# All Questions

7,512 questions
28 views

### Can debt to GDP ratio be reduced transfering debt to local autorities?

It is my understanding that not only government but also local authorities issue bonds. This answer on Money and Finance Stack Exchange suggests that such debts are not accounted in the computation of ...
51 views

### Why are Big Macs supposed to cost the same around the world?

The Big Mac index is frequently mentioned in media, but I could never understand how it makes any sense. According to Wiki: The Big Mac Index is published by The Economist as an informal way of ...
24 views

### Does the Federal Reserve have bank accounts for banks?

Banks are constantly transferring electronic dollars to each other. There must be an entity that tracks how many digital dollars each bank has. Does the Federal Reserve have "accounts" for banks? In ...
16 views

### How much extra Riccardian Rent can be collected by raising the land value tax from 1% to 100%?

Henry George proved that landowners are allowed to extract Rent from the land they own. He, and Georgists in general, argue that the government should levy a 100% land value tax to collect all of this ...
13 views

### Is debt servicing in the structural or cyclical budget balance?

Are the interest payments on government debt to be considered in the structural or the cyclical budget balance? I think, since it's independent on the state of the economy, then they should go to the ...
55 views

### A question about the exchange economy

The question I am given is the following: Consider an economy that has only three goods, mineral water, orange juice, and wine available in ﬁxed amounts, and three agents, A, B and C. So in this ...
20 views

### Effect of changing MC on monopolists' maximised profits

Let a monopolist have constant MC = c, with no fixed costs. If $p(c)$ and $q(c)$ are the profit maximising price and output as a function of MC and the market demand schedule is given by $q = D(p)$, ...
28 views

### How to treat different frequencies of a time series data?

I have annual GDP, annual CPI, monthly exchange rate, and monthly export data. I would like to go for estimation being monthly stock return as the dependent variable. What are the methods to treat the ...
24 views

### Fixed Effects Estimation and Inconsistency

Consider estimation of the following population regression function: $G{Y_{it}} = {\beta _0} + {\beta _1}IN{F_{it}} + {\beta _2}DE{M_i} + {\beta _3}POI{L_t} + {\varepsilon _{it}}$ Where: $GY_{it}$ = ...
32 views

### Why did it take so much QE by the ECB to raise the Eurozone inflation to 2%?

From 2015 to 2018 the ECB increased the money supply by around 20% (around 6% y/y), with a GDP increase rate under 1%. Yet the inflation rate remained under 2%. A back-of-the-envelope calculation ...
23 views

### Matlab code for simple RBC model

I am looking for sample matlab code to solve a simple RBC model $\max_{c_t, k_{t+1}} \hspace{1cm}$ s.t $c_t + k_{t+1} = A_t k_t^\alpha + (1-\delta) k_t$ where $A_t = A_{t-1}^\rho$. If by any chance,...
29 views

### How to convert an historic value denoted in foreign currency to a modern value in local currency?

I want to convert GBP in 1968 to USD in 2018, in order to "translate" an amount paid by an individual in Britain fifty years ago. My intention is that an American reader today will be able to better ...
12 views

### Money, Product and Bond Markets in Equilibrium

Why are we assured that when the money and product markets are in equilibrium, the bond market will also be in equilibrium?
14 views

### The U.S. government's red-lines in regulating the banking industry and preserving the health of market competition

The presupposition that pursuing one's interest will eventually result in greater good for the whole society rest upon the underlying assumption that bad behaviors will eventually receive punishment, ...
24 views

### Sample code (Python) Solve deterministic classical growth model

I am looking for a sample code solving the deterministic classical growth model by value function iteration. I tried to do it on Matlab, and it takes so much time to converge. So, I want to try do it ...
5 views

### How to calculate CAPM for number of industry portfolios?

Hi I calculated Alpha and Beta and R squared for number of Industry Portfolios. When I was said to Estimate the CAPM for each industry portfolio, Is it just finding the Alpha and Beta or is there ...
26 views

### Is there a word/phrase for a situation where an actor creates more downside risk for society than they can suffer as an individual?

For instance, suppose $A$'s utility is bounded within $[-1,1]$. A can flip a coin, and the aggregate utility of the possible results are: \begin{align} U(\text{heads}) &= 0 \\ U(\text{tails}) &...
12 views

### Asset - Risk sharing

I am doing a macro problem, and I am really confused how can the financial market can be clear in this case. "The economy consists of a continuum of agent.Each agent i is endowed with one unit of ...
16 views

### When only half of the independent variables are non stationary, does it make sense to run a cointegration test?

I have the following regression equation (panel data): $Y = f(X_1, X_2, X_3, X_4)$ After obtaining CIPS and CADF statistics, $X_1$ results to be stationary for both intercept and intercept + trend, ...
25 views

### Evaluate empirical performance of Euler equation

I am interested in the empirical performance of Euler equation for capital: $\beta E_t [ (1+ f'(k_t) - \delta) u'(c_{t+1})/u'(c_t)] =1$ Does anyone have any reference (paper or lecturenote/ ...
51 views

### Brueckner's basic urban model, comparative statics

I was reading through Jan Brueckner's "Lectures on Urban Economics" (2011), which is a "rigorous, but non-technical" explanation of various topics in urban economics. It was supposed to be light ...
12 views

