Questions tagged [nonexpert]

For questions that are not about formal economic or econometric models and techniques, their implementations using programs and languages or do not include references to, are not about data standards, or are not based on academic sources.

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23 views

Why do oil-rich countries need expats?

In particular, why did/do the smaller states in the GCC need expats in their country? Ignoring the history of the country prior to oil discovery (which can be approximated for many of the smaller GCC ...
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2answers
64 views

Would it even be possible for m2 to remain stable under positive interest rates?

Let's say bank A has 1 of assets and 10% reserve requirements. It lends to bank B 9 Then they lend back and forth so they both have 50 of assets and liabilities (or whatever they can). Then those ...
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48 views

marginal utility and Marginal rate of substitution

While studying for my microeconomics class, I realized that I could not fully understand the meanings of Marginal utilities and marginal rate of substitution. Can anyone explain to me the difference ...
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15 views

Can the Law of supply and demand be derived from the Subjective Theory of Value using Agent-based modeling? [closed]

I was tinking about the Law of Supply and Demand and Subjective Theory of Value and I have the intuition that the first can be derived from the second using agent-based modeling. Is this true? Also I ...
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44 views

What is the difference between "cluster analysis" and "discriminant analysis"

From reading paper of Clark-Murphy, 2010, I saw the authors used two methods: "cluster analysis"(CA) and "discriminant analysis" (DA) I found a great source of explanation here. ...
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12 views

What are "low predictability" and "poor feedback" properties of stock investment?

Wood, 2010 meantioned that Investing in stocks is a difficult task, with low predictability and poor feedback It seems that investing in stocks is a difficult task because of "low ...
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4 views

Why and how would shareholders pay fines for a company? [migrated]

Recently I read an article on a PG&E settlement which stated that PG&E shareholders would pay a $40 million fine and spend another ...
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1answer
51 views

Why would a country ever want high interest rates?

The way I understand it, the government of a country can do a lot to change the interest rate in their country. Low interest rates encourage taking out loans and spending, thus boosting the economy, ...
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16 views

How to clarify "Predatory trading" process?

Brunnermeier, 2005 studied the "predatory trading" This paper studies predatory trading, trading that induces and/or exploits the need of other investors to reduce their positions. We show ...
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1answer
34 views

Why we say "active investing puzzle" while we already know the reason?

Han,2021 describe active investing puzzle as: Notably, individual investors trade actively and have invested in active investment funds for decades, and they thereby have on average underperformed ...
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27 views

Asking for "impersonal market" definition

By reading a paper of Han,2021, they wrote In most investment models, the influence of individual choices on others is mediated by price or by quantities traded in impersonal markets I do not fully ...
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2answers
43 views

Why is nominal GDP deflated to get real GDP?

I am confused at the explanation below which explains why nominal GDP must be deflated to get real GDP. I thought the GDP deflator would decrease if prices are declining, so how does this result in ...
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1answer
97 views

How does foreign aid money help another country develop?

How does fiat currency help a country's economic growth? For example, if a certain country such as the U.S or Brazil gives 1billion dollars to a developing country like Angola or Congo, how does that ...
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34 views

Debt cycle theory of Ray Dalio

I recently started reading Ray Dalio's book regarding BIG DEBT CRISES. He compared there, economy to the monopoly board game. There is something I don't quite follow in this analogy. If you ...
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1answer
32 views

Can economic models predict China overtaking the United States?

I recently read an article about China's economic progress: Chinese economy to overtake US 'by 2028' due to Covid Can models and simulations based on economic data predict when China's economy will ...
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3answers
64 views

When do the sign and magnitude of coefficient of variable of interest matter if it is insignificant?

I am wondering when the sign and magnitude of coefficients of a variable of interest matter if it is statistically insignificant. Normally, I am concerning a coefficient of variable if it is ...
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31 views

Can an increase in demand indirectly lead to a decrease in average price due to economies of scale?

