Stack Exchange Network

Stack Exchange network consists of 175 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.

Visit Stack Exchange

Questions tagged [macroeconomics]

Macroeconomics is a branch of economics dealing with the aggregate economy as a whole, rather than individual markets.

-2
votes
0answers
13 views

Inflation today is running at about two percent per year. This inflation is costly to [on hold]

Select one: A. Everyone because the purchasing power of the dollar is being eroded B. Individuals on fixed incomes (such as annuities and pensions) C. Households who have borrowed money D. The US ...
0
votes
0answers
10 views

Coefficients of lagged inflation in phillips curve should sum to unity

I am working on an assignment and one questions asks to demonstrate mathematically that if the coefficients of lagged inflation in the phillips curve sum to unity the problem of non-stationarity of ...
0
votes
1answer
30 views

Is it true that when the overall money supply decreases, that the demand for money decreases and the demand for bonds and securities both increase?

Is it true that when the overall money supply decreases, that the demand for money decreases and the demand for bonds and securities both increase? I understand that to increase the money supply, the ...
-2
votes
0answers
16 views

How do I calculate the exact growth rate of output per capita in Solow model with land? [on hold]

I am trying to derive the exact growth rate of output per capita in the Solow model with land. The model's equations are, X is fixed land: $Y_t=K_t^\alpha(A_tL_t)^\beta X^\kappa$ $K_{t+1}=sY_t+(1-\...
0
votes
1answer
17 views

Why would a commercial bank borrow from another commercial bank instead of the central bank?(more questions inside) [on hold]

1) In my textbook, it is said that overnight rate is quarter of a percent below the bank rate, so does it mean that if bank rate is 5%, then overnight rate is 4.75%? What is the point of borrowing ...
7
votes
3answers
404 views

What is the average economic value of a human life?

What is the economic value of a human life? If there are multiple methods to use in calculating, what are they, which method is preferred, and why? Considerations/sub-questions on methods A. Is the ...
-3
votes
0answers
19 views

The government in a mixed economy may… [on hold]

1.levy taxes 2.provide public goods and services 3.redistribute incomes 4.execute different regulatory policies 5.All the above
8
votes
2answers
1k views

Can Dynare solve general equilibrium (GE) models with non-convex adjustment costs?

I know that Dynare (which sits on top of Matlab) can solve many kinds of dynamic stochastic general equilibrium (DSGE) and overlapping generations (OLG) models. I also know that Dynare can handle some ...
1
vote
1answer
26 views

Have I found the correct Emission Price

Let's say that there is a hotel owner $(H)$ and a woodworker $(W)$ working in close proximity to one another. The woodworker produces $x$ units to sell at market at $p_{x}=6,5$. From the woodworking ...
0
votes
1answer
43 views

Why does capital flight cause inflation?

Context: I was watching a video about Venezuela, and, it all started with capital flight due to poor confidence in the government. The government tried to stop it, and in the process it created a ...
2
votes
1answer
56 views

Overlapping Generations model: Social Planner solution

Assume we have a model of OVG where there are 2 overlapping generations, youngs and olds, the agents are two period living. The utility function is logaritmic, and the production function is Cobb-...
0
votes
0answers
20 views

Milton Friedman and Simon Sinek

In Simon Sinek's "Leaders Eat Last" a book on effective leadership within organizations, Sinek is critical of the “shareholder value” theory of business management, which he argues took hold in the ...
-2
votes
0answers
8 views

Quarterly, Annual Growth & GDP Growth [closed]

The following data refers to quarterly real GDP 2017 - Q1 100, Q2 100, Q3 100, Q4 100 2018- Q1 102, Q2 103, Q3 104, Q4 105 Calculate for 2018 Q4 (a) Quarterly Growth (b) Annual Growth ...
-2
votes
0answers
16 views

Nominal GDP, Real GDP, GDP Deflator & Annual Growth [closed]

An economy produces milk and honey as follows 2011 - Price of Milk 1, Price of Honey 2 Quantity of Milk 50, Quantity of Honey 50 2012- Price of Milk 2, Price of Honey 3 Quantity of Milk ...
0
votes
1answer
54 views

Debt-to-GDP ratio in connection to inflation

On this segment of the Tucker Carlson show, interviewing Robert Hockett, as an advisor to Rep. Octavio-Cortez on the proposed Green New Deal, the following interchange ensues: Tucker: "On the low ...
0
votes
0answers
5 views

How do I rebase my GDP with different base year?

