Questions tagged [macroeconomics]

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

Filter by
Sorted by
Tagged with
0
votes
0answers
9 views
-1
votes
1answer
26 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
7 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 ...
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 ...
-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
0answers
20 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
1answer
57 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 ...
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
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 ...
0
votes
1answer
44 views

Basic question on S=I

Consider the identity: $$ Y=C+I+G+X-M $$ where $Y$ is defined either as value-added output, or income, or total expenditure. Now, consider private individuals, who decide to save money, as opposed to ...
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 ...
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
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 ...
1
vote
1answer
56 views

Macroeconomics two period model

This is the problem I've been given. Assume the consumers’preference over current and future consumption is given by $U(c,c')=c^\frac{1}{2}*c'^\frac{1}{2}$. Further assume there is no government. 1) ...
0
votes
2answers
28 views

Does demand side economics only apply to manufacturing

For example, if investment falls then manufacturing falls. but there is no investment in secondary markets. Wouldn't recessions cause factories to collapse but why would they affect realtors, used ...
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
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
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 ...
0
votes
2answers
183 views

Balanced budget and change in taxes

Consider a simple Keynesian economy in which the government expenditure ($G$) exactly equals its total tax revenue: $G = tY$ where $t$ is the tax rate and $Y$ is the national income. Suppose that the ...
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
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-...
3
votes
2answers
2k views

Does the introduction of credit card affects Money Velocity?

In my macroeconomics class, our professor showed an example of the introduction of the credit card. She says that this will decrease the money people are willing to hold, and thus increase the money ...
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
15 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 ...
3
votes
2answers
63 views

Is a 6% wealth tax a sustainable source of income?

Elizabeth Warren is planning to pay for various things with a 6% wealth tax on those with fortunes in excess of $1B USD. Now, right or wrong, this seems to be an awfully big annual scoop from a ...
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 ...
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 ...
3
votes
4answers
165 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 ...
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
23 views

What does the GNI/GDP ratio of a country signify about?

What does it mean, if the GNI of a country is lower than the GDP
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
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
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 ...
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, ...
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 ...
-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
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 ...
-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) ...
1
vote
1answer
48 views

Cost-push inflation and labour shortage

Is it possible for there to be a shortage of labour in an economy when there is cost-push inflation?
0
votes
1answer
30 views

What data/factors/attributes do the professionals monitor in a top-down analysis on the macroeconomics?

I am learning to do top-down analysis on a number of sectors in the US equity markets. I have never done it before and I would appreciate it if some professionals can share their experiences with me. ...
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?