All Questions

0
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0answers
32 views

Fixed Effects: Identifying coefficient for interaction term with a constant

Suppose I have a regression of the form: $$ Y_{it}=\beta X_{it}+\beta_{2}X_{it}\times D_{i}+\alpha_{i}+\epsilon_{it} $$ In the above, we have information by country-year on $Y_{it}$ and two ...
1
vote
1answer
10 views

World Inequality Database: Top 10% Income Share U.S. vs. Top 10% Average Income

I want to use the U.S. data from the World Inequality Database for a VAR analysis. However, I am confused as to why the series for the top 10% income share only runs back to 1962, while the series for ...
0
votes
1answer
26 views

Balance of payments and the free floating exchange rate system

I am a beginner economics student and recently, I have been learning about how balance of payments surpluses are important for a country to control the value of its currency using its accumulated ...
-1
votes
0answers
25 views

Implications of homogeneity of degree zero in the Walrasian demand function

Mas Colell, Winston and Green's Microeconomic Theory (3rd edition) has the following proposition (2.E.1): What is its proof? Definition of homogeneity of degree zero: Notation: $D$: Derivative ...
0
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0answers
8 views

Multiple regulatory changes at the cutoff

Consider a running variable $a$, and a cutoff $a_0$. There are two regulatory variables, $x$ and $z$. Both variables jump around $a_0$, in the sense of fuzzy regression discontinuity design (RDD) ...
1
vote
1answer
13 views

How does one deflate weekly price data?

It seems the highest-frequency consumer price index (CPI) data available is monthly. How does one convert weekly or daily price data into real prices?
0
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0answers
17 views

Chicago Price Theory Book Recomendation: Becker vs Friedman

Friedman's Price Theory Becker's Economic Theory I've heard good things about both these books. I wanted to get a good introduction to a distinctively "Chicago" styled price theory book. I can't ...
0
votes
1answer
110 views

When and why did governments impose restrictions on money creation

In many countries governments have made laws that bar themselves from creating money directly. Instead they have to go via a circuitous route involving the creation of bonds. This means that the ...
1
vote
1answer
37 views

In the context of banking, how (if at all) do the terms 'capital', 'net worth', and 'equity' differ?

In banking, are the three terms capital, net worth, and equity simply identical and exact synonyms? If not, how do they differ? (Aside: And what about in other contexts? For example, does the same ...
2
votes
1answer
54 views

Does brain drain really affect a nation's growth trajectory?

Take India as an example. India has been losing most of its bright minds to the west. India also ranks low in development. I would like to get a definitive answer to this cause-effect type question. ...
4
votes
1answer
58 views

Quasi-Linear Functions

I understand that quasi-linear functions have a general form $U(x_1,x_2,...,x_n,y) = f(x_1,x_2,...,x_n) + y$ and that for a quasi-linear function, the income effect with respect to the other ...
0
votes
1answer
42 views

How will the UK's economy be affected, if it will be a hard Brexit?

Will the outcome of Brexit have any positive impact on the UK market? Are there any available studies on this topic?
1
vote
1answer
22 views

Is there book or research on economically sustainable design of town or village?

I'm looking for a book which may help to design a self-sustainable small settlement, which can maintain its own economy with limited connections to the outside world. Prefereably it should answer ...
3
votes
1answer
41 views

3rd Degree Price Discrimination

I came across a True/False question in my economics problem set: Is the following statement true or false? "A monopolist can practice third-degree price discrimination in the two markets it ...
0
votes
0answers
7 views

Can structural unemployment be shown in a labour market diagram?

Structural unemployment is a part of natural unemployment, so I know it can't be shown in an AD/AS diagram. But does that mean it also can't be shown in a labour market diagram?
-2
votes
1answer
23 views

How to find the optimal consumption basket? [closed]

A consumer has the following utility function and income. 𝑈(𝑥, 𝑦) =1/2 * ln 𝑥 + 1/2 * ln y Price of 𝑥 = Price of 𝑦 = 100. Income = 1000 Suppose that the consumer gets 2 redeemable coupons for ...
2
votes
0answers
11 views

Data source for the relative frequency of different kinds of expiration date by retailers? (use by, sell by, best by)

