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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7
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1answer
200 views

M2-M1: what's left in the delta?

If you subtract M2SL - M1SL, the chart looks as follows: The change is due to re-classification: M1 before: (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, ...
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1answer
99 views

What would be the consequences of Downsizing on the economy? [closed]

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 ...
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1answer
50 views

Seemingly contradictory relationship between bond yields and economic growth?

I have a few seemingly contradictory ways of viewing the relationship between economic growth and bond yields: Reductions in FFR are largely induced by IOER. Since IOER and bonds are competing ...
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0answers
24 views

Is it feasible for another country to attack the US dollar via counterfeiting? [duplicate]

Assuming, for the sake of the question, that a well-resourced adversary (another country, most likely) had the means and motive to conduct economic warfare against the United States through large-...
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1answer
75 views

Does net exports has to do with borrowing and lending?

In my course notes, it says that "when net exports is negative it means that the country is borrowing from other countries" but I do not get it if net exports is negative that only means ...
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Social Planner problem: two period

The production function is $F(K_t,N_t)=AK_t^\alpha N_t^{1-\alpha}$ and depreciation $(\delta)$ is equal to 1. The given preferences are as follows: $$U(c_1,l_1,c_2,l_2)=\gamma log(c_1)+(1-\gamma)log(...
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0answers
37 views

Remove seasonality in R

I have data of total exports of fish from my country in the time period 2010-2020. Since our currency (NOK) has gotten weaker to the currencies we are trading with, we have gotten a lot more value ...
2
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1answer
52 views

What is business cycle frequency?

I am reading a paper by Michal Andrle, Jan Brůha, Serhat Solmaz (On the sources of business cycles: implications for DSGE models). The authors use data at a quarterly frequency for their empirical ...
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1answer
38 views

Risks asscoiated short term stimulus as interest rates approach zero

TL;DR Government interest rates are approaching zero. What are the risks to borrowing large sums in the current enviroment? Would inflation occur? Full Story I was recently reading an article about ...
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0answers
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Simple worked-out example of computing future cashflows of other countries' assets?

I read through a research note from Bridgewater and a lot of the discussion centered on finding attractive cashflows of global stocks in USD terms. Here is a line for ease of reference: Across a ...
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1answer
48 views

Constant to the power of t in steady state

I am wondering how to get the steady-state for the following Euler equation. I know that we can get rid of time in subscripts. However, here I have a constant (a) to the power of $t$. Does anyone know ...
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1answer
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A country borrowing from the rest of the world

Well I'm having a some difficulty in understanding completely what the following sentence means and I would like to be sure. «(...) a country running a trade deficit is buying more from the rest of ...
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1answer
64 views

Bellman Equation with Two Discount Factors

For the following social planner's problem $$ \max \mathbb{E_{0}}\sum_{s=0}^{\infty}\beta_{1}^{s}(\alpha U(C_{s}^{1}))+\beta_{2}^{s}((1-\alpha)U(C_{s}^{2})) $$ $$ s.t.\ \text{some constraints ...
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41 views

Mathematical question in macroeconomic task

I am currently working on a project where I want to explore how changes in a couple of currencies affects the income for my countrys exported fish. My country (Norway) sells it fish in 4 different ...
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1answer
66 views

Did the Bank Of England say QE doesn't work?

https://www.bankofengland.co.uk/working-paper/2020/does-quantitative-easing-boost-bank-lending-to-the-real-economy Staff Working Paper No. 883 Published on 14 August 2020 From the conclusion: If the ...
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0answers
50 views

What does the economic collapse of a country mean and what are its consequences?

I live in Iran, a country that has been under sanctions since 1979. After the US sanctions on Iranian oil, everything got worse and the price of everything increased four times in just three months. ...
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10 views

Help to find China Data

do you know where can I find data about the R&D expenditure of china from 1976 until 2020?
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1answer
17 views

Why does US equities valuation have the downward pressure on USD?

