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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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Analyzing vast economic/financial data

I have data science projects coming up in a university course in the upcoming quarters, and I was interested in using financial/economic data since there is so much of it. Also, I do have a hobby for ...
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1answer
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find the equilibrium level of Y

Assume that the LM curve for a small open economy with a floating exchange rate is given by Y = 200r – 200 + 2(M/P), while the IS curve is Y = 400 + 3G – 2T + 3NX – 200r. The function for NX is NX = ...
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Net Neutrality and Recent Telecom Projects

It has come to my attention that the big telecom providers are launching some big infrastructural projects recently (at the time of post, Jan. 2018). I presume by that they mean talking laying cables ...
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Real Income and a Fixed Money Supply

What would happen to nominal income and wages if the money supply were fixed (100% reserve banking). Would real wages increase, even though nominal wages would stay the same or even decrease?
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Effect of money supply on price level

Consider a macroeconomy defined by following equations M = kPy + L(r) ; S(r) = I(r) ; y = m ; Where M is money supply, P is price level, y is output, r is interest rate, while k,m are constants. S(...
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How to efficiently study and learn Economics?

I read there are a couple of questions asked in this regard, but I am not quite satisfied with the provided answers. I am currently doing my master's degree (expecting to pursue a PhD) in Economics, ...
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1answer
190 views

Labour markets and supply-side policies: too much stress put on the WS push factors?

In reading several macro textbooks, it seems that most of the supply-side policies tend to be focused on the labour supply side (wage setting curve), instead on the firm/labour demand side(price ...
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2answers
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Is it possible to give , in economics, an example of a relation ( set of ordered pairs) that is not a function?

In mathematics, some relations ( sets of ordered pairs) are not functions. I know economists make use of functions. But do they also consider relations that are not functions. In which branch of ...
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The value of money in a model economy. Has this been addressed?

Consider the following question: "Given a simplified economy which produce and trade some products A,B,C etc... with N agents and a total money supply of M. What will be the price of A, B, C as ...
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0answers
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MCQ question about trade restrictions

a country has decided that it wants to increase its free trade with trading partners. which measure would help achieve this objective a)a higher quota on imported cars b)subsidy to domestic car ...
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0answers
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Different explanation for economic growth, depending on the length of the period considered

I'm being introduced to macroeconomics, and a colleague asked why do we say that in the short term the productivity of a country is determined by the "demand side" (IS/LM model) while in the long run ...
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Is deprecation included in the value added approach?

I have been asked this question: "Folt Industries in 2017: It sold 1000 in sweaters, it imported 200 in wool from abroad, and purchased 200 in wool from domestic suppliers, it purchased a sewing ...
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1answer
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Wages in Solow growth model with savings = 0

I am trying to understand the change of wage rate and rental rate in the Solow growth model with s = 0. It is clear that capital per capita will approach 0 (due to depreciation of capital). Also is ...
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How is employment related to aggregate demand and aggregate supply?

When we talk about excess or deficient aggregate demand , how does employment suddenly comes ?
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6answers
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Mathematical Micro/Macro Economics Textbook Recommendation

I was formerly an economics major and now also majoring in mathematics. I want a textbook that is rigorously based on mathematics; not just using mathematcis whenever the author wants, but in a more ...
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0answers
14 views

Financial market Goods market

I'm a first year in economics. I really am getting confused with the financial market and money market and goods market. In terms of what they do, the financial market finds the real interest rate in ...
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0answers
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Pareto efficiency (optimality conditions) in simple New Keynesian model

I am looking for the pareto-optimal equilibrium for a central planner's problem in a simple New Keynesian model. The planner's problem is to choose $\{ C_{t}, H_{t}, Y_{t}, \pi_{t}, \{h_{t}(j)_{j=0}^{\...
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3answers
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Calculating nominal GDP

I would like to understand one detail of how nominal GDP of a country in a given year is calculated. It seems to me that the GDP in each country is first calculated in the national currency and then ...
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1answer
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CES function estimation

For a paper I was using the micEconCES package to estimate the CES production function for a country at the aggregate. For a two-input function with capital and labour I used for the variables the ...
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1answer
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Why doesn't Aggregate Demand mean National Income whereas Aggregate supply is equal to national income?

Aggregate Demand is Basically $$ AD = C + I + G + X - M $$ Is not this national income Through Expenditure Method ? Then why don't we treat AD equal to National Income ?
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1answer
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Data Set for Mankiw, Romer, and Weil 1992

I am trying to replicate the results of Mankiw, Romer and Weil 1992, and cannot seem to find the original data.
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1answer
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How to derive aggregate demand and supply from IS-LM with sticky prices? [closed]

I was wondering if my thinking is correct on these questions. For part 1, I just put the two equal to eachother after solving for 1000r, and I ended up with Y = 500/P + 200 for the aggregate demand. ...
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1answer
54 views

Augmented Gravity Model

I am currently using the gravity model for my dissertation on migration flows. Do gravity models need to be augmented by dummy variables only or can other explanatory variables (such as the ...
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2answers
563 views

Interest rate Effects on labour supply

I was analysing, free of specificities, the effects of an increase in the real interest rate on labour supply in a two period setting. The obvious effect on leisure is the intertemporal substitution ...
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2answers
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Balance of Trade ( Surplus and Deficit)

I'm new to economics. I want to ask that what remedies that the government can actually employ to address the deficit/surplus in the fish trade balances over time? My attempt, Trade deficit (i) The ...
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1answer
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Negative Inflation, AS/AD framework, What Graph to use?

