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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Macro Economy-Transaction [closed]

For each of the following transactions, show the immediate effects on the balance sheets of (i) the central bank and (ii) the commercial bank that is directly involved in the transaction. In each case ...
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Show that if there exists an unemployment equilibrium, then money wage rigidity must exist in the complete Keynesian model [closed]

Show that if there exists an unemployment equilibrium, then money wage rigidity must exist in the complete Keynesian model. The following data is given for an economy- Y = 250 – 250r (IS curve) M0/P = ...
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Calculate Average Annual Real Interest Rate Given Average Annual Inflation

Given that the average annual inflation between the years 1993 and 2012 is 5.6%, what is the average annual real interest rate between 1993 and 2012? I know the formula growth = $(\frac{X_{t+p}}{X_t})^...
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Calclulate average annual inflation

The price index in the year 1993 (the base is 2012) is 60. The annual nominal interest rate between 1993 and 2012 is 66% on average. What is the average annual inflation between 1993 and 2012? I know ...
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Calculate GDP Deflator

If the nominal GDP of an economy in quarter 2 in 1983 was 400 units, and the real GDP of the same economy in 2012 is 700 units, what is the GDP deflator (base is 2012) for this quarter? I know that ...
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How can the Fed enforce exit criteria if they begin yield curve control?

Over the past year, the notion yield curve control has resurfaced and appeared on FOMC minutes, decades after its last implementation. According to the Fed's introduction page: As the U.S. continued ...
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Solow Growth Model and Steady States

$Y^A_t = AK^\alpha_t L_t^{1-\alpha}$ $Y^B_t = BK^\alpha_t L_t^{1-\alpha}-bL_t$ where B > A and b is a fixed cost (per unit of labor used). I found the steady state of $Y^A_t$, but I couldn't find ...
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Seemingly contradictory relationship between bond yields and economic growth?

I have a few seemingly contradictory ways of viewing the relationship between economic growth and bond yields: Reductions in FFR are largely induced by IOER. Since IOER and bonds are competing ...
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What are some examples of Market Failure and Government Intervention in Italy? [closed]

I'm currently writing and essay about the Economics of Italy, I have been searching the internet for Market Failure examples in Italy but I can't find anything. I gotta admit I'm not very good at ...
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what is a bond yield and how did it recently affect the stock market [closed]

can you explain to me how did the recently drop in nasdaq index is related to the rising bond yield in an understandable way im in the process of basically interpreting this article https://www.cnbc....
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Is it feasible for another country to attack the US dollar via counterfeiting? [duplicate]

Assuming, for the sake of the question, that a well-resourced adversary (another country, most likely) had the means and motive to conduct economic warfare against the United States through large-...
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Remove seasonality in R

I have data of total exports of fish from my country in the time period 2010-2020. Since our currency (NOK) has gotten weaker to the currencies we are trading with, we have gotten a lot more value ...
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1answer
29 views

Risks asscoiated short term stimulus as interest rates approach zero

TL;DR Government interest rates are approaching zero. What are the risks to borrowing large sums in the current enviroment? Would inflation occur? Full Story I was recently reading an article about ...
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Simple worked-out example of computing future cashflows of other countries' assets?

I read through a research note from Bridgewater and a lot of the discussion centered on finding attractive cashflows of global stocks in USD terms. Here is a line for ease of reference: Across a ...
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1answer
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What is business cycle frequency?

I am reading a paper by Michal Andrle, Jan Brůha, Serhat Solmaz (On the sources of business cycles: implications for DSGE models). The authors use data at a quarterly frequency for their empirical ...
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Does net exports has to do with borrowing and lending?

In my course notes, it says that "when net exports is negative it means that the country is borrowing from other countries" but I do not get it if net exports is negative that only means ...
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Social Planner problem: two period

The production function is $F(K_t,N_t)=AK_t^\alpha N_t^{1-\alpha}$ and depreciation $(\delta)$ is equal to 1. The given preferences are as follows: $$U(c_1,l_1,c_2,l_2)=\gamma log(c_1)+(1-\gamma)log(...
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Bellman Equation with Two Discount Factors

For the following social planner's problem $$ \max \mathbb{E_{0}}\sum_{s=0}^{\infty}\beta_{1}^{s}(\alpha U(C_{s}^{1}))+\beta_{2}^{s}((1-\alpha)U(C_{s}^{2})) $$ $$ s.t.\ \text{some constraints ...
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Mathematical question in macroeconomic task

I am currently working on a project where I want to explore how changes in a couple of currencies affects the income for my countrys exported fish. My country (Norway) sells it fish in 4 different ...
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1answer
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Did the Bank Of England say QE doesn't work?

https://www.bankofengland.co.uk/working-paper/2020/does-quantitative-easing-boost-bank-lending-to-the-real-economy Staff Working Paper No. 883 Published on 14 August 2020 From the conclusion: If the ...
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Help to find China Data

do you know where can I find data about the R&D expenditure of china from 1976 until 2020?
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1answer
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Why does US equities valuation have the downward pressure on USD?

While making readings on economics I came across a sentence: ..large valuation gap that has opened up between US equities and the rest of the world. This could help bid up non-US equity valuations and ...
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1answer
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What is the resolution down to which the annual inflation value can be controlled?

Judging by previous posts in the site, the inflation target is set annually to 2% by the Federal Reserve. Regardless of the reasons behind this choice, I am curious to understand how precisely can the ...
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Does Modern Monetary Theory (MMT) provide a useful insight into how to manage the economy?

