and MPB (Marginal Private Benefit) could differ for a privately funded news ...
Goat Man's user avatar
1 vote
1 answer
86 views

How can Unemployment rise when Nonfarm Payrolls rises

I'm new to macroeconomics and trying to understand recent macro news. On June 07 2024 two indicators released: Unemployment increased from 3.9% to 4.0% US Nonfarm Payrolls (NFP) rose by 272K in May, ...
guest6571429's user avatar
3 votes
2 answers
591 views

What is equilibrium economics

I was taking a course I complexity economics. My professor told me economics that are taught in say Romer, Blanchard are equilibrium economics. My question is what does he exactly mean by equilibrium ...
physics's user avatar
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What are the true normalized cointegration vectors in R (ca.jo, cajorls and VECM functions) and how to interpret them?

I'm struggling with understand the difference between (and why there is this difference) the normalized cointegration vectors provided by the ca.jo function and the ...
Daniel Xavier's user avatar
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0 answers
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Aggregate Demand and Aggregate Supply

Suppose the economy is at full employment and aggregate demand falls. Show the effects on output and prices in the short-run. Also, show how the Keynesian aggregate supply adjusts over time to bring ...
Ecoooo's user avatar
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9 votes
1 answer
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Challenging question on mathematical economics

I'm going through the paper of Acemoglu and Autor (2011, Handbook of Labor Economics) Consider the following system of two equations: \begin{equation} \frac{A_M \alpha_M (I_H) M}{I_H - I_L} = \frac{...
Maximilian's user avatar
1 vote
4 answers
73 views

Net effect of govt spending and tax cuts

Let's say a government comes out with a new budget. This budget decreases income taxes in a more or less neutral way (neither progressive or regressive). However they also decrease government spending ...
DarcyThomas's user avatar
2 votes
1 answer
68 views

Properties of Multivariate Frechet Distributions

I was reading an answer from another Economics Stack Exchange post and I had further questions. The highest up-voted answer here utilized two properties of multivariate Frechet distributions, but the ...
nate's user avatar
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1 vote
1 answer
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Derivation of the Ideal Price Index

I'm studying Chapter 15 of Acemoglu's growth book, which is about skill-biased technological change. The unique final good is produced in perfect competition by combining the output of the two ...
Maximilian's user avatar
1 vote
1 answer
60 views

Can global real GDP be calculated using nominal GDP and inflation rate? If so what is the error?

I am attempting to calculate (in R) the global real GDP using what I assume is the nominal GDP from the World Bank and what I can only identify as the inflation rate, also from the World bank. ...
At_my_wits_end_99's user avatar
2 votes
1 answer
53 views

A question about Lagrangian, KKT theorem, consumer's problem

Suppose we want to maximise a expected utility function: $$E_1(u(C_1,C_2,C_3)) $$ subject to following constraints. There are two possible situations each with probability $\frac{1}{2}$. $$C_1 + S_1 = ...
Nonenicht's user avatar
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1 vote
0 answers
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Flow budget constraint in a paper by Garleanu and Panageas

I am reading this paper and got confused by Equation (6) in said paper. Suppose there is an investor that can trade in riskless bonds that pay interest rate $r_t$, and holds a market portfolio with ...
Wittgenstein's Poker's user avatar
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0 answers
23 views

True Market Capitalization

Market capitalization just extrapolates a price from the current share price and number of outstanding shares. While this reflects a theoretical value for the companies/stock market in question, it ...
Lawnmower Man's user avatar
0 votes
1 answer
234 views

Why can't Russian CB influence on dollar?

I read in Russian article that Russian CB can't influence on dollar. CB can't depreciate dollar. CB can influence on rate of RUB only. But if there is demand on USD or RUB then why can't CB influence ...
Mike_bb's user avatar
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What is liquidity of dollars?

I read Russian article about exported inflation and it was written there about liquidity of dollars: In order to reduce national debt of the USA and to stimulate economic growth government of USA ...
Mike_bb's user avatar
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0 answers
28 views

Derivation of Euler Equation in presence of the Dixit-Stiglitz Aggregator

I reading the working paper of Sebastian Banz (2012). I have an issue with the derivation of the Euler equation. The author models the demand side of the economy as follows The representative consumer ...
Maximilian's user avatar
1 vote
1 answer
48 views

Shouldn't the answers c & d be correct? [closed]

Credit used for investment purposes can lead to an increase in total spending and an increase in total output, with the possibility of the total output increasing either more or less than the total ...
youssef ashraf's user avatar
1 vote
0 answers
53 views

Background courses for MSc in Finance

I'm a Mathematics bachelor student and next year I am going to pursue a 2-year MSc in Finance. In this question, as a total beginner in Finance and more generally in Economics, I'd like to get ...
Amanda Wealth's user avatar
2 votes
1 answer
41 views