My data are the following: Current GDP 1996-2017 Real GDP (base year 1985) - 1996-2009 Current GDP - 2009-2017 Real GDP (base year 2000)- 2009-2017 My question is how would I rebase my data from ...
0
votes
1answer
43 views

Can central bank interest rate hikes lead to a price gain in equities?

I ran an empirical analysis on recent interest rate changes of European central banks on Swiss equity prices and found statistically significant results. A 1 percentage point increase in interest ...
0
votes
1answer
26 views

Here's a question about the solow model [closed]

At first, I was confused by how y keeps increasing after depreciation exceeds savings, then I finally found what was truly bothering me. The fact that when depreciation exceeds savings, capital per ...
-2
votes
0answers
17 views

Overlapping generations model [closed]

I’ve been working on the overlapping generations model. Not sure how to tackle this question. Hope you guys can help.
3
votes
1answer
55 views

Was the 2008 financial crisis caused more by the US subprime mortgage lending or more by an international energy and oil pricing crisis?

I recently read The Big Short by Michael Lewis in which the depiction of the role of subprime mortgage lending in the US and then run away speculation on CDOs are shown to be the central and primary ...
0
votes
0answers
18 views

Disaggregated price index

im trying to make my own consumer price index using the laspeyres index methology. However im having problems finding the individual prices. However i have the disaggregated cpi components. For ...
0
votes
0answers
4 views

Deficit adjustment - role of exchange rates

Krugman states the following: Suppose the world economy is in equilibrium. Suddenly the dollar depreciates for some reason. Almost all economists would agree that long run effect would be some ...
1
vote
1answer
31 views

Electric Vehicle effects on family and macro-economics?

What happens economically when cars last 1000,000 miles on cheap local energy? EV's can save an average family 2000 dollars a year on energy costs, and 2000 per year on automotive investment. That'...
5
votes
1answer
1k views

What is Saddle Point Stability?

What is saddle point stability and what sorts of functions or systems of equations give rise to such a thing? For example, would we say that a two systems of stochastic difference equations that are ...
0
votes
0answers
182 views

Question about an economy with 3 components household, firm and government with functions given

I've spent considerable amount of time on this question, in vain. It is from one of the competitive exams for admission to a grad econ program. Help would be tremendously appreciated. Thanks. An ...
1
vote
1answer
22 views

Is there book or research on economically sustainable design of town or village?

I'm looking for a book which may help to design a self-sustainable small settlement, which can maintain its own economy with limited connections to the outside world. Prefereably it should answer ...
0
votes
2answers
40 views

German economic growth in 20th century

I have question regarding this great animation: https://www.visualcapitalist.com/animation-the-worlds-10-largest-economies-by-gdp-1960-today/ Why Germany GDP shrunk so much from 1995 to 2000, while ...
0
votes
0answers
7 views

Can structural unemployment be shown in a labour market diagram?

Structural unemployment is a part of natural unemployment, so I know it can't be shown in an AD/AS diagram. But does that mean it also can't be shown in a labour market diagram?
13
votes
4answers
3k views

How does a national budget differ from a household budget?

We are often told by pundits that "Country X cannot spend more than they take in in revenue, because a house that makes A and spends B will always collapse if B>A". Essentially the siren calls of a ...
2
votes
0answers
40 views

Insurance and Hirshleifer effect

I am trying to understand the statmement that 'public information kills insurance opportunity' -- referred to as Hirshleifer effect. Does it (in general) lead to some undesirable outcomes? Could you ...
0
votes
1answer
26 views

Change in inventory

Inventory change=last period's ending inventory- the current period's ending inventory. Change in inventory= production of the firm during the year- sale of the firm during the year No doubt in (1) ...
0
votes
0answers
37 views

Elasticity of employment in respect of reduction of working time

If elasticity of employment in respect to working hours is positive then work time reduction decreases employment and the opposite is true if elasticity is negative? I mean if I want to see how ...
0
votes
0answers
40 views

Estimation of a Non-linear production function with Non-linear least squares

Suppose that you have to estimate a Non-linear production function (for instance a Cobb-Douglas or a CES) by using Non-linear LS (and hence without log-linearization). You have just aggregate time ...
9
votes
7answers
4k views

What Level of Government Debt to GDP Ratio is Sustainable?

