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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questions
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Can't we measure the growth in the income levels of poor?
Inflation has been a challenging aspect
of policymaking. In such situations growth in
the income levels of the population living below
the poverty level can never be measured
accurately (due to ...
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0answers
10 views
What would happen if fractional banking was phased out?
There are negative interest rates now and into the foreseeable future. This must mean there is too much money being offered compared to the demand for loans. Fractional banking acts as a multiplier on ...
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0answers
6 views
Effect of a drop in interest rates in Indonesia on the US-China trade war
I was wondering if the drop in Interest Rates will impact the war in any way. Need this for an assessment. Any help would be appreciated.
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1answer
17 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 ...
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1answer
21 views
Hep with total differentiation of an AD function
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 ...
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0answers
16 views
Why is price dispersion from Inflation called relative price “distortion”?
I know what relative price is and that it fluctuates more frequently in times of Inflation. But what I don’t understand is why it is called “distortion” when relative price dispersion is caused by ...
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1answer
15 views
How does interest rate impact exchange rate?
When I’m using the forward exchange rate formula based on non-arbitrage theory, it tells me that a positive interest rate spread (i_domestic > i_foreign)would cause the forward exchange rate(units of ...
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0answers
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The range of inflation dwindles means?
Basically, inflation has been a challenging aspect
of policymaking in India because of its level (i.e.,
range in which it dwindles) and stability (how
stable it has been). Here dwindles means what?
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0answers
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What are the factors on which value of all resources ( good, silver, cash land etc. ) found in world changes over time?
And followed by, Does it right to say that, if any country become rich then other must become poor and vice-versa. If no, then Is it possible that, in certain conditions, all Nation in the world can ...
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0answers
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Regarding Macroeconomic Models
I've recently started my PhD and upon looking at my textbook (the sargent one) I found that it differed greatly from my Masters textbook (Romer) and in turn my undergraduate macro text (williamson).
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Causes of trade deficit: Multiple views
I am trying to understand the causes and macroeconomic implications of running a trade deficit in the United States, and I came across a few different views on this topic. I'd like to know if there ...
1
vote
1answer
41 views
Is it bad for the economy of a country if forreign firms buy companies?
If a forreign firm buys a company. For example a Russian firm buys a British company. Is this good or bad or neutral for the British economy?
As I see it, the profits of the company will be going ...
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0answers
13 views
Differences between GVA and NVA?
I have studied these 1) Gross value added= value of output- intermediate consumption.
2) Net value added= gross value added- depreciation. But how could we say "Net value added = Gross value of output ...
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vote
0answers
24 views
Why a Current Account deficit implies a Financial Account surplus
Every macro textbook out there states that if a country has a Current Account deficit, it must have a surplus in the Financial account, but I have not heard a convincing explanation.
Imagine a ...
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0answers
25 views
Which assets beat the injection of money and why?
Suppose a world in which every year $1.03 ^ Y$ liquidity is injected.
Which assets could perform better than 3% per year?
Growth forecasts for these?
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0answers
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If China stopped exporting in USD, what would happen to the economy? [on hold]
If China stopped exporting in USD, what would happen to the economy?
What would be the effects in US economy, China economy and Latin America economy?
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0answers
3 views
what are the advantages of using Canonical Cointegrating regressions?
What are the advantages of using Canonical Cointegrating Regressions in comparison with OLS regressions?
Thanks.
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2answers
33 views
Consumer's side and producer's side
GDP gives the picture from the consumers’ side, while GVA gives the picture from the producers’ side. By definitions of both GDP and GVA "the amount of goods and services PRODUCED in an economy in a ...
1
vote
1answer
27 views
About gross domestic product at factor cost
GDP at factor cost= Net value added + Depreciation. Here my question is why depreciation added to Net value added? I am confused here: Net value added = Gross value added - depreciation; so the above ...
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0answers
15 views
what is the difference between normal OLS simple linear regression and Canonical cointegrating regression?
what is the main difference between simple linear regression and Canonical cointegrating regression. Why we should use Canonical cointegrating regression instead of OLS?
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0answers
33 views
Why is the cash in circulation on the rise in rich countries?
The amount of cash in circulation is on the rise in rich countries (US, EU, etc; except the cashless economy, Sweden). In the digital era, isn't this phenomenon contradictional?
For example, here's ...
1
vote
0answers
18 views
Is a high borrowing rate bad?
I'm not an economist, so this may be a stupid question, but why are high borrowing rates among individuals and corporations bad? Like, I've heard high student and credit card debt mentioned as reasons ...
1
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0answers
16 views
What is the difference between conditional and unconditional risk premia?
This is an asset pricing question. What is the difference between conditional and unconditional risk premia? Here's the context:
The fact that carry trade strategies typically earn positive average ...
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0answers
16 views
can we compare data of only specific years in economics?
Can we compare inflation rate of only 2018, 2013 and 2008? will it be justified because it is only focusing on specific years not overall trend
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0answers
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Difference in import
I have a budget of 600\$ to buy a new phone, local shops have the same phone I want for for 600\$, but I found the exact same phone for 500\$ in China.
So I bought phone from China and made the ...
2
votes
1answer
43 views
Solow Model with a Capital Stock Externality
Suppose we have the following form of the Solow Model: $$ Y_t=K_t^{a+b} L_t^{1-a} $$ where a,b >0, and a+b<1.
Is it possible to determine the steady state growth rate of k (k=K/L), and the steady ...