Understanding balance of payments

Suppose US records exports (increase) in the current account. What would the corresponding decrease in the capital/financial account have to be? Why does there have to be a corresponding decrease in ...
Ac711's user avatar
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1 vote
0 answers
38 views

About part of Romer's model. Is my math process correct?

$$\mathcal{L}=\int_{i=0}^Ap(i)L(i)di-\lambda([\int_{i=0}^AL(i)^\phi di]^{\frac{1}{\phi}}-1)\\ s.t.\int_{i=0}^{A}L(i)^{\phi}di=1 $$ $$ \begin{aligned} \frac{d\mathcal{L}}{dL}&=\int_{i=0}^{A}p(i)di-\...
Barry Alen's user avatar
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0 answers
13 views

Model specification - time series. Estimation of the effect of human capital on growth

Thank you for your help in advance ! I'm working on a research project at undergraduate level on the effect of human capital on growth in Nigeria from 1980 to 2018. My current model specification is : ...
Econometricsproject's user avatar
4 votes
1 answer
362 views

Social Planner vs Representative Household

Is there any difference between solving the social planner's problem or the representative household's in the Ramsey-Cass-Koopmans model? The social planner chooses a plan $\left\{c_t, l_t, k_{t+1}\...
bruno's user avatar
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1 vote
1 answer
76 views

Proof of Blanchar Kahn conditions questions about jump variables

I am trying to understand BK model stability conditions (1980). Want to remind setup for these conditions. We have linear model with vector of predetermined ($X_t$) and jump variables ($P_t$). Main ...
Maksim Tarasenko's user avatar
1 vote
1 answer
124 views

Proof of Blanchard Kahn conditions

I am trying to understand proof of BK conditions given in the appendix to their paper. In their paper authors have original model: There $X_{t + 1} \in \mathbb{R}^{n}, P_{t + 1} \in \mathbb{R}^{m}$ ...
Maksim Tarasenko's user avatar
1 vote
2 answers
50 views

Question about passage from Sanjay Rode's "Advanced Macroeconomics"

I'm looking to brush up on my formal knowledge of economic theory and in reading Sanjay Rode's "Advanced Macroeconomics" (ISBN 978-87-403-0156-4) I've come across the following passage (pp ...
bishop-fish's user avatar
0 votes
1 answer
37 views

balanced growth path clarification and why wage rate and consumption on BGP have same growth rate

We say the economy converges to a balanced growth path if all variables are growing at a constant rate. But what does it mean? For example in Solow model with production function $F(K_t,A_tL_t)$ where ...
Nonenicht's user avatar
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0 answers
26 views

For a diff and diff should I use stationary series or non stationary?

I am trying to do a diff and diff analysis on the impact of QE for US (treatment) and Canada (control). What kind of series should I use and what dummys should I include?
user47940's user avatar
2 votes
0 answers
46 views

Labour market rigidity

I really doubt my understanding of the wage rigidity in the labour market(with the standard upward sloping $L^s$ curve and Downward sloping $L^d$ curve). So In this scenario, we have that the labour ...
SGP's user avatar
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2 votes
0 answers
52 views

Irrelevance of Heterogeneous Agent Modelling

This is a question from a previous year PhD entrance exam. I have outlined how I have tried to tackle the problem as well: N.B. 1 This exam is of 100 points and this particular problem is of 25 points....
Kanooz's user avatar
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4 votes
2 answers
127 views

Intuition of sign used for Lagrange multiplier and corresponding constraint function in constrained optimization

It seems that in many applications there may be some economic interpretation for the Lagrange multiplier and thus it might be beneficial to ensure it's value takes on a specific sign. If the above is ...
hillard28's user avatar
0 votes
0 answers
16 views

Does billionaires take loan secured by stocks to reinvest in their company?

Can billionaire use his company stocks to get loan, then invest it in his company, and get even bigger loan secured by stocks? And repeat this forever. I guess this wouldn't work, but why?
Den4ik's user avatar
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-1 votes
1 answer
359 views

Why must goods in the country will be purchased with the entire money supply in the country?

In russian books it's written that there is balance between commodities and money. And this balance guarantees that all goods in the country will be purchased with the entire money supply in the ...
Mike_bb's user avatar
  • 141
5 votes
3 answers
2k views

Economists Working At the Intersection of Pure Math and Economics

As a math student interested in economics I was recently reading some of the papers by Graciela Chichilnisky on social choice theory and some of her papers applying topology to other areas of ...
throwawayaccount's user avatar
0 votes
1 answer
61 views

What would happen if we had decreasing returns to scale in the solow-swan growth model? Would there still be a steady state and perfect competition?

I understand with IRS we have explosive growth and a single firm would eventually dominate the market since MC < AC, and hence P < AC, so firms would leave the market. I am struggling to find ...
georgetbarber's user avatar

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