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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1answer
76 views

How are working hours statistics computed?

In a recent conversation, I was suggested that national working hours aggregates, as provided by bureaus of statistics, are based on surveys on time use. Is that true? Can macro labor data, which is ...
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Macroeconomics Textbook on New-Keynesian models

I'm looking for textbooks that explain the New-Keynesian models, without taking shortcuts on the mathematics, that would go in depth on the derivations of the formulas. I appreciate rigour, and ...
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What Constitutes The Size Of An Economy?

My Geography textbook defines the size of an economy as: Size of economy is measured in terms of value of goods and services and grows over time. This is caused by increase in population, ...
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1answer
321 views

How is monetary policy fair in the current economy? [closed]

I've just read Money Creation in the Modern Economy, an article published by the Bank of England. This article brings about a lot of questions in my mind. This article talks about money being created ...
3
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1answer
284 views

What exactly is L in a Cobb-Douglas production function?

Cobb-Douglas is $Y = AK^{1-\alpha}L^{\alpha}$. What exactly is $L$ in Cobb-Douglas? Is $L$ the number of workers available in a single year? Working hours?
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113 views

Is Dominique Strauss-Khan really “the best economist of France”? [closed]

Dominique Strauss-Khan (often called DSK) is a French politician, from the Socialist Party. He has been Minister of Economics and managing director of the International Monetary Fund (IMF) from 2007 ...
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4answers
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What is the relevance of economic growth?

Economic policies often mention high economic growth as a desirable path. For example, "We started to lay a new foundation for stronger, more durable economic growth." -- President Obama, ...
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What is the Gross Domestic Product (GDP)?

I suppose GDP is supposed to create a measure of a country's wealth/welfare, something easily indexable. But how exactly is it composed? And is its composition disputed? How good is it at measuring a ...
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Guess and Verify

In dynamic programming, the method of undetermined coefficients is sometimes known as "guess and verify." I've periodically heard there are canonical guesses one might make. In particular, I've seen ...
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What are is the reasoning behind the sharp fall of oil prices starting in mid 2014?

Things I have considered: Poor economic conditions around the world could have caused an unpredicted decrease in demand. The resulting surplus has begun driving prices down. This could be ...
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1answer
160 views

Oil as a function of GDP

In Mankiw, N. (2012). Principles of Macroeconomics (6th ed.)., on pg 456 Mankiw says "The amount of oil used to produce a unit of real GDP has declined about 40 percent since the OPEC shocks of the ...
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Unemployment and the Frisch-Elasticity

There is the long debate on the Frisch-Elasticity being the driver of unemployment over the business cycle. One argument against the voluntary-unemployment mechanism of RBC models is that if we ...
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947 views

Calibration of utility function parameters controlling labor disutility

Consider the very basic utility function $$ u(c, n) = \log (c) - \alpha \frac{n^{1 + \frac{1}{\nu}}}{1 + \frac{1}{\nu}}$$ Where $c$ is consumption and $n$ is working hours. As the Frisch elasticity ...
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Why did creating the Eurozone cause the cost of labor to rise in Greece?

As I understand the implementation of the Euro as a common currency caused labor prices to spike in certain countries, Greece being one of them. Why did this happen? Why did it affect certain ...
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Is ongoing economic growth possible without additional non-renewable inputs?

Can ongoing economic growth occur without use of additional non-renewable inputs? That is, any additional inputs would only be from renewable resources: all non-renewable resources would be reused, ...
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1answer
113 views

Empirical Data on Demand for Minimum-Wage Jobs in the USA

The idea of a minimum wage and its effects in terms of supply and demand are well-known in mainstream economic theory. I'm constructing an argument regarding the minimum wage, and what I'm curious ...
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1answer
518 views

Is money lent by central banks to private banks counted in MB or M1?