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vote
0answers
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Useful models/theory private debt and borrowed constrained households
In macro oriented research papers the role of private debt is discussed and that apparently when there is a lot of private debt in the economy, households tend to be borrowed constrained..
Could ...
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0answers
13 views
CPI and real quantities
How is it real wages = old wages * new cpi / old cpi? It seems this discounts back to the reference period and then multiplies out to current day. This would give us new (nominal) wages?
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vote
1answer
26 views
Why does equity have historically poor performance after rate cuts?
I am struggling to understand why equity markets seem to suffer shortly after fed rate cuts. Here is a rather telling chart:
Question
Assuming not some kind of spurious relationship, what's the ...
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0answers
17 views
List of countries moved to developed economies in the last 50 years
I read in Bloomberg that five countries moved to advanced economies in the last 50 years from developing economies and one of them was Singapore. Wondering what are the other four countries?
The ...
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votes
1answer
30 views
Equilibrium level of national income calculation
I am trying to calculate the Y,if the following info is given:
Autonomous consumption=200
MPC=0.8
Tac rate=0.1
G=100
I=200
Exports=250
imports=150
What is my equlibruim level of national income(Y).
3
votes
0answers
48 views
Log-linearizing a non-separable utility function around the steady state
I've started reading Jordi Galí's Monetary Policy, Inflation and the Business Cycle (2nd ed., 2015). In section 2.5.2, Galí considers an example with the following non-separable period utility ...
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9 views
why data for PPP conversion rates are given annually?
i try to find quarterly ppp rates for currencies to compare actual exchange rates from PPP levels, but all of data is annual? why?
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0answers
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Finding optimal lot size
I have small problem in calculating the optimal lot size.
Suppose i have fixed price of $250,000$ for my warehouse. The price of each product is $5,00$ dollars and order costs are $500$ dollars but ...
0
votes
2answers
73 views
Log linearising (Gali textbook)
In Gali (2015)'s textbook Monetary Policy, Inflation, and the Business Cycle, variables in levels are denoted with capital letters, logged variables with lowercase letters.
However, when a log-...
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0answers
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What are some similarities and differences between the 2001 recession and the 2007 recession in terms of causes and the effects on the economy?
I know the two were caused by the burst bubbles and worsened by rising interest rates. I also know that the the 2001 recession had a long jobless recovery but did not experience as many bank failures ...
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0answers
41 views
Economic course shedule [on hold]
I want ask about courses in economics. Should I take a Money and Banking course before taking Macroeconomic Theory or is it better in the opposite order? And what about Industrial Economics and ...
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0answers
13 views
How does investment lead to generation of jobs?
I quote from India's Economic Survey 2019 (an official document) -
While the claim is often made that investment displaces jobs,
this remains true only when viewed within the silo of a specific ...
1
vote
1answer
33 views
Does investment directly influence demand?
I quote from the first page of India's Economic Survey 2019 (an official document) -
Investment, especially private investment, is the “key driver” that
drives demand, creates capacity, ...
6
votes
1answer
80 views
Why is macroeconomics studied through “Shocks”?
"Why is modern macroeconomics all about identifying this shock and that shock?"
Coming from a theoretical econometrics background, I have recently delved into empirical macro literature. I am a bit ...
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0answers
19 views
How the Balassa-Samuelson affect real exchange rate?
According to standard Balassa-Samuelson effect, when the productivity increases in the tradable sector (GDP), price increase can be observed in non-tradable sector and this can lead to appreciation of ...
2
votes
1answer
24 views
CES v. Leontief Aggregator in Production
Consider a production process with two distinct capital types such that there is a capital aggregator. You could view $k_v$ as a more versatile capital (e.g. can be converted into many different ...
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0answers
22 views
When Balassa-Samuelson effect increases, real exchange rate depreciate?
I researched several literatures related with Balassa-Samuelson effect and according to literatures, as Balassa samuelson effect increases, real exchange rate appreciates. However according to the ...
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0answers
10 views
If PPP Exchange rate is 0.291, what does that mean?
I've normalised deflators for countries A and B. If the Price level of Country A/ Price level of country B = .291, does that mean that on average for every dollar a person in Country B spends, for the ...
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0answers
12 views
How to calculate PPP Exchange Rate using GDP deflator?
I'm doing a project and I'm asked to find Purchasing Power Parity exchange rate. The way the teacher says to do it is to divide my countries GDP deflator by the US GDP deflator over a time series. Is ...
0
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1answer
37 views
Having a lower inflation rate is not the same as having lower overall prices?
Having a lower inflation rate is not the same as having lower overall prices.Why?
lower CPI(inflation) means price levels in country decreases?
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Does High rReal GDP per capita lead to overall high prices
Switzerland has higher Real GDP per capita level than USA an Britain but when I looked at data, Switzerland inflation rate is lower than those countries. Why?
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1answer
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If I find the GDP deflator (i.e., price level) for a given time series, can I then find real consumption given nominal consumption?
I've found the gdp deflator for a country over a 25 year span. If I have nominal consumption for the same time series, then I just have to divide nominal consumption by the p-level I found with the ...
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50 views
Does High GDP per capita lead to overall high prices
Switzerland has higher GDP per capita level than USA an Britain but when I looked at data, Switzerland inflation rate is lower than those countries. Why?
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0answers
17 views
Does anyone know how to find disposable income data? [duplicate]
I'm doing a macro project and I need to find disposable income data over a 25 year period. My professor said that this metric data is available directly on the World Bank website. I've searched ...