### Does the Fed grant free money to itself durring QE? [duplicate]

From my understanding of the credit theory of money, private banks credit newly created money to borrowers in exchange for an IOU from the borrower. Likewise, the Fed credits money to private banks ...
13 views

### What happens if there is increased government deficit spending but not increased money supply?

What happens to real GDP if the government deficit spending is increased, but the Federal Reserve doesn't expand the money supply? Would the effect on real GDP be the same as if the Federal Reserve ...
13 views

### Ex-dividend (Asset Pricing)

I am reading some lecture notes on asset pricing, and they use the term "ex-dividend" price of an asset. I googled and found that ex-dividend means the time between announcement and payment of a ...
32 views

### Why doesn't land value go to 0 when tax rate goes to 100%?

I'm looking at this equation here: $$y = \frac{ra}{r+x}$$ Where: $y$ = market value of land $r$ = real interest rate, set at 0.01 $a$ = land value, set at 1 $x$ = tax rate I don't really ...
28 views

### Is there any reliable data on what % of the UK population currently earn less than £17,300 annually?

According to the Living Wage Foundation the "real living wage" in the UK is £9 an hour Which assuming a 37 hour week & rounding to the nearest whole GBP amounts to £17,375 Formula used ((9*37)/...
35 views

### what is the marginal cost divided by the average cost

Marginal cost and average cost are both a u-curve. They cross in the competitive equilibrium. If we divide one by the other, is the ratio the degree of competition? Ratio is 1 in perfect competition....
18 views

### Where can I find the statistics of import crude oil to China?

Is there any website that shows statistics of import crude oil and commodities to China daily or monthly?
14 views

### What is the best method to predict Brent oil price? [duplicate]

I like to know what factors are most important for crude oil price and how can we do a good prediction about oil price in future?
43 views

### Reference request: Gender wage gap / Minority wage gap

Disclaimer: I am neither a social scientist nor an economist. I hope the ESE is the right place to ask this question. Disclaimer 2: I do not intend to spark an ideologically driven discussion here. ...
20 views

### Why is the measured year 2018 inflation rate low despite rounds of quantitative easing?

Is it correct to state year 2018 inflation rate of 2.2% is very low? Is it correct to state that even though the commodity prices have not increased, the increased money supply coming from the ...
51 views

### Derive the cost function for a Homothetic production function

I'm having trouble understanding the steps in showing that a Homothetic production function's cost function must be expressible in the form $C(w, q) = a(w)b(q)$. Since the production function is ...
54 views

### What predictions do economic models make for an economy where 50% of the population earn less than the cost of living? [closed]

These are the admittedly somewhat disparate pieces of information gleaned from separate sources that the question arose from. According to The living wage foundation the real cost of living in ...
15 views

### divide by its lag and minus 1, percent change computation

I want to compute percentage change which is to divide by its lag and minus row wise for every column. Tried the following but can't. ...
43 views

### Best-responding to a stochastically higher distribution of bids

In Auction Theory, Krishna writes that: a bidder who faces a stochastically higher distribution of bids–in the sense of reverse hazard rate dominance–will bid higher (This follows the proof of ...
41 views

### Deriving the translog production function

Ive been having difficulty deriving the translog production function defined as: $$\ln y=\alpha_0+\sum_{i=1}^n\alpha_i \ln x_i+\frac{1}{2}\sum_{i=1}^n\sum_{j=1}^n\ \beta_{ij}\ln x_i\ln x_j$$ I know ...
25 views

### Walras's law in a Fisher market

Walras's law is stated for an exchange market: each agent comes to the market with a certain endowment of each commodity, a price-vector is determined, and the demand of each agent is the best bundle ...
33 views

### Anwar Shaikh's theory of the stock market

Anwar Shaikh's theory of the stock market, is explained for example in "The Stock Market and the Corporate Sector", or his book "Capitalism". It can be summed up as follows. The equity market is an ...
19 views

### What is par value and how it is different from face value?

I read a post that some countries has no par value so that companies are no longer obligated to pay the share capital i.e. ( par value * share outstanding). But i also read that face value (or par ...
70 views

### Why is Money Necessary?

I've heard a lot of different economists bullet point a few main ideas as to why money is necessary. However, I'd like to get an ultimate rundown list. What are the major reasons why money is ...
13 views

42 views

### Was Marx influenced by Ibn Khalduns Muqaddimah?

The following passage is in Ibn Khalduns Muqaddimah: One of the greatest injustices and one contributing most to the destruction of civilisation is the unjustified imposition of tasks and the use ...
44 views

### Why intuitively does Break-even point $= \dfrac{\text{Total fixed costs}}{\text{Selling price per unit} − \text{Variable cost per unit}}$?

p. 100. Accounting: A Very Short Introduction (2014). I understand the green sentence beneath, but not the fractional formula for BEP containing CPU in red? What's the intuition for the latter? ...
42 views

### Proof that the budget set is closed [closed]

Mas-Colell, Whinston and Green's Microeconomic Theory affirms the budget set is closed. I would like to know why. The definition of open set in the book is the following:
15 views

### Fluctuations in the financial and capital account balance

I was just analysing the various accounts of the balance of payments for the economy of Malaysia. It has come to my attention that the income balance and trade balance of the current account are ...