If a bank borrow money from a central bank but keeps it as a reserve instead of lending it to someone else, is it counted in the monetary base (MB) or money supply measure M1, using US definitions ? ...
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1answer
57 views

Economic Overview of Pacific Island Nations

What are the key drivers of growth for these small pacific island nations? I would expect tourism and natural resources to be pretty central to these economies. Is there anything else? What are the ...
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1answer
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Best resources to self-educate myself in economics

I want to learn Economics by myself and I'm looking to build a path with people who're in this field to how and in what order should I learn Economics, I did some research and I've found many ...
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How would banking in EU change if taxpayers withdrew their support for Deposit Guarantee Scheme?

Disclaimer The question pertains mostly to EU but I believe counterparts to Deposits Guarantee Scheme exist world-wide. Assumption Let’s suppose that support for liberal ideas and free market rises ...
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1answer
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How to calculate GDP increase using Cobb-Douglas production function?

I use this economics stack exchange for the first time. I have a question regarding the Cobb-Douglas production function. The question is this: GDP in an economy is growing at 3% a year in real terms. ...
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1answer
168 views

Where did Robert Lucas say “market is always in equilibrium”?

Does have anyone link to the reference where Robert Lucas said "market is always in equilibrium"?
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Intermediate level macro/econometrics literature on grey/black markets

The grey economy is a part of the economy that is not taxed because it functions 'under the table'. It is illegal in the sense that it's a form of free riding, but it is not considered damaging by ...
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Total market cap in country, and average p/e per country and continent(europe)

sorry I am not sure to post this question in quant stackexchange or in here. I have posted it previously in the below link https://quant.stackexchange.com/questions/18633/total-market-cap-in-country-...
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Why New Zealand dollar keeps falling against USD and other currencies?

New Zealand seems to have strong economy and governed well by the RBNZ. Agreed that recent decrease in the dairy prices globally has some negative effects on the economy. But with the large service ...
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1answer
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Indirect Impacts Of The Netherlands Cutting Greenhouse Emissions?

On 24 June 2015, the Dutch District Court in The Hague ruled that the government must put policies in place to deliver, by 2020, cuts in the country's greenhouse gas emissions of at least 25%, ...
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What is the difference between the Classical and Keynesian models?

I have read something about the short and long run aggregate supplies, but I don't know what the main difference is about these two models. Does someone know the difference(s) between these two models?...
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Who enjoys the Net Domestic Product?

Suppose the Net Domestic Product in a certain sector (e.g. agriculture) is 10 billion. Who enjoys this 10 billion? Initially, I thought that this 10 billion is the gross income of the farmers. So ...
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Is elasticity of substitution between goods empirically constant?

In New Keynesian models, we use a lot of CES assumption, usually Dixit-Stiglitz, to develop an economic model. Is CES, constant elasticity of substitution between goods, empirically (approximately) ...
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1answer
233 views

Why does profit maximization implies that both of the following are equal? [closed]

Why Profit maximization implies that rate of return to capital equals the net marginal product of capital. Prove and give intuition why both are equal. I also wonder that why it doesn't implies rate ...
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1answer
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the slope of the LM curve [duplicate]

I'm confused because my textbook says the higher interest elasticity of money demand is , the flatter slope of the LM curve is. If the interest changes, then isn't it the movement along the curve in ...
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1answer
396 views

How did the Plaza Accord revalue the Japanese Yen?

In September 1985, Japan, the US, and three other nations agreed to the "Plaza Accord," which appreciated the Yen and Deutsche Mark. The value of the Japanese Yen appreciated from 200 Yen per Dollar ...
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3answers
407 views

Raising interest rates to prevent inflation

I am reading a book about the Mundell-Fleming Model and I have encountered a part which says: The Fed raised U.S. interest rates several times during 1994 to prevent U.S. inflation. Isn't it the ...
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How did 'crisis' spread through the financial system in '07-'08?