While making readings on economics I came across a sentence: ..large valuation gap that has opened up between US equities and the rest of the world. This could help bid up non-US equity valuations and ...
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1answer
26 views

What is the resolution down to which the annual inflation value can be controlled?

Judging by previous posts in the site, the inflation target is set annually to 2% by the Federal Reserve. Regardless of the reasons behind this choice, I am curious to understand how precisely can the ...
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1answer
30 views

Is GDP the market value of goods consumed or goods produced in a time period?

Definitions across various resources state that GDP is the market vaue of all goods 'produced' in a certain time period. But while calculating GDP by expenditure method, consumers' spending is one of ...
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3answers
116 views

Why is deflation bad for economy? [duplicate]

As now many people are talking about the inflation of US dollar on the account of the COVID-19 pandemic and the printing of trillions of US dollar bills, the price of decentralized cryptocurrencies ...
0
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0answers
16 views

Increase in money supply when price are flexible in the basic new keynesian model

I would like to know what would be the effect on price and quantities of an increase in money supply in the basic new keyensian model. What happen if price are fully flexible ? What if prices are ...
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1answer
53 views

Help with AP Macroeconomics FRQ [closed]

I am a senior in High school and am taking an AP Macroeconomics course. I just took an FRQ and received an F on it. I asked my teacher multiple times to explain why my answers were wrong, but to no ...
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1answer
37 views

How to define the natural rate output

I'm following Woodford's Interest & Prices to derive the microfundations for a New Keynesian model with staggereed prices. I defined the utility function and disutility function (1.1 at page 144) ...
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3answers
2k views

Should Finland leave the eurozone?

Finland's economic recovery from the shock of the global financial crisis of 2007–2008 has been very weak. The country has been in recession for the past three years, with GDP expected to expand by ...
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1answer
32 views

Macroeconomic model or knowledge base representing connected industries in the world

I'm looking for data (model, Expert system, knowledge base) that describes how different industries and countries interact with each other. And the nature of the relationship between them. An example ...
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3answers
73 views

How can an economy pay for all the products it produces?

How can the totality of an economy pay for all the products it produces, if the initial amount of money in the system (before the profits on all of the products is realized) is less than the amount of ...
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1answer
46 views

What happens to an MBS if all the underlying mortgages are fully paid back by the borrowers much before the maturity date?

What would happen to an MBS (mortgage-backed security) if hypothetically speaking all the underlying mortgages were fully paid back by the mortgagees (borrowers), much before the maturity date? I ...
2
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1answer
42 views

Solow model: Partial derivative of k* with respect to g

Given the solow model $sf(k)=(n+g+\delta)k$, written as $$F=sf(k^\star)-(n+g+\delta)k^\star=0$$ I am trying to find the partial derivative of k* with respect to n Here is what I've tried: I use the ...
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0answers
38 views

What is the 'gold standard methodology' in macroeconomics research?

What is the 'gold standard methodology' in applied macroeconomics research? In drug discovery research, for example, there are many methodologies, but RCTs are the gold standard, right??...like the ...
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38 views

Loosely speaking, are all modern economies 'Keynesian' in their stance on spending during downturns?

Keynesian economics is defined as: increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression. Do all modern economies adopt a Keynesian ...
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0answers
51 views

What is the no ponzi condition for this representative consumer problem? Tags: Initial condition, no-ponzi game

This question is following Farhi et.al. 2014's consumer budget constraint modified to add a government bond and removing money. A simplified version is given below which is pertinent to the question. $...
3
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1answer
72 views

What does it mean to identify structural shocks in macro models?

What does it mean to identify structural shocks in macro models? Sometimes, it seems to mean just disentangling VAR innovations into 'structural' shocks which may or may not have any economic ...
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1answer
34 views

Imports not used in the country, still counting in the GDP calculation?