I was reading that Japan has a debt to gdp ratio of 240pc and I cannot understand why this has not left the country "bankrupt"? From looking at this like an ordinary person this level would be ...
0
votes
0answers
76 views

Rational expectations

Under rational expectations and no nominal rigidities, aggregate output is sensitive to ___________ supply and ___________ demand shocks. a) Anticipated, anticipated (b) ...
-1
votes
0answers
37 views

Evidence pro/contra that green economy generates growth? [closed]

Growth is absolutely necessary due to the wide-spread poverty apart from the golden billion. There are countries with 25% poverty rates even in the European Union. Poverty can not be overcome without ...
0
votes
0answers
36 views

Is the development of market rate housing independent of the development of affordable housing?

Is the development of market rate housing independent of the development of affordable housing? Can anyone provide evidence that supports or refutes this? Here is my thinking. While I have yet to ...
0
votes
0answers
43 views

What are the impacts of a small increase of the wages on consumption, labor supply and production?

We have given the utility function $\displaystyle U(v(c)-k(l))$ where $\displaystyle u$ and $\displaystyle v$ are increasing and concave functions and $\displaystyle k$ is increasing and convex. ...
0
votes
0answers
16 views

Can the same recession be both inflationary and deflationary?

Suppose there’s a recession caused by a bubble bursting in a particular industry. Maybe a great number of houses has been built but there’s hardly any demand, it turns out. Or some important crops are ...
1
vote
0answers
15 views

Deriving Sufficient Conditions For Existence of Unique Non-Explosive Equilibrium In DSGE Model With Hybrid New Keynesian Phillips Curve

Consider the following New Keynesian DSGE Model with standard notation: $\pi_t = \kappa y_t + \gamma_f \mathbb{E}_t[\pi_{t+1}] + \gamma_b \pi_{t-1},$ $y_t = \mathbb{E}_t[y_{t+1}] - \frac{1}{\sigma}(...
1
vote
1answer
41 views

Solving a LRE model in King-Watson form using alternative algorithms

I have a linear rational expectation model that is in the King-Watson form: AE_{t}y{t+1} = By_{t} + C_{0}x_{t} + C_{1}x{t+1} (1) with the driving process <...
1
vote
2answers
45 views

Can I make this assumption about the utility function?

My question concerns a household's utility function U(c,l). We're told that the partial derivatives dU/dc and dU/dl > 0, and the second order partial derivatives are negative. Now, can I assume ...
1
vote
3answers
74 views

Bank Runs During the 1930s

Why were there numerous banks run right after the stock market crash of 1929? Why would a bank fail because the stock market crashes?
0
votes
1answer
34 views

Greek Debt Crisis

If the Greek government defaults on its bonds issued by French and German investment banks, how does that prevent the French and German governments from paying back the money that they owe to ...
0
votes
1answer
20 views

Graph Equilibrium line from disposable income table [closed]

I'm having a bit of trouble with a homework problem. The instructions say: plot the equilibrium line point by point (use each disposable income entry in the table above for a total of 7 points). ...
1
vote
1answer
25 views

How Do Imports Affect GDP

Lets say the U.S. imports a brand new Ferrari that costs $600,000. I know that it would take away from the U.S. GDP since it's considered an import. However, if a consumer buys that Ferrari from the U....
0
votes
1answer
40 views

Is there a definitive way to tell if an action causes a movement or shift in a supply-demand graph?

I am taking AP Macroeconomics, and am about 2/3 of the way through the curriculum. We have learned about various supply-demand graphs, and right now we are working on the market for money. I have ...
0
votes
0answers
9 views

When measuring the net economic impact of a citizen, what measure is used?

When measuring the net economic impact of a citizen or group of citizens, what measure is used? Is it GDP contribution (ie GDP/capita)?
1
vote
1answer
24 views

What levers are typically available to a Government to exit an economic downturn?

What levers are typically available to a Government to exit an economic downturn? I can think of currency devaluation, efficiency improvements and infrastructure spending (possibly using funds raised ...
1
vote
2answers
53 views

Why did it take so much QE by the ECB to raise the Eurozone inflation to 2%?

From 2015 to 2018 the ECB increased the money supply by around 20% (around 6% y/y), with a GDP increase rate under 1%. Yet the inflation rate remained under 2%. A back-of-the-envelope calculation ...