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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19 views

Does anyone know how to find disposable income data? [duplicate]

I'm doing a macro project and I need to find disposable income data over a 25 year period. My professor said that this metric data is available directly on the World Bank website. I've searched ...
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30 views

How to Find Real Disposable Income for Iran?

I'm doing a project for my macro course, and I'm trying to find real disposable income for Iran over a 25 year period. In my course Disposable income, $Y_d = Y - T$, where $Y$ is output (income) and $...
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How to deal with misspecification of models in Macroeconomics?

I'm wondering what methods are used in economics, specially in macro, to deal with model misspecification. I've already searched the web, but I may be missing some methods. Therefore, I ask you for ...
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118 views

Could a “Japanese-style strike” work as it's supposed to? Under what conditions?

This is an urban legend, mostly believed in Spain and some countries in South America. The legend is based on the premise that their way to make a strike would be to work much more than usual in some ...
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1answer
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Would it be accurate to say that the economies of most of the countries are capitalistic?

What is the proportion of countries that are capitalistic? What is the proportion of the planet's population who live in such countries? How is this, (somewhat subjective?)
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The rationale for using a lagged variable to address endogeneity arising from simultaneous causation?

when there is simultaneous causation between dependent and independent variables often in papers we see a lagged variable being used in place of contemporaneous variable. For example, Clemens, ...
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Market Clearing with Dividend and Investment

In pure exchange GE models, a typical goods market clearing condition for good $n$ looks like: $$\sum\limits_{i=1}^Ic_n^i=\sum\limits_{i=1}^Ie_n^i.$$ Consider a model with production where firms can ...
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If an endogenous explanatory variable is serially correlated does it mean that its lags are also endogenous?

in panel data when examining economic growth determinants lags are often used to account for endogeneity of explanatory variables. However if the explanatory variable is serially correlated, does it ...
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What is the interpration of results if adding or subtracting a control variable effects the significance of explanotary variables?

I am conducting some regressions on economic growth determinants and I am disillusioned. Essentially by choosing what groups of variable to regress I can get the desired significance. What does this ...
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how Ballassa Samuelson affects real exchange rate? [duplicate]

I get confused. How "Balassa Samuelson effect" influences real exchange rate?
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39 views

Meaning of assumptions regarding continuum of agents in economics models

I am reading an economics paper which contains a model with households and banks. In the model, banks are owned by households. The authors make this assumption when they discuss households (section 2....
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90 views

rental cost of capital

I am estimating time series for rental price of capital using Hall-Jorgenson method: $$r=\frac{P_k}{P}(i-inf+\delta)$$ here, $r$ is the rental cost of capital, $P_k$ is the price of capital goods (...
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What are the income and substitution effects of deficit-financed government stimulus in comparison to marginal rate tax cuts?

What are the income and substitution effects of taxation in a simple way ?
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Proving the existence of a steady state

I am trying to prove the existence of at least one stable steady state in a situation where I am given properties of the production function but not an explicit functional form. I have the following (...
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US Real GDP Growth Rate

I am interested in finding the quarterly real GDP growth rate of US and have found the following two measures from IMF International Financial Statistics: Which one should I choose (Dark Green or ...
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1answer
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Each short-run average cost curve

Each short-run average cost curve A. never touches the long-run curve B. always crosses the long-run curve C. always lies above all the points on the long-run curve D. coincides with the long-run ...
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Is it reasonable, in panel data, to use past values of explanatory variables as instruments to deal with simultaneous causality?

I am trying to examine the determinants of economic growth, essentially regressing a number of variables upon economic growth. I face a problem that there is likely simultaneous causality between many ...
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196 views

Is poverty a mathematical necessity?

I recently saw a meme, and the content was something like: In the near future, a meteor will 'hit' the Earth, and there will be gold rain, and hence everyone will be rich The ridiculous thing ...
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Is it possible, that the global warming will affect the growth of the economy?

I am wondering if, in the face of the global warming, the long-term passive investments into ETFs are still a good idea. Right know we benefit from the growth of the economy. I assume (maybe that's ...
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Why has gold dropped during the same week as Deutches Bank faces great difficulties

I chose the phrasing "great difficulties" to be polite. The "capital release unit" seems to be a bit of a desperate action from the bank, coupled with further complications involving bad press made ...
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1answer
129 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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176 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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1answer
50 views

How to calculate the spending multiplier from a given set of equations?

So i have this question: I go along and get Then i need to calculate the effect on the optimal output is G increases by 80: And on the answer sheet it states that the spending multiplier is: From ...
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1answer
89 views

How much better off would the average person be if we took away enough money from the top 1% to make them no richer than the average person?

In my hypothetical situation, the USA population takes enough money away from the top 1% so that they are no richer than the average person. That money is then redistributed to the lower and middle ...
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Why did no US politician start the trade war a decade earlier with China or possibly the Globe if it is a good thing to do? [closed]

Why did no US politician start the trade war with China (or possibly the Globe) a decade earlier if it is a good thing to do? I am asking for a list of reasons for why not.
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How does real gdp affect the domestic currency?