When we calculating GDP we use the given formula $GDP = C + I + P + X - M$ Here $M$ means the imports. My question is: What if I am not currently using the imports. For example I might have by the ...
8
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2answers
3k views

Is the economy a zero-sum game?

Theoretically speaking, if all the Earth's inhabitants were to save money and invest, is it possible for everybody to get, let's say, a 4% yearly return for everyone? Is the economy a zero sum game (...
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1answer
47 views

Structural shocks in economic models are unobservable and country-specific?

Let's consider an exogenous oil price shock ($e_t$) as an example in the following equation $oil_t = \rho \; oil_{t-1} + e_t$, where $oil_t$ is one variable in a VAR system. We normally want to ...
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1answer
28 views

Government stimulus

Where does the money come from to pay Americans such a generous stimulus? What is the economic benefit? Is there something that is not visible to everyone else? If we give all this money to everybody ...
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1answer
55 views

Search and Matching model with 2 agents?

I would like to know if you know any model with Search and matching framework (Mortenses-Pisarides style) with 2 types of workers (like Ricardian and rule of thumb consumers for exemple) ? I would ...
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1answer
49 views

Jordi Gali Book First Edition Page 47 (need help for derivation)

The below image is from P.47 of Monetary Policy, Inflation, and the Business Cycle by Jordi Gali. My question is "how can we derive the equation (15). If (15) is a correct equation, my guess is ...
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5answers
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How does everyone not become poor over time?

Look at the whole world --the union of all goods and services and workers and customers. Everyone who is a customer is a worker somewhere (they had to get the money to be a customer somehow). But not ...
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0answers
38 views

What is the effect of currency depreciation on import prices?

In Macroeconomics: A European Perspective (3rd ed., Blanchard, Amighini and Giavazzi), when discussing the reason for differences in the GDP deflator and the HICP for the EU, it states the following ...
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1answer
154 views

What does taxes less subsidies mean?

What does 'taxes less subsidies' actually mean? It feels like it is grammatically incorrect. I have assumed it to just mean taxes minus subsidies.
3
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1answer
66 views

Cost of production plant

I'm struggling to find a macroeconomic index which embodies the cost to run an average production plan. My problem is that I wanted to divide the annual average cost per employee (which I already ...
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1answer
33 views

Advice on method for analyzing the effects of increase in minimum wage

As a hobbyist and generally curious person with a lot of free time at home, I was curious what would be a good method to analyze the effect of an increase in the minimum wage of a country if you only ...
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2answers
62 views

UBI - Raising the Poverty line

Imagine if a country starts to pay $1000/month to all citizens. Then my landlord knows that I can afford to pay a bit more rent from next month. So will my favorite ice-cream place, my barber and in ...
2
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1answer
40 views

How to interpret risk premium

I do not understand the notion risk premium. Let us suppose that John goes to the city by car, but he is thinking about not paying for the parking. If he is caught in the act he must pay the fine. How ...
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1answer
58 views

Aggregate Demand

Today in class, we learned about aggregate demand. However, while I understand the shifters, I am an unable to understand what actual movement along the curve represents. Why doesn't a change in price ...
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3answers
6k views

Is 'full employment' synonymous with 'the natural rate of unemployment'?

Is the phrase 'full employment' synonymous with the phrase 'the natural rate of unemployment'? Parkin, et al. (2010) seem to use these two terms interchangably in chapter 20, but looking up these two ...
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0answers
16 views

About marginal cost setting on Jordi Gali's work

I'm studying Gali's work with the paper(or book?) which is "Jordi Gali, Monetary policy inflation and the business cycle_An introduction to the new keynesian framework(2015)" and wonder one ...
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1answer
30 views

New Keynesian IS curve: question about time dependence

A simple version of the new-Keynesian IS cuve is given as follows: $$ \ln Y_{t} =\ln Y_{t+1} -\frac{1}{\theta} r_t. $$ Here $r_t$ is the real interest rate and $1/\theta$ is the cross elasticity of ...

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