Let's say firm A produces a very niche product, that requires them to handcraft each product, and because of extremely expensive and skilled labor the production costs are extremely high. Firm A has a ...
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14 views

Dinamic economics, differential equiations [duplicate]

I'm investing for models of system of differential equations, that can be applied in economics. I have to make an analysis of the model, for an exposition. Now I'm trying to choose a model to present, ...
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12 views

Model economics with diffential equations [duplicate]

I'm looking for suggestions of models of system of differential equations applied in economics or maybe in another area of interes. I have to make an analysis of a model, now I'm in the process of ...
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0answers
11 views

What is the compositional effect in panel data?

The definition of compositional effect is The term “compositional effects” is used here to refer to a range of observations about how using group averages can paint a misleading picture about how ...
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1answer
17 views

the share of the labor force in GDP, including wages and transfers to social protection, %

Why is this indicator (the share of the labor force in GDP, including wages and transfers to social protection, %) used as an indicator that indicates the level of inequality in society?
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1answer
40 views

The Amsterdam stock exchange market

The Dutch East India Company (founded in 1602) was the first joint-stock company to get a fixed capital stock and as a result, continuous trade in company stock occurred on the Amsterdam Exchange. I ...
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2answers
86 views

Do students for economics study theory about no-money-economies and about no-interest-economies (ancient or futuristic)?

Do students for economics study theory about no-money-economies and about no-interest-economies (interest-free-economies), may these be ancient or futuristic? Are these terms are even being introduced ...
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1answer
161 views

System of differential equations in economics and areas of interest

More than a question, I'm looking for suggestions of models of system of differential equations applied in economics or maybe in another area of interes. I have a research homework and I have to make ...
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2answers
104 views

Is Fiat Money Ultimately Tax Based?

First, I am not an economist, so seeking general "good enough" answers. Since Nixon went off the gold standard the U.S. dollar has been a fiat currency backed by federal debt. While I ...
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24 views

Have we ever used the word "outcome" for regressors?

From my understanding, we normally use the word "outcome" for dependent variables( aka regressand), but today, when I look at this document it seems to me that they use "outcome" ...
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1answer
35 views

What is the universal benchmark for excluding a variable based on correlation?

Normally in a research, we exclude one of two variables that they are correlated. I am wondering what is the universal benchmark (better if having reference) to exclude one of them. Conventional ...
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34 views

What is the name of using lag explanatory variable in regressing on dependent variable?

In general, we can run lag of response variable or lag of explanatory variable on regressand. The former (running lag of response variable on response variable is called auto-correlation), can I ask ...
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2answers
50 views

What is the difference between "linear" and "piecewise linear" and "exponential way"?

When the impact of laws diminish over time, it may dissipate by "linear", "piecewise linear" or "exponential way". It is easy to understand that linear mean that the the ...
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1answer
26 views

What words should we normally use for x-axis in a economic or finance research paper?

What words should we normally use for x-axis in a economic or finance research paper? For example, in this case (I draw the graph from my own reseach) In my case, I use: That blue dots mainly lie ...
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2answers
36 views

Create currency with truly fixed exchange rate

Currency fluctuates depending on supply and demand In fixed exchange rate, any central banks could ties their currency to another country's currency or Gold price. Which, basically, still fluctuates ...
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1answer
37 views

What are the confidence interval alpha in regression? Why 0.1 is looser than 0.01?

It is a newbie question but I am not sure that I fully understand the confidence intervals. Let's use OLS regression as an example. My understanding is: If alpha=0.05, so it means that OLS regression ...
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2answers
2k views

What are the causes of negative real interest rates?

I am familiar with the real interest rates equation which states that real interest rate = nominal interest rate - expected inflation rate. What I am failing to fully grasp, however, is why would ...
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1answer
21 views

Asking for reference for the relationship between vaccine openness and education levels ( beyond COVID-19)

I am looking for a reference about the link between vaccine openness and education levels beyond COVID-19. I found a paper mentioned the link between vaccine openness and education but stick with ...
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2answers
72 views

Can the Federal Reserve permanently decrease money supply?

