Questions tagged [macroeconomics]
Macroeconomics is a branch of economics dealing with the aggregate economy as a whole, rather than individual markets.
1,824
questions
0
votes
0answers
8 views
When to use a lagrange multiplier?
I have a question in regards to the use of Lagrange multipliers in macro models.
I have seen that when writing a Lagrange there are two ways to write the Lagrange multiplier: 1) Indexed or 2) ...
0
votes
0answers
9 views
recreating PWT8.1
I recently tried to recreate figure 2 shown in the The Next Generation of the Penn World Table by Feenstra et al. (page 3174/ in R). Unfortunately, I really got severe problems! Maybe someone knows ...
-1
votes
0answers
3 views
Fairness of U.S. Foreign Trade with China and Japan
I I have a debate coming up this week over the question: Is the U.S. being "robbed blind" through unfair foreign trade practices by China and Japan? The stance I am assigned to is that the current ...
0
votes
1answer
5 views
How would increase labor productivity lead to improved living standards of people in an economy?
I would like to know more about the mechanisms through which higher labor productivity would translate into higher living standards for a population in a given economy.
0
votes
0answers
10 views
0
votes
1answer
29 views
Why is macroeconomics about general equilibrium?
In a fairly popular paper published a couple of years ago ("On the future of macroeconomic models"), Blanchard (2018) makes the following statement, among other "widely believed propositions":
(i) ...
0
votes
0answers
9 views
debt monetization & Fed's involvement in the Repo market; how does that affect velocity of money?
On September 4th 2019, The Fed started monetarizing debt once again and has added $385 Billion to the balance sheet as of 1/22/20.
https://fred.stlouisfed.org/series/WALCL
Around the same time in ...
-1
votes
0answers
25 views
Why actual government deficits may be a poor measure of fiscal stance? [closed]
Why actual government deficits may be a poor measure of fiscal stance? How could this problem be overcome?
0
votes
2answers
34 views
What is the difference between Q4/Q4 and Y/Y GDP growth?
Per US media, the US economy grew 3.1% in 2018 Q4/Q4 and 2.9% in 2018 Y/Y. 2.9% seems the reference number in various databases (World Bank, Reuters, Bloomberg, etc) but what exactly does Q4/Q4 mean ...
0
votes
0answers
21 views
Micro and macro readings [closed]
Can you give me good readings for micro and macro theory for undergraduates? I would like ones that would cover a lot of math.
0
votes
0answers
10 views
If a new company arrives into market with great idea and achieves sales, is it away from other companies sales?
If a company arrives into world markets (let's say world markets has total of 100M€) with a new innovation and achieves sales of 10M€, is the money achieved away from the sales of other sellers on ...
1
vote
1answer
34 views
Why did foreigners keep buying Swiss francs at -41% (not a typo) interest rate in the 1970s?
A Bloomberg (opinion) piece notes
In January 1975, the Swiss government held an emergency meeting and then took the extraordinary step of slapping a 41% annual penalty on foreign deposits. But even ...
0
votes
0answers
13 views
How would M2 and Velocity of M2 be affected if balance sheet expansion continues long-term?
Let’s assume that the Federal Reserve does NOT discontinue injecting liquidity into the Repo market but, instead, continues a long-term policy of continuous and regular liquidity injections. Let’s ...
0
votes
0answers
16 views
Are interest rates low because of low aggregate demand? If so, what are the reasons for low AD?
Interest rates seem quite low in most of the western world and it looks like the market thinks this will last for a long time.
10-year government bonds in US, Canada, Australia, France, Japan, ...
-2
votes
0answers
15 views
PPP and real exchange rate [closed]
Can someone help me with this question. It shoul be easy but i am not able to solve any of them. Thanks
0
votes
1answer
44 views
Why would overemployment mean that labor is used inefficiently?
If labor is being used efficiently, there is no excess unemployment
or over employment.
This phrase from Khan Academy struck me as quite strange. Why on Earth would over employment mean that labor ...
0
votes
0answers
12 views
Deprivation vs. Marginalization
I see many studies of poverty use 'marginalization' and 'deprivation'. What are the difference between them?
-1
votes
1answer
28 views
Economic move from agricultural to manufacture to service in ?what after service sector?
is there anything after service sector .in oecd nation most of employment in service sector.is there anything like post service world.
