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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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2answers
213 views

Universal Basic Income - Menial Tasks

The Universal Basic Income scenario seems to be one where people are free to cultivate their passions. From what I could gather, the main argument for this to be the best case scenario goes something ...
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1answer
121 views

Savings = investment with private money creation?

I've been reading some introductory macroeconomics and I'm struggling to understand one of the basic accounting identities. In a closed economy with a fixed money supply it's clear that every dollar ...
3
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1answer
155 views

Abenomics and the Japanese VAT tax hike

Abenomics seems to me like a straightforward and modern plan of economic reflation through monetary easing and some attempt at structural reform. While it's still early, it looks like many of the ...
3
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1answer
143 views

How do I verify Philips curve empirically for recent years?

I wanted to verify the relationship between inflation and unemployment empirically, so I took data from the World Bank and used excel to correlate them. I got a very, very bad correlation between ...
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2answers
3k views

What is the difference between quarterly GDP and annual GDP?

I didn't understand how quarterly GDP is calculated. If GDP means Gross Domestic Product in a year, then what does quarterly GDP mean Gross Domestic Product in a quarter? OR it is multiplied by $4$ to ...
2
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1answer
56 views

Why does changing the value a currency help/hurt exports if sellers can just inflate/deflate prices to match the change?

1) I make widgets and sell them for $10. 2) The government reduces the value of my currency by 10%. 3) The market value of my widgets is the same as before, so I raise my prices to $11 and I can ...
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1answer
216 views

In classical macroeconomics, why Labor supply responds to real wages and not money wages?

real wages = money wages/price(P). what are the assumptions here? why labor doesn't respond to money wages ?
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2answers
119 views

What separates “rich” developing nations from “poor” developed nations?

What separates relatively high income developing nations, such as Argentina, from relatively low income developed nations, such as Portugal? If you look at things like HDI numbers, Argentina and ...
2
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1answer
50 views

What metrics can be used to distinguish between capitalistic and socialistic economies?

What macroeconomic indicators are meaningful to distinguish whether a country leans towards socialism or capitalism (and where to find such data, specifically for european countries)?
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1answer
386 views

Testing the long run phillips curve / Contradicting empirical results?

I've been working with some historical macroeconomic data of the Canadian economy and am having difficulty empirically testing the Phillips curve long run and short run versions. I got the data from ...
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0answers
60 views

Cyclicality of Markups

I'm looking for scholarly articles or summaries on the subject of markups. More importantly, for empirical evidence whether they're pro- or counter cyclical, and on theoretical papers on their ...
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2answers
50 views

Are Investments positively or negatively correlated with interest rate

Having just begun self-studying economics, I apologise if this question is too simple. Do investments increase or decrease with increased interest rate? According to the small, closed economy model (...
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0answers
25 views

Historically has the “decoupling” of world trade from GDP not lead to (or deepened) a recession?

The ECB speaks (somewhat euphemistically, in my opinion) of a "decoupling" of world trade from "activity" (i.e. GDP) in Q1 2019: Historically, has it been the case that such a "decoupling" can last, ...
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1answer
740 views

How should I adjust data for both inflation and foreign exchange rate?

I’m not sure if this is typically done, but suppose my data point is in 2013 JPY and I want to express in 2016 USD. Do I apply CPI to express data in 2016 JPY, and then apply exchange rate to 2016 USD?...
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1answer
129 views

Why isn't National Net Worth of a country used to calculate its economic power, as opposed to GDP?

From Wikipedia: GDP Gross domestic product (GDP) is a monetary measure of the market value of all final goods and services produced in a period (quarterly or yearly). National net wealth ...
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1answer
42 views

Why is price dispersion from Inflation called relative price “distortion”?

I know what relative price is and that it fluctuates more frequently in times of Inflation. But what I don’t understand is why it is called “distortion” when relative price dispersion is caused by ...
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0answers
431 views

How price and quantity of ice cream sold changes when the price of yogurt reduces?

I am a newbie at economics and would appreciate help from the community. Question Use the model of supply and demand to explain how a fall in the price of frozen yogurt would affect the price of ...
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1answer
34 views

Other factors that affect the supply of money

I've read that it is not a hard-and-fast rule that the overall money stock growth rate speeds up in response to an accelerated expansion of the monetary base and a growing money multiplier. If this is ...
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2answers
124 views

Impact on interest rates of massive government spending

At the last State of the Union address, the President of the United States has reaffirmed his intentions to undertake a massive 1.5 trillion dollar infrastructure spending project over the coming ...
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1answer
155 views

Taylor rule and optimal monetary policy

In a New Keynesian model, under the assumption of sticky prices, we need to express the monetary policy through an equation in order to close the model made of New-Keynesian Phillips curve and dynamic ...
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2answers
174 views

Retaliating against a foreign country's import tariffs

When Trump imposes tariffs on imports from China, he is hurting American consumers who won't be able to take advantage of cheap Chinese goods. If China was to retaliate by imposing tariffs on imports ...
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1answer
731 views

Exchange rate and domestic money supply

It seems an obvious fact (not explained by authors but stated) that when a Central Bank purchases foreign currency (to stabilise its own), the domestic money supply goes up. It seems to me that the ...
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1answer
90 views

What are some applications of Real Analysis in Graduate Economics?

I am interested as to what areas of masters/PhD coursework that learning the fundamentals of Real Analysis would be beneficial for? I am aware of its applications in Econometrics proofs and analysis, ...
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22 views

When Balassa-Samuelson effect increases, real exchange rate depreciate?

I researched several literatures related with Balassa-Samuelson effect and according to literatures, as Balassa samuelson effect increases, real exchange rate appreciates. However according to the ...
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1answer
45 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 ...
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0answers
30 views

how Ballassa Samuelson affects real exchange rate? [duplicate]

I get confused. How "Balassa Samuelson effect" influences real exchange rate?
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1answer
81 views

why pound is more overvalued than euro and usd?

Why British pound is more overvalued than euro and usd, even though these currencies(euro and usd dollar) are more traded than British pound?
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2answers
33 views

Question on Central bank loss function interpretation

How do you interpret this central bank’s loss function: $$L(\hat x, \pi)=\alpha \hat{x}^2+(\pi-\pi^T)^2$$ where $\alpha >0$ and $\hat x$ is output gap. Phillips curve is $\pi = \theta \hat{x}+\...
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1answer
76 views

Solve for the steady state with CRS Cobb-Douglas, problem with the system of equations

There is one agent with utility function given by: \begin{equation} U(c,l) = \frac{c^{1-\sigma}}{1-\sigma}-\frac{l^{1+\gamma}}{1+\gamma}\tag{1} \end{equation} With budget constraint: \begin{...
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2answers
52 views

when a=0, would economy accumulate more physical capital? Why?

Utility function is $U(c_t,l_t)=(1-a)ln(c_t)+aln(l_t)$ $l_t$ is leasure time $c_t$ is consumption Production function is $y_t=k_t^e(1-l_t)^{1-e}$ $k_{t+1}=i_t+(1-\delta )k_t$ where k is ...
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1answer
50 views

The difference between profit and earning something

Suppose I search some elderly people who are in need of domestic care. I find 100 of them and them to pay me 15 dollars per hour. Then I find 100 people who will do the job for 10 dollars per hour. ...