# 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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### Romer-Romer shocks in a monetary VAR

I'm trying to better understand implementing Romer-&-Romer monetary shocks in a monetary (S)VAR. If I start with a standard VAR of prices, output and the Federal funds rate, I can do a Cholesky ...
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### Savings "identically" equal to investment?

So there's a multiple choice question that says, savings varies positively with the level of income and savings is IDENTICALLY equal to investment. Find the slope of the IS curve. Options are : ...
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### Cake eating problem with income over time

I'm trying to implement a solution to a dynamic programmig exercise (cake eating) in Python. Consider the following problem. An individual lives for 20 periods. In the first 15 periods he receives an ...
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### Difference in difference on election impact on asset prices?

I am looking to research the impact of Brexit on the FTSE100 index. FTSE100 is an stock index of the 100 largest UK companies. The UK also has FTSE250 which is an index of 250 mid-cap companies (not ...
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### Economics as non zero sum game [closed]

If economics is not a zero sum game then why its difficult to earn money.I mean just increase the size of the cake and distribute it.
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### How to derive Fisher's equation?

Guys help me derive Fisher's equation or suggest references that have the derivation. I am looking for this relation: (1+i)=(1+r)(1+π)
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### Capital Inflows and Outflows in the Long Run

What happens to capital inflows and outflows in the long run?
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### What's the best measure of liquidity or money inside the market?

What's the best measure of liquidity or money inside the market? Often times, the Federal Reserve prints money or buy stocks or give emergency loans, and all these actions cause money to increase in ...
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### Capital income growth equals labor income growth along the balanced growth path

I am trying to show that when technological and population growths are (non-negative) constants, the rate of growth of capital income and labor income in the steady state will be equal. Assume that ...
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### Parameter in calibration are not sufficient for pruposed Model. Where is the lacking data coming from?

The paper „social security reforms, capital accumulation and welfare: A notional defined contribution system vs a modified payg system“ by Lin, li Presents a model for analyzing the impact of ...
1 vote
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### Definition of wage in the Solow Model with Technological Progress

Consider the Solow model with technological progress. Suppose the production function is given by $F(K(t),A(t)L(t))$. The variables used are standard. Questions: Assuming the output price is ...
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### How can I find whatever publicly available data sources exist for U.S. macroeconomic nowcasting at frequencies higher than quarterly?

I am pretty familiar with the usual U.S. Federal macroeconomic data sets, the NIPAs, the Fed's Flow of Funds accounts, and my favorite, the integrated macroeconomic accounts. Most of these come out at ...
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### Sustained growth in Ramsey model

It is known that in the classical Solow model that if we use CES production function instead of Cobb Douglas function, it is possible to have sustained growth if the substitutability is larger than 1. ...
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### Labor augmenting technological progess and its relevance

Can you provide a proof showing why balanced growth requires technological change to be labor-augmenting in the neoclassical growth model?
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### Global Asymptotic Stability in the Solow Model - Rigorous proof

Consider the (simplified) Solow equation, which is a first-order non-linear difference equation: $$k_{t+1} = sf(k_t) + (1-\delta)k_t$$ where $s$ and $\delta$ are two ...
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### A question about a derivation process in gali (2015), chapter 2, equation 20

In chapter 2 of Gali's book, he uses the equation (25): and combine the "driving processes for technology and preference parameters", inflation can be written as : I wonder how this new ...
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### What exactly is an exogenous stationary distribution?

All jobs are identical except for their wages, and wages are given by an exogenous stationary distribution of $F (w )$ with finite (bounded) support $\mathbb W$. This is from page 6 of https://ocw....
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### Definition of economics

What is the accepted definition of economics? I've read basically two versions, one that defines it as the study of scarcity and the other as the study of how to coordinate human desires given ...
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### Why was the September 2022 United Kingdom mini-budget so badly received, but not other similar budgets?

I'm not sure if this is an economics question or a political one. I'm posting it here because I'm looking for an economics-based answer. In September 2022, UK Prime Minister Liz Truss produced a ...
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### IS Curve and AD Relation

Relation between Aggregate demand and Investment saving What happens to the Investment saving curve when Aggregate demand curve is steeply sloped? I know that with a higher Marginal propensity to ...
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### What are the root causes of inflation, other than cost-pull/push inflation? [duplicate]

What I have found so far: Apparently, increases in regulatory costs lead to reduced competition an therefore to inflation. However, in normal economic circumstances, as long as competition exists, ...
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### Proving the Global stability in the Solow Swan Model

Consider a simplified version of the Solow-Swan model in discrete time, where technology is normalized to one and the population size is constant. The Solow equation is given by ...
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### What is the frisch elasticity and its meaning?

I understand that Frisch elasticity is the "elasticity of hours worked to the wage rate". I wonder why then we use this specific naming only for this? Is this to make it clear what this ...
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### Should younger people earn more then older ones?

I think in all societies it is usually the case that when you start a job you are usually paid less than a person in the same position who is about to retire. I'm not an economist by any means, but I ...
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### Why are sticky wages an explanation for an upward sloping SRAS curve?

I often see that the theory of sticky wages is cited as an explanation for an upward sloping short run aggregate supply curve. I understand that if aggregate demand shifts to the left, there will be ...
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### Present Value of Profits Earned From the Discovery of New Ideas in the Romer Model

Page 127-128 of Romer's Advanced Macroeconomics states that Equation (3.39) tells us that the profits at t are $\left[\frac{(1-\phi)}{\phi}\right]\left[\frac{(\bar{L}-L_{A})w(t)}{A(t)}\right]$. These ...
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### Question on productivity cycles

What is “productivity cycles”? Is this different from business cycles? And suggest papers on the productivity cycles as both theoretical and empirical studies? I will be happy if you inform me ...
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### Can GDP ever be negative?

Imagine that in an economy we only produced a toy and that cost us 10 dollars. We don’t sell this toy in year 1. Then this goes under Investment as +10 and GDP is +10. But say the only thing we do in ...
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### Have governments ever defaulted on its public domestic debt or treasury bonds?

Recently, some countries have experienced hyperinflation such as Lebanon, Zimbabwe, and Venezuela. Has there ever been a time when a government defaulted on its treasure bond payments due to a country'...
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### How to Compute the ln of the GDP with only the growth rates

I have an exercise where I was only given the growth rates of an economy for every year, starting in 1985 and ending in 2023. Using only this data, I was asked to compute the ln of the GDP for 1984. ...
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### Logic behind uncovered interest rate parity?

So I am having trouble understanding the UIP equilibrium condition. Namely, according to UIP, when the home country has a higher interest rate than the foreign country, its currency will depreciate ...
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I am hoping for a simple intuition for why price stickiness induces indeterminacy of the interest rate, $i_t$, in the benchmark New Keynesian model. When prices are flexible, the natural rate is ...