According to advocates of MMT, the primary risk once the economy reaches full employment is inflation, which can be addressed by gathering taxes to reduce the spending capacity of the private sector. ...
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The economic function of inflation [closed]

I often see people who ask how much inflation is a good amount of inflation, or why deflation is bad. My understanding of the systemic role of inflation (and please correct me...), is to neutralise ...
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Is GDP the market value of goods consumed or goods produced in a time period?

Definitions across various resources state that GDP is the market vaue of all goods 'produced' in a certain time period. But while calculating GDP by expenditure method, consumers' spending is one of ...
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Why is deflation bad for economy?

As now many people are talking about the inflation of US dollar on the account of the COVID-19 pandemic and the printing of trillions of US dollar bills, the price of decentralized cryptocurrencies ...
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It is argued that in optimization the first part of the second-order condition appears opposite to their interpretation? [closed]

It is argued that in optimization the first part of the second-order condition appears opposite to their interpretation
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1answer
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Constant to the power of t in steady state

I am wondering how to get the steady-state for the following Euler equation. I know that we can get rid of time in subscripts. However, here I have a constant (a) to the power of $t$. Does anyone know ...
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Increase in money supply when price are flexible in the basic new keynesian model

I would like to know what would be the effect on price and quantities of an increase in money supply in the basic new keyensian model. What happen if price are fully flexible ? What if prices are ...
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1answer
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inflation with the seignorage revenue [closed]

In the short run it may be unchanged, but if people expect higher inflation, the nominal interest rate will increase and velocity will also increase, reducing the seignorage in case Hi, I am nit ...
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1answer
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How to define the natural rate output

I'm following Woodford's Interest & Prices to derive the microfundations for a New Keynesian model with staggereed prices. I defined the utility function and disutility function (1.1 at page 144) ...
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1answer
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Help with AP Macroeconomics FRQ [closed]

I am a senior in High school and am taking an AP Macroeconomics course. I just took an FRQ and received an F on it. I asked my teacher multiple times to explain why my answers were wrong, but to no ...
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37 views

Basic New Keynesian model with flexible price

I would like to know what would be the response of variables in the Basic New Keynesian model but with flexible prices (ie not with Calvo pricing). For example I have troubles to see how having ...
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1answer
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Macroeconomic model or knowledge base representing connected industries in the world

I'm looking for data (model, Expert system, knowledge base) that describes how different industries and countries interact with each other. And the nature of the relationship between them. An example ...
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1answer
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What happens to an MBS if all the underlying mortgages are fully paid back by the borrowers much before the maturity date?

What would happen to an MBS (mortgage-backed security) if hypothetically speaking all the underlying mortgages were fully paid back by the mortgagees (borrowers), much before the maturity date? I ...
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1answer
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Solow model: Partial derivative of k* with respect to g

Given the solow model $sf(k)=(n+g+\delta)k$, written as $$F=sf(k^\star)-(n+g+\delta)k^\star=0$$ I am trying to find the partial derivative of k* with respect to n Here is what I've tried: I use the ...
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What is the 'gold standard methodology' in macroeconomics research?

What is the 'gold standard methodology' in applied macroeconomics research? In drug discovery research, for example, there are many methodologies, but RCTs are the gold standard, right??...like the ...
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Loosely speaking, are all modern economies 'Keynesian' in their stance on spending during downturns?

Keynesian economics is defined as: increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression. Do all modern economies adopt a Keynesian ...
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What is the no ponzi condition for this representative consumer problem? Tags: Initial condition, no-ponzi game

This question is following Farhi et.al. 2014's consumer budget constraint modified to add a government bond and removing money. A simplified version is given below which is pertinent to the question. $...
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3answers
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How can an economy pay for all the products it produces?

How can the totality of an economy pay for all the products it produces, if the initial amount of money in the system (before the profits on all of the products is realized) is less than the amount of ...
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Imports not used in the country, still counting in the GDP calculation?

When we calculating GDP we use the given formula $GDP = C + I + P + X - M$ Here $M$ means the imports. My question is: What if I am not currently using the imports. For example I might have by the ...
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What does it mean to identify structural shocks in macro models?

What does it mean to identify structural shocks in macro models? Sometimes, it seems to mean just disentangling VAR innovations into 'structural' shocks which may or may not have any economic ...
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Structural shocks in economic models are unobservable and country-specific?

Let's consider an exogenous oil price shock ($e_t$) as an example in the following equation $oil_t = \rho \; oil_{t-1} + e_t$, where $oil_t$ is one variable in a VAR system. We normally want to ...
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How did investment go from exogenous to endogenous in the IS/LM model?

Context: I am currently taking an introductory course to macroeconomics and we are on the topic of Keynesian Economic and the IS/LM model. Initially we saw that the investment (I) component of ...
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Government stimulus

Where does the money come from to pay Americans such a generous stimulus? What is the economic benefit? Is there something that is not visible to everyone else? If we give all this money to everybody ...
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Jordi Gali Book First Edition Page 47 (need help for derivation)

The below image is from P.47 of Monetary Policy, Inflation, and the Business Cycle by Jordi Gali. My question is "how can we derive the equation (15). If (15) is a correct equation, my guess is ...
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Search and Matching model with 2 agents?

I would like to know if you know any model with Search and matching framework (Mortenses-Pisarides style) with 2 types of workers (like Ricardian and rule of thumb consumers for exemple) ? I would ...
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What is the effect of currency depreciation on import prices?

In Macroeconomics: A European Perspective (3rd ed., Blanchard, Amighini and Giavazzi), when discussing the reason for differences in the GDP deflator and the HICP for the EU, it states the following ...
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What does taxes less subsidies mean?

What does 'taxes less subsidies' actually mean? It feels like it is grammatically incorrect. I have assumed it to just mean taxes minus subsidies.

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