How did 'crisis' spread through the financial system in '07-'08? Specifically, what is the process by which a subprime mortgage impacts the health of the credit markets as a whole? An explanation in ...
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1answer
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RBC model and indivisible labour

First of all, I would like to apologise for the fact that I will include a link in my question rather than a direct question, however, I have no idea how to do it in a different way. I have been ...
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1answer
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Does any international organization (such as IMF) provide data on capital control / financial openness?

I've read some literature on measuring capital control / financial openness, but I am wondering if there is any data directly collected by international organizations like IMF that measure capital ...
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1answer
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Sources of free European national income and output data?

What are good free sources of European National income and output data? By this I mean, amongst others: GDP and the variations of this such as; ...
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2answers
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Government spending and revenue statistics

I am looking for thorough statistics of budgetary spending and revenues by category for approx all oecd countries. If not for all oecd i will be happy to have data only for Switzerland. I am ...
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1answer
127 views

Questions regarding foreign exchange online trading

I am currently studying economics in college and taking course Macroeconomics and International Finance which covers foreign exchange market topic. The class is very crowded since there are more than ...
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Which capital accumulation is right? $K_t = (1-\delta)K_{t-1} +I_t$ or $K_t = (1-\delta)K_{t-1}+I_{t-1}$?

In a lot of models with capital, I find different variants of capital accumulation formula as follows: $K_t = (1-\delta)K_{t-1} +I_t$ or $K_t = (1-\delta)K_{t-1}+I_{t-1}$ Which one is more ...
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1answer
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Lagrangian: How to understand the No-Ponzi Condition

In http://www.uni-hamburg.de/fachbereiche-einrichtungen/fb03/iwwt/makro/slides2.pdf page 8, lagrangian is written as follow: $$L = E_0 \sum_{t=0}^{\infty}\beta^t\{U(C_t,N_t) + \lambda_t(P_tC_t + ...
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What condition is exactly used to solve forward New Keynesian IS equation?

In http://www.uni-hamburg.de/fachbereiche-einrichtungen/fb03/iwwt/makro/slides3.pdf, you can see New Keynesian IS equation being solved forward to yield a formula for output gap (page 40 of the pdf ...
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1answer
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Real world application of IS-LM model

I learnt IS-LM model but I got curious whether it is applicable to the real world. I mean it's just an model, so I doubt that the realtionship between Y and r actually exists. Are there any real life ...
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Who regulates the balancing of the books for commercial banks and how is this done? Is it public information?

I've just read Money Creation in the Modern Economy, an article published by the Bank of England. This article brings about a lot of questions in my mind. This article talks about money being created ...
2
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1answer
134 views

Secular Stagnation: A Plain-English Explanation

Put aside the mathematics and jargon for a couple minutes. If you had to explain the concept of secular stagnation to an (intelligent) person with no economics background, how would you go about doing ...
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1answer
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Solow-Swan production function- What is '$L$'

If $L$ represents the amount of labour in the Solow-Swan production function: $Y/L$=$f(K/L)$ how can $Y/L$ equal 'per-capita income' if $K/L$ is the capital/labour ratio? I thought per-capita ...
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Hot Topics in Labor-Macro

I'm interested in currently hot research topics within Labor Macro. I'm only aware of the debate on the recent shift in the US Beveridge curve, and, of course, the olden but golden Shimer puzzle. ...
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121 views

How does inflation in income go 'hand in hand with inflation in prices'?

Source: p 594, Economics, 3 Ed, 2014, by N G Mankiw, M P Taylor Yet further thought reveals a fallacy in this answer. When prices rise, buyers of goods and services pay more for what they buy. At ...
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257 views

Yield and interest rate?

Are they the same thing? Is yield the annualized return rate? Why when yield rise, yearly return increases but price falls?
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Why plug deficits with bonds rather than printing money?

The UK is running a budget deficit £107 billion a year. Inflation is currently running at 1%. Given these facts, why do they plug the gap by selling debt rather than just creating the money to cover ...