0
votes
2answers
46 views
Why is oil being traded in U.S. dollars?
I am trying to understand the concept of money,forex, depreciation of currency,devaluing,...(just the basic stuff). While I was reading about why oil is being traded in U.S. dollars, on the internet, ...
0
votes
0answers
25 views
Does stagflation lead to redistribution of wealth?
Suppose there is inflation in our country, but we take a short term, thus some prices are sticky and there is non-positive "growth" of the real GDP. In other words, we experience stagflation.
If I ...
0
votes
1answer
51 views
Do I understand correctly that taxation-based government expenditures allow GDP to grow?
Suppose (it's an example) GDP= $1 000 000, Marginal Propencity to Consume(MPC)=0.25, that borrowing money is an absolute taboo for our government and that said government wants to increase GDP.
What ...
1
vote
0answers
17 views
Why should government bonds have been a part of FSB rules on repo markets?
Since the financial crash, reforms have been made by the FSB, I would like to know why there is the opinion that government bonds should have been part of FSB rules on repo markets
0
votes
1answer
26 views
What will be the additional investment?
I recently encountered upon this question:
Suppose, in an economy,autonomous consumption is Rs 100 crore and autonomous investment is Rs 60 crore. Imagine that in this economy,with every increase in ...
0
votes
0answers
21 views
Cost of living index
Say you have a cost of living index based on the dollar for each state.
Such as this one:
https://www.forbes.com/sites/chuckdevore/2019/08/06/when-is-a-dollar-not-a-dollar-states-and-the-cost-of-...
2
votes
0answers
7 views
When does the interest rate parity curve shift?
Given the IS LM IRP model,
can somebody tell me the difference for when there is a movement along the IRP curve and when there is an actual shift in the IRP curve?
0
votes
0answers
16 views
How to calculate the multiplier in an open economy?
So suppose there is an open economy were only the goods market exists:
C=0.6(Y-T)
T=0.25Y
Imports=0.2Y
exchange rate=1
exports=0
Investment and government spending added up together=6.
How to you ...
0
votes
1answer
28 views
In a production function, the technology can vary across the firms and times. But the “power” must be same for the same industry?
Let $F_t=A_tK_t^\alpha L_t^{1-\alpha}$ be the production function with two parameters.
In regression, we know the firm level $F_t$, $K_t$, and $L_t$. We want to estimate $A_t$ and $\alpha$.
I've ...
0
votes
2answers
30 views
Why does an increase in GDP lead to an increase average incomes?
I am a high-school student...sorry if this is a very simple question.
Is it due to the fact that, as there is more money in the economy, firms can afford to pay higher wages/employ more people? But ...
2
votes
0answers
64 views
Linearization of the dynamic system (I did it, but I have a mistake that I cannot catch. Help me please)
I have the following dynamic system in discrete time
For p is price, d is demand and s is supply.
$$p_{t+1}-p_t= a(d_t-s_t)$$
$$s_{t+1}-s_t=bp_ts_t-ws_t$$
$$d_t= k-gp_t$$
I have to linearize this ...
0
votes
0answers
33 views
Economic interpretation of the given dynamic equations
How do you interpret these equations
$$c_{t+1}/c_t=1-\beta [(c_t/w_t)-a]$$
$$w_{t+1}+c_t =kw_t+q$$
where $\beta$ a, k, q are strictly positive parameters. $c$ is consumption and $w$ is wealth.
——...
0
votes
1answer
75 views
Job search theory in discrete time
Let us assume that there is a labor who lives in discrete time universe and discounts future payoffs with the discount factor $b\in (0,1)$.
And we assume that this labor is at period $t=0$ at first. ...
0
votes
0answers
8 views
Brainard on ELB Policy
In this speech, FRB Governer Lael Brainard suggested the following approach to monetary policy at the Effective Lower Bound:
.....I have been interested in exploring approaches that expand the ...
0
votes
1answer
10 views
How does exchange rate change with respect to interests?
If the central bank raises intereat rates, isn't the money supply now less and the exchange rate is greater? I have run into opposite statements and dont know how to approach this problem.
Thanks in ...
1
vote
1answer
40 views
What would be the consequences of Downsizing on the economy?