When the domestic real gdp per capita increases then it has a negative effect on domestic currency (depreciation)? Why? Source: The real exchange rate of euro and Greek economic growth, Gregory T. ...
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What is a monetary policy shock?

I am trying to understand some basic stuff about New Keynesian models and monetary policy. Despite that almost every single paper on monetary policy talks about monetary policy shocks, I still don’t ...
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Does climate and resources explain nearly all variance in gdp

Is there any value to institutional explanations. Or is institutionalism made up.
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How to determine the cost of a good

Can the cost of any good be determined based on its ratio to a minimum wage? For instance, if 10 years ago, eggs cost \$2 / dozen and the minimum wage is \$10 / hr (eggs cost 20% of the minimum wage) ...
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1answer
25 views

Manipulating index numbers

I have a producer price index which is the composite of 9 various commodity prices including that of coal. I want to remove the effects of coal price changes from the original index. I have data on ...
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1answer
43 views

Do patents foster innovation?

I'm looking for a good meta analysis which answers the question if patents are generally beneficial to economy or not. Some papers I've read claim they are indispensable, other say it depends on the ...
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3answers
86 views

How can a consumer economy possibly be sustainable?

Some consumer economies In 2017, the United States household final consumption expenditure (HFCE) is $13t, which is 68% of its GDP. In 2017, the United Kingdom has a HFCE of 1.7t, which is 66% of its ...
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24 views

Data of Inflation and unemployment for a Panel Data

I am looking for data of Inflation and unemployment to run a Panel Data of a Philips Curve. Can anybody help me with some website/source that I can find data like these? In my mind I would need too ...
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Confused about what is meant by adjusting for inflation

In class, we have been using this calculator in order to see the effects of inflation. https://www.rbnz.govt.nz/monetary-policy/inflation-calculator I am slightly confused by what is meant by "...
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Diligent, wise bona fide voters

Can a diligent, wise and bona fide voter choose procyclical policies? I am asking if there is any explanation. In diligent and wise I mean people who appreciate the Ponzi scheme, want to balance ...
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A decrease in the cost of borrowing (interest rate) will case

A decrease in the cost of borrowing (interest rate) will case a) the demand for loanable funds to increase. b) the supply of loanable funds to decrease. c) both A and B. d) either A or B, but not both....
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Empirical research into sectoral comovement

I'm looking for some empirical studies into sectoral comovement. In particular, I'm interested in how manufacturing and services industries move together both in the long run and over the course of a ...
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2answers
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Why do non-binding price ceilings have no effect?

My question seems trivial but I have a particular issue I don't understand. If there's a price ceiling above the price equilibrium, the customers can still use the ceiling as leverage when negotiating,...
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Why the historically narrow asset class purchases from QE

Let's begin by mapping out some context by assuming the following goals of implementing QE: prevent dire systemic liquidity concerns reach inflation targets manage expectations in the private sector ...
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Production technology and efficiency

I have been practicing some questions on production function and efficiency and I came across the following questions. For question 1 what I did is, the efficiency of firm A in q1 = production of ...
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1answer
20 views

Leveraged Return on Investment

A general return on investment (ROI) formula is: \begin{equation} \text{ROI}=\frac{\text{Net Profit}}{\text{Total Investment}}. \end{equation} But if you think about an investment that requires some ...
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49 views

Gross interest rate ($R$) v. Net interest rate ($R-1$)

I am reading a macro-finance article that deals with asset financing. While it defines the gross interest rate to be $R$, it defines the net interest rate to be $r\equiv R-1$. In equilibrium, the ...
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Nominal and real government expenditure

I just need to know that how to make a data series of real government expenditures using nominal government expenditure data series.
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78 views

Why do prices go up when the central bank increases money supply?

From my understanding, when the money supply curve shifts to the right, interest rates go down, it follows that the price level decreases and the prices should go down? Thanks in advance.
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How can capitalism be improved? [closed]

Many people want to try socialism because of valid criticisms of capitalism. So, are there any good ideas on improving the problems of capitalism before we go down the path of socialism?
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57 views

How should the government react to 50% of the population being wiped out?

In Avengers Infinity Wars the villain snaps his fingers and wipes out 50% of all living creatures. His rationale is that it will save people from starvation and collapse due to resource exhaustion in ...
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In what kind of economic environment would the cliche of “keeping money under the mattress” be warranted?

I'm trying to apply (ideally empirical-backed) economic theory to an age-old cliche. We must be very articulate about the assumptions, because if it's a total collapse of the dollar, then that ...
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Would a perishable currency work in a financial crisis today?

I read about perishable currencies in the following article Now my question is if there have been any studies on this and if this may work in modern financial markets?
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Why doesn't the trade balance equation take into account the value of products sold by the U.S.?

$$NX ≡ (S-I) + (T-G)$$ Read this as “the trade balance (net exports) is identical to the sum of net savings (savings minus investment) and the government’s budget surplus or deficit (taxes minus ...
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Purchasing power of currency abroad

Say you have two countries A and B. Suppose we have a situation where country A's currency can purchase much more in country B than the other way round. What causes this phenomenen? Is it possible ...

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