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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Brand Proliferation with Knowledge spillovers

I'm studying from the Gene Grossman and Helpman textbook (1993), the brand proliferation model with knowledge spillovers (Ch.3) I'm trying to understand the equilibrium dynamics of the model. In this ...
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equilibrium level of income

It's actually seems really simple question but the problem is I find i=2.9 but that makes Y negative? Could it be possible?
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How to detect verion of HS 6 digits code?

I have trade data with HS 6 digits codes. However, I don't know which version of HS is used. I wonder if there is any practice in statistics to detect which version (HS1, HS2...HS5) is used?
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Why are U.S. treasury yields currently rising when the U.S. economy has likely entered a recession?

I understand that when investors’ confidence level is low, the demand for Treasuries will increase, hiking up Treasuries’ prices and lowering their yields. As a result, declining Treasury yields are ...
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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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Is the economic output of the British crown dependencies included in Britain's national income?

Is the economic output of the British crown dependencies included in Britain's Domestic Income ? I know from this Wikipedia article https://en.wikipedia.org/wiki/Crown_Dependencies ,That crown ...
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How can the exchange rate be virtually constant with major inflation rate difference and a widening trade deficit?

I have recently had a discussion with a colleague about what seems to be a rather strange macroeconomic aspect in Romania (which has RON currency): EUR-RON exchange rate has been virtually a flat ...
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I am a amazon seller and if i bring of a non branded product, if i seller higher quality product then price increases and i don't get customer [closed]

I don't know if its the right platform assumption: the products are non-branded, the product will be different for every seller but the category will be the same eg. Jewellery. I am an amazon seller ...
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Significance of yield spreads in highly liquid environment?

I've come across this chart from a few months ago and am unable to trace down its origins. But I would like to think I should be able to decipher it even without the authors whispering in my ear. So ...
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1 answer
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Hamilton-Jacobi-Bellman equation

Let us consider the lab-equipment model developed by Romer with input varieties. The value of owning the blueprint of a machine of a variety $\nu$ is given by: And: denotes the profits of the ...
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Writing down Bellman equation

Assume an infinite horizon representative agent economy with the following consumer preferences $u(c_t)$ The production technology of this economy uses capital and land, which is fixed amount in ...
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catching up with Johnes utility in the recursive equilibrium model

Consider an infinite horizon representative agent economy in which the agents enjoy consumption as usual but also cares about its relative level of consumption compared to last period’s average level ...
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Is high inflation an indication of a recession, either now or in the near future?

I have been wondering about this. Perhaps one example of a recession without inflation would settle this quicky?
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gov bond vs t bills

I've come across a question while I was studying for an exam and wanted to ask what's your take on it guys. While treasury bills are more interest rate sensitive than government bonds, government ...
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Is it correct to distinguish between "monetary" and "price" inflation?

As the questions says. Should we distinguish between both. Or are they the same thing?
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Doubt about basic concept [closed]

What would happen if we introduce MRP (minimum retail price) instead of MRP (maximum retail price)?
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Representing insolvency on a T-account

Example balance sheet Section 16-3d of Mankiw's Principles of Macroeconomics textbook shows the following balance sheet: Simulator I have a simple C# program that models this sort of example. So if I ...
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How to convert national poverty into an international comparable measure?

I want to compare the poverty of a subpopulation of my country (indigenous people) to other countries' poverty. To do that, I have the per capita income of each individual of my dataset expressed in ...
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5 votes
3 answers
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In US, was there an instance in the history when two consecutive quarters of GDP decline wasn't classified as recession?

This topic has been a bit politicized. The common perception that two consecutive quarters of negative GDP growth counts as a recession is a myth. There is actually a committee that determines whether ...
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dynamic macroeconomics: Does the system "state" affect the dynamic optimization problem?

I am new to economics, but come from a statistics and math background, so the control theory and dynamic optimization ideas are familiar to me. What is a little confusing is that in most control ...
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Why Increase in Money Supply Reduces Interest Rate in Money Market?

I understand the fact the Increase in Money Supply reduces the interest rate in Money Market. But these two explanations are confusing me a lot. I'm not able to understand which is correct. Reason 1 ...
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Real or monetary values? In the context of Classic model

I am studying the classing model. And I have a basic question what are the units of the following variables( monetary or real?) Inflation rate ($\pi$), wage (w), Labor supply N, consumption C, ...
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1 answer
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How to measure supply constraints/bottlenecks

A common explanation for the recent global surge in inflation points to supply constraints and bottlenecks in delivery chains. While I find the argument appealing, I have seen little quantitative ...
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Deriving Vertical LM Curve from Money Demand Curve

The statement "If money demand does not depend on the interest rate, the LM curve is vertical" is correct. Now, If money demand does not depend on the interest rate , then it means, ...
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Question on Keynesian Economics from Sargent’s book

While I am reading the Sargent’s book (Macroeconoic Theory, 1979) Sargent Book, I saw the following question. But I cannot find an answer for this(Question 7 in the book, page 73) Assume an economy ...
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Who benefits/is worse off from "death of forward guidance"?