As far as I understand it, the primary way the Federal Reserve decreases the money supply is by selling bonds–the entities buying these bonds give up their cash for them and thus M0 is decreased. ...
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0answers
47 views

What is a robust estimator?

From this discussion of 1muflon1, I see the meaning of efficient and consistent estimator regarding to the asymptotic properties. I am wondering what is a robust estimator?
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20 views

Is it acceptable to calculate monthly return by averaging daily return?

I normally see people calculate monthly return based on daily returns by using cumulative return as this link. I am wondering if there is any chance to calculate monthly return by simply averaging ...
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1answer
56 views

What are the asymptotic properties of an estimator?

Normally, when we talk about the asymptotic estimator, we talk about the efficiency and consistency of this estimator. I am wondering whether efficiency is AIC and consistency is BIC mentioned in this ...
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1answer
28 views

Why is having a big corporation keep its money in foreign countries a bad thing in the public's eye?

I have been trying to dig deeper into corporate tax evasion, and how it works, to really determine if they're doing something bad or what. I don't know much about economics or politics, but I hear ...
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1answer
35 views

How to explain the meaning of the coefficient of interest of Difference-in-Differences?

Considering a Difference-in-Differences (DiD) equation with a dummy variable: $$ y_i = \alpha + \beta D_i + Xit + \varepsilon_i. $$ While $$Xit$$ is a set of covariates. Let's say the DiD here has the ...
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1answer
20 views

Whether coefficient of a dummy variable can receive the value higher than 1 and using log for per-million variable?

Today when I run a regression (in specific Difference-in-Differences but I think it does not matter here). My outcome variable is a ratio (lower than 1 million, it is about a number of people per ...
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3answers
90 views

Why do banks need to borrow money (i.e. bond issuance)?

When a bank gives out a loan, a simultaneous liability and asset is created on their balance sheet, and 'external' funding doesn't fit into this picture... so why do they need to borrow money?
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2answers
182 views

What is the difference between finite and infinite samples?

Today I faced a term "finite samples" in reading Borusyak (2021)'s work: We conclude the section by providing simulation evidence that the efficiency gains from using our estimator are ...
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1answer
28 views

Risk seeking investors: Do they benefit from return at all?

Starring on the indifference curves for different types of risk preferences I ask myself why the risk seeking investor would be indifferent between an investment on the far left of his indifference ...
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1answer
28 views

What does "unrestricted treatment effect heterogeneity" mean?

Borusyak, 2021 has a sentence We show that this estimator takes a particularly transparent form under unrestricted treatment effect heterogeneity, while our construction also yields efficiency when ...
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1answer
20 views

What is "panel-type specifications" more general than "two-way fixed effects"?

Borusyak, 2021 has a sentence While our baseline setting is for panel data with two-way fixed effects, we show how our formal results extend naturally in a number of ways. We allow for more general ...
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1answer
212 views

What do "underidentification" and "point-identified" mean in econometrics?

Borusyak, 2021 has a sentence First, we note that failing to rule out anticipation effects in “fully-dynamic” specifications (with all leads and lags of treatment included) leads to an ...
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1answer
93 views

Money transfers from A to B - in what proportions

I have been thinking about how money is kept moving, being transferred from A to B. And when I say A to B I don't just mean purchasing finished goods, I mean absolutely any transfer for any reason. So ...
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1answer
30 views

Interaction of redistributive taxes, monetary policy and the growth rate

While studying macroeconomics, interaction with taxes are not seen to importantly. I am though interested in an interaction with redistributive taxes (such as the income or the inheritance tax rate), ...
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4answers
177 views

How could real house prices tend to rise in the long-term?

It makes sense that house prices increase above the risk-free rate due to their risky nature and historical evidence and conventional wisdom seems to back up the idea that real house prices tend to ...

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