In the 2017 movie Downsizing, a chunk of the population decides to reduce their body size to just a few inches. What would be the consequences of this on the economy? I'd like to know chronologically ...
0
votes
2answers
79 views
Why do we say that trade and specialization according to comparative advantage lead to one-time increase in PPF of given country?
PPF shows us different combinations of goods that we would be able to produce if we employed existing resources of our country in the most efficient way.
One thing to notice about PPF: It's ...
0
votes
2answers
35 views
What does it mean to “kickstart the economy”?
This answer claims that:
the central banks have been lowering and lowering [interest] rates, desperate to kickstart the economy, but it's not been working
What does "kickstart the economy" mean ...
0
votes
1answer
44 views
Market impact function
I have the following Dynamical system for market impact function
$$p_{t+1}-p_t=a(d_t-s_t)$$
$$s_{t+1}-s_t=bp_ts_t-cs_t$$
$$d_t=y-rp_t$$
where $s_t$ is quantity supplied, $d_t$ is quantity demanded, ...
3
votes
4answers
166 views
Why is so much of macroeconomic theory dedicated to economic growth?
I'm an economics PhD student and throughout my macroeconomics education I've found the topic of economic growth always being discussed at great length. From an Naive perspective id expect that one of ...
-4
votes
2answers
35 views
Is there no equivalent exchange? [closed]
There is no equivalent exchange. I think it doesn't exist. The so-called equivalent exchange is imaginary. In exchange, one side always makes money while the other side loses money. For example, if ...
0
votes
1answer
29 views
Which one of these intepretations of belonging of a factor of production is correct in context of calculating “income of our citizens abroad”?
NFFI can be calculated as income of foreigners here MINUS income of our citizens/corporations abroad. As far as I understand, it's assumed that our citizens earn income by using OUR factors of ...
2
votes
0answers
16 views
Market competitiveness → Capital earns its marginal product. But why?
Why is it possible to tell that, in the case markets are competitive, capital earns its marginal product? What's the formal explanation and what is the economic intuition behind it?
0
votes
2answers
50 views
Would GDP for a pure endowment economy be equal to zero?
(Am I correct?)
As far as I understand, a pure endowment economy means that good just appears in the country without any labor involved in producing them. Like maybe given country lives entirely from ...
-1
votes
1answer
19 views
Where are expenditures of non-government non-proft organizations in the expedienture approach of calculating GDP?
We have 3 categories of spenders:
1.Households (except for buying first-hands houses, all their expenditures are counted as consumption)
2.Firms (all their expedintures are counted as investments)
...
0
votes
2answers
82 views
Do I make correct conclusions about international trade (and ways to increase GDP) from the expedenture approach formula for GDP?
(Please correct me if my reasoning is wrong somewhere)
Net Exports is a part of GDP and consequently its increase or a decrease also causes GDP to increase or decrease, assuming everything else stays ...
1
vote
1answer
35 views
Current Account vs Net Exports
In Mian, Sufi and Verner (2017), the authors look at the impact of an increase in household debt on both net exports and the current account, and find a significant negative coefficient in the ...
1
vote
2answers
29 views
Why will inflation raise sellers' purchasing power?
According to my textbook, in the chapter on inflation,
"When a price rises, buyers of that good must pay more, but sellers get more revenue when they sell it. The loss in buyers' purchasing power is ...
0
votes
2answers
37 views
How can we know how PPF of our country looks like?
PPF of our country is based on potential the most efficient use of our resources, NOT their actual use. The problem is, it's unclear for me how to estimate said potential. How to know where ...
0
votes
1answer
8 views
Calculating Real Budget Deficit, given Nominal Deficit and Inflation
I am doing this course on Coursera. In the context of explaining what Budget Deficits are, the professor puts up the following formula:
Real Deficit = Nominal Deficit - (Inflation*Total Debt)
My ...
2
votes
1answer
46 views
Do policy functions exist for Finite Horizon Dynamic programming problems?
I've been looking at the cake eating problem over a finite horizion and have been trying to figure out if we can derive a policy function for such a problem. My work is written below.
sequence form ...
0
votes
1answer
17 views
Why do we add Net Foreign Factor Income instead of substracting it while calculating GDP?
(It's assumed that we use the income method.)
GDP is supposed to include all incomes received on territory of given country, no matter if receivers of income are citizens or not. So incomes of ...