A few months prior, I asked: What is the worst potential outcome if the Fed "loses credibility?" where a great answer pointed out that forward guidance allows a central bank to achieve ...
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1 answer
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Endogenous growth model with externalities

I have a following model of endogenous growth where each firm has the following technology; $$y_t=AK_t^{1-\alpha} k_t^{\alpha} n_t^{1-\alpha}$$ The production function above defines an externality. I ...
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What does the freelance/independent contractor vs. employee salary difference look like for different countries?

Is there any data someone could point me to that would help answer this question? Individual data points would also be helpful, e.g. on the ratio of wage to freelance hourly pay for software engineers ...
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5 votes
1 answer
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What are the assumptions made about fixed points in the dynamics equations of Recursive macroeconomics?

I am new to Macroeconomics, but I understand the basics of Recursive Macroeconomic models--following the Ljungqvist and Sargent book. So I get the basic recursive problem to find a vector of ...
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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 would happen if someone suddenly gained 1 Trillion $?

I was wondering, if I was suddenly worth 1 Trillion $, say a sudden bank glitch gave me the money, and nobody noticed, what would happen I suppose massive inflation would make the dollar worthless, ...
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how does relationship between expected inflation and targeted inflation affect IS curve

Suppose we start in a situation where expected and actual inflation are equal to the targeted inflation of the central bank and production is on the natural level. Suppose that, as a result of the ...
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Question on the Uzawa-Lucas model

I am studying Solow growth model, I saw such a question. “ In the Uzawa-Lucas model set-up, how the growth rate of consumption changes following a natural disaster, which only destroys physical ...
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Post WWI - Peace Conference flow of capital

I'm researching a bit into how countries went about servicing their debt obligations, which were quite high after the major spending during wartime. Liaquat Ahamed notes: As the Peace Conference was ...
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3 votes
1 answer
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How to pass long lag of unobserved into Kalman filter

I am trying to replicate multivariate filter for potential output from paper. I have already understood which variables in the model are observed and which are unobserved. This model should be ...
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1 answer
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Why is a contractor's profit considered a producer surplus instead of being complementary with marginal utility? [closed]

Do economists currently not view contractors as labor? I suggest producer surplus be exclusively exclusive material (for otherwise even mining and logging would not need withstand fixed-startup costs ...
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4 votes
1 answer
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Do individuals saving adversely affect the economy?

Does decision of Individuals to save money affect the economy of a country negatively? I think so yes, because if a high earning individual refuses to spend money then it stop the 'gears' of the ...
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1 vote
1 answer
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When can we say X and Y have an association?

I was reading the first chapter of Handbook for macroeconomics. The authors show a table of capital-output ratios ($\frac{K_{2011}}{Y_{2011}}$) (in 2011) for selected countries. Because Malawi and ...
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Weather forecasting vs. macroeconomic forecasting

It is common to say that the behavior of a national economy is complicated because it involves millions of individuals ($10^8$) each of whom makes thousands of relevant economic decisions a year ($10^...
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Question on tax rate

I want to include the tax rate in a country in my study. I use the tax rate because the higher the tax rate the larger is the welfare state, which is expected to decrease income inequality. But I don'...
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Is it reasonable to run particle colliders from economic perspective?

Every major economy runs particle colliders, which consume huge amount of resources, billions € (not including the cost of education and time of highly qualified personell). There are many articles ...
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the future effects of Covid 19 pandemics on GINI (income inequality)

I would like to analyze the future effect of Covid 19 pandemics on the Gini index (income inequality). Which dependent variables should I use in order to see the effect of the pandemics? For example, ...
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Value added at current price and deflation

I am currently working with Value Added at current price per industry per country per year (VALU variable available on OECD stats) and I'm trying to use the Value Added for all the European Countries (...
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How does output level of food grains and industrial goods go together? My textbook doesn't give many details but I'm curious to know

If we observe the economy of a country as a whole it will appear that the output levels of all the goods and services in the economy have a tendency to move together. For example, if output of food ...
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How will more stimulus checks in California affect inflation?

So we're getting more money here in California. I thought the consensus at this point was that we probably overstimulated the economy. What gives? What was the reasoning economic advisors had for ...
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1 answer
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Model for how the shifting of industries affect job creation

I am working on my Master's thesis (International Relations) and I want to argue, backed with data, that when an industry gets bigger in terms of production, efficiency, in detriment of another ...
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1 vote
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Is it accurate to say reverse repo is 'conflicting' with monetary policy?

As seen in the chart, historically, reverse repo levels have been fairly small or at most, a few hundred billion dollars: Now into the USD trillion handle, it's a more prominent fixture of the money ...
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1 vote
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Money-market model: Income rises, bond prices fall. But if income rises, saving increases — in bonds. So why does rising income lower bond prices?

According to the money market model that determines the equilibrium interest rate at which the demand for money in the economy equals the supply of money: when the money demand curve shifts right for ...
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In the Ramsey-Cass-Koopmans model what is the equation for the stable arm?

I’m wondering what is the equation of consumption per effective labour that depends on capital per effective labor, which describes the stable arm of the graph in the Ramsey-Cass-Koopmans model.
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Why should time-subscript notation be avoided in Bellman equations?

when I learned Bellman equations for macro, my lecturers were pretty loose about notation and switched between recursive and time-series notation. However, Prof Ben Moll says in his slides on Slide 15 ...
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