My macroeconomic homework contains the question below, and I'm not sure what graphs we're suppose to use to solve it. I believe I can answer the whole question using the IS-MP Diagram, but do I need ...
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1answer
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Quarterly GDP growth: YoY vs QoQ / terminology

Quarterly GDP growth can be calculated either in terms of YoY change or - in the case of seasonally adjusted data - in terms of QoQ change. (A third option would be to annualize the QoQ rate.) To ...
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0answers
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How can the “Share of merchandise imports at current PPPs” be negative?

I'm looking at the Penn World Table 9.0 data, and find that the "Share of merchandise imports at current PPPs" (csh_m) can be negative. For example, ...
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3answers
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Relationship between Real Interest Rate and Employment

The country of Kingsland is considering the introduction of a compulsory retirement saving scheme. Under this scheme all workers are required to save ten per cent of their annual wages and ...
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0answers
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Relationship between Elasticity of substitution of sectoral outputs and elasticity of substitution of inputs

There are two sectors Y1 and Y2. Composite output is given by CES form - Each sector employs Capital and Labor in combination through Cobb-Douglas Production Technology. The paper mentions that ...
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0answers
29 views

Structural Adjustment Programs question

I am writing a paper about SAPs. Its very controversial because of all the imposed policies on the country they are lending money to, the countries tend to get poorer instead of richer. I am still a ...
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0answers
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Kink in the dynamic IS-curve

I am reading Monetary policy, inflation, and the business cycle: an introduction to the new Keynesian framework and its applications by Gali. Consider this statement: In the New Keynesian model, the ...
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0answers
9 views

Macro economics drivers in supply chain

I am working on building a sentiment indicator for companies and investors in the supply chain. I am looking for interesting research on the macroeconomic drivers in the global supply chain (...
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0answers
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Wealth Distribution and market incompletness

From the literature of incomplete market (e.g. Aiyagary 1993,1994), it seems to be the case that: With complete markets, the capital distribution in the final steady state depends on the distribution ...
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2answers
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How important are capital requirements for controlling broad money supply?

Interestingly, the Bank of England (BoE) is one of the few central banks that does not have reserve requirements. Canada, the UK, New Zealand, Australia, Sweden and Hong Kong have no reserve ...
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1answer
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Use Lag Operator to find Lifetime Budget Constraint

The budget constraint is $c_t + \tau_t + s_{t+1} =w_t(1-l_t) +(1+r_t)s_t$ And assume $\underset{t \longrightarrow \infty}{lim} \ \displaystyle{\frac{s_t}{\Pi_{i=1}^{t-1} (1+r_i)}} = 0$ Lag ...
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1answer
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Question Regarding 'Potential Output'

I am learning about potential output. We have been told that it is the amount of output that an economy can produce when using its resources, such as capital and labour, at normal rates/maximum ...
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0answers
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How should I rebase my GDP?

I have a constant GDP data from 1988 to 2009 in constant 1985 prices and GDP data from 2009 to 2017 in constant 2000 prices. My question is how should I rebase my GDP? Upon searching the web, i don'...
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1answer
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What policies are in place to police financial speculation in the modern era?

Maynard Keynes in section VI in chapter 12 of his General Theory of Employment, Interest & Money writes: If I may be allowed to appropriate the term speculation for the activity of forecasting ...
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1answer
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Wealth - Bond Market and Liquidity Preference Framework

I've been told that an increase in wealth will lead to an increase in both the demand for Bonds determined by the Theory of Asset Demand. This should shift the bond curve to the right, increasing ...
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3answers
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What are the economic ramifications of rent control?

What effect do they have on renters? Landlords? Are there examples of rent control working, improving living conditions for renters? I.e. What are the main arguments for/against rent control (...
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1answer
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If saving equals investment, can there ever be a stock of savings?

National product accounting identities imply $S=I$. Since these are flow quantities, everything saved in a particular period is invested, thus there is never an accumulated stock of savings. Is this ...
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0answers
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can human development index be a proxy for human resource?

can I use hdi instead of literacy rate as a proxy for human resource ot human capital? is human resource and human capital the same? Thank you.
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0answers
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Monetary Policy under commitment. How to solve the optimization problem?

Under commitment the CB might follow this problem as Monetary Policy strategy: $$ \min_{\pi_t,x_t}=E_0\sum^\infty_{t=0}\beta^t \left(\frac{1}{2} ( \pi_t^2 + \alpha x_t^2 )\right) $$ $$ \text{s.t. }\...
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0answers
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How to intentionally crash an economy? [closed]

If you were a high level influencer (policy maker, economic adviser, president, etc.) of a major country or a larger economic area and you'd intentionally want to cause a (recoverable) crash in its ...
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0answers
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why not we use one universal currency? [duplicate]

I have a little knowledge of "why we still use multiple currencies?" but it does not make a click in my brain or the sense in reasoning that much that some country that is not influenced still use the ...
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0answers
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What are some common causes of jobless growth?

While "jobless recovery" is often discussed in the aftermath of recessions in Western countries, it seems it's always a short-lived phenomenon. On the other hand, it looks like in other parts of the ...
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4answers
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Is it possible to eliminate the U.S. national debt?

A political science teacher of mine has said that the U.S. national debt has grown way beyond reach and is now just a political talking point with no real value. He says that there is no point in ...
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1answer
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DMP Search Model - Terminology

In the most basic Diamond-Mortensen-Pissarides (DMP) model we have the variable $V$ which represents the present discounted value of expected profits from a vacant job. The corresponding Bellman ...
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2answers
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German economic growth in 20th century

I have question regarding this great animation: Animation: The World’s 10 Largest Economies by GDP (1960-Today) Why did Germany GDP shrink so much from 1995 to 2000, while US was still growing very ...