I'm not sure if this is the correct Stackexchange site for this question, but I am interested in the economic and environmental effects of food waste reduction. A common policy proposal to reduce food ...
0
votes
1answer
33 views

Stock return predictability. Why do papers continue to use Granger Causality tests

There is a long literature on stock return predicabtility. When I read papers I see lots of authors still using granger causality tests. It is still prominently taught in undergrad and grad classess....
0
votes
0answers
37 views

Elasticity of employment in respect of reduction of working time

If elasticity of employment in respect to working hours is positive then work time reduction decreases employment and the opposite is true if elasticity is negative? I mean if I want to see how ...
3
votes
3answers
106 views

Book recommendations: Introduction to economics

I recently made my first trip to a foreign country. I'm quite amazed by how things work. Why are things priced differently at different places? Is the bed-sheet that I bought from that country worth ...
3
votes
1answer
50 views

Disagreement in Strategic Bargaining

Construct a pair of startegies for the ultimatum game ($T=1$ bargaining game), that constitutes a Nash Equilibrium and together support the outcome that there is no agreement reached by the two ...
2
votes
3answers
91 views

When a central bank buys government securities, is this exactly equivalent to printing money?

When a country's central bank buys that same country's government securities, is this exactly equivalent to printing money? There seems to be no agreement on this. Federal Reserve FAQ: Is the ...
0
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0answers
19 views

Consequences of a US sovereign default

The US Treasury website states: Failing to increase the debt limit would have catastrophic economic consequences. It would cause the government to default on its legal obligations – an ...
3
votes
2answers
70 views

Mechanism Design: Proving that the expected utility is differentiable

Given a direct mechanism, we define a buyer's expected utility $u(\theta)$ conditional on her type being $\theta$ by $u(\theta)=\theta q(\theta)-t(\theta)$, where $q:[\underline{\theta},\bar{\theta}]\...
0
votes
1answer
46 views

General government debt vs central government debt?

The IMF's Global Debt Database (Excel, Stata) lists data for: General government debt (GG); and Central government debt (CG). What are the conceptual differences between these two items? For ...
0
votes
1answer
29 views

Why a current account surplus is bond to lead to an appreciation of a currency?

I have got some confusion in trying to explain why a trade surplus is going to lead to an increase in the exchange rate. The usual logic goes as follows. Export X > Import M Demand for the country's ...
5
votes
2answers
581 views

What would you call a real market that is close to perfect competition?

I want to explain perfect competition to students using a few practical examples without going into much of the theory. But I want it to be theoretically accurate and I don't want to claim that those ...
0
votes
1answer
25 views

Understanding what's in the frequently reported and discussed high demand in IT specialists in Germany - is the IT Fachkräftemangel real?

So far, I can observe the following contradictory evidences what I perceive from the media. Statement group #1. In the press, there are repeated reports from different sources about missing ...
0
votes
0answers
8 views

Lease revenue bond literature

I can’t find anything that goes into to detail on how lease revenue bonds are a problem for municipalities or governments. I know the issuer(municipality) carries no liability on the bond. However, I ...
0
votes
0answers
45 views

Equivalence of definitions of upper contour sets

Mas-Collel, Winston and Green's Microeconomic Theory (3rd editions) offers two definitions of the upper contour set: How can the equivalence between the two definitions be proved?
2
votes
0answers
40 views

Insurance and Hirshleifer effect

I am trying to understand the statmement that 'public information kills insurance opportunity' -- referred to as Hirshleifer effect. Does it (in general) lead to some undesirable outcomes? Could you ...
2
votes
1answer
57 views

How do small firms survive in an oligopoly?

How do small firms survive in an oligopoly if large firms already dominate a huge amount of market share in the market? in terms of the supermarket industry between large supermarkets and small ...
0
votes
0answers
39 views

How to do test statistic on difference in two independent variables?

If i have time series regression $R_{i,t} = \alpha + \beta x_1 + \gamma x_2 + \delta x_3 + \varepsilon_i$ In this case, how can I conduct test statistic of $\beta - \gamma$? Is it to use unpaired two ...
0
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0answers
16 views

What model to use when defining a 20-year growth path in a developing country?

What economic growth model is commonly used for formulating a 20-year national development plan in a small open developing country?
1
vote
1answer
25 views

Does a strong exchange rate always mean a cheap holiday regardless of where you are from and going?

As question title states, does going from one country with a much stronger exchange rate, or a moderately higher exchange rate, in comparison to a country you visit always mean you get more bang for ...
0
votes
0answers
76 views

Rational expectations

Under rational expectations and no nominal rigidities, aggregate output is sensitive to ___________ supply and ___________ demand shocks. a) Anticipated, anticipated (b) ...
0
votes
0answers
20 views

Distribution function for number of people owning x in assets by country

I would like to know, where I can find, for each country, the graph of the following data distribution: On the x-axis, money amount, in thousands dollars or other currency. On the y-axis, for graphs ...
1
vote
1answer
25 views

Sources on competition policy

Are there any good books or blogs on Economics in Competition Policy? I am primarily interested in US and EU. I know of the Motta and Bishop-Walker books but I would like something with more details ...
0
votes
0answers
36 views

Is the development of market rate housing independent of the development of affordable housing?

Is the development of market rate housing independent of the development of affordable housing? Can anyone provide evidence that supports or refutes this? Here is my thinking. While I have yet to ...
2
votes
1answer
101 views

Why do riskier investments pay more?

I'm talking about bonds, stocks, and the sort. I understand that an individual investor that's planning to invest, say, 50% of his savings, may require a higher expected gain to go for a riskier ...
0
votes
0answers
10 views

The income method of calculating GDP

Using the income method we subtract the indirect tax to work out GDP@ MARKET PRICE but if imports are also give do we subtracted those import too using the income method.
1
vote
1answer
42 views

Potential solutions of the $n$-player Prisoner's Dilemma

Suppose we want to model a real-world phenomenon as an $n$-player Prisoner's Dilemma. To be more specific, suppose we use RM Dawes' paper "The commons dilemma game: An n-person mixed-motive game with ...
1
vote
0answers
34 views

Does the reciprocal of the price elasticity of demand have an interpretation?

I have 2 related questions that i think are straightforward but am worried I have over-simplified! (i) Suppose the demand curve is downward sloping and the supply curve is upwards sloping. Suppose ...
1
vote
0answers
15 views

Deriving Sufficient Conditions For Existence of Unique Non-Explosive Equilibrium In DSGE Model With Hybrid New Keynesian Phillips Curve

Consider the following New Keynesian DSGE Model with standard notation: $\pi_t = \kappa y_t + \gamma_f \mathbb{E}_t[\pi_{t+1}] + \gamma_b \pi_{t-1},$ $y_t = \mathbb{E}_t[y_{t+1}] - \frac{1}{\sigma}(...
0
votes
0answers
43 views

What are the impacts of a small increase of the wages on consumption, labor supply and production?

We have given the utility function $\displaystyle U(v(c)-k(l))$ where $\displaystyle u$ and $\displaystyle v$ are increasing and concave functions and $\displaystyle k$ is increasing and convex. ...
0
votes
0answers
12 views

Calculating Demand curve function from Elasticity of demand, price per quantity and quantity purchased?

For an assignment I have to model the demand function and find consumer surplus based upon elasticity of demand, price per quantity and quantity purchased. Ill copy and paste the assignment below and ...
0
votes
0answers
16 views

Can the same recession be both inflationary and deflationary?

Suppose there’s a recession caused by a bubble bursting in a particular industry. Maybe a great number of houses has been built but there’s hardly any demand, it turns out. Or some important crops are ...
1
vote
1answer
33 views

Supermarkets industry market structure

If the industry is dominated by a few major large retailers like Walmart and target with thousands of many other small supermarkets around the country, what is the market structure of the industry? is ...
0
votes
1answer
13 views

Is it possible for Gross value added be negative on a company level?

In National Accounts production approach, can there situations whereby the Output of a company is far lower than the Intermediate consumption therefore the Value added is negative?
1
vote
0answers
28 views

Global games: How to derive posterior with uniform prior and signal

I have access to some lecture notes on Global games (following the model of Carlsson and van Damme (1993)) showing how to derive the players posterior beliefs. But I don't really grasp how players ...

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