All Questions

1
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1answer
38 views

Demand correspondence is both upper and lower hemi-continuous; is the preference continuous?

$\succsim$ is a weak order over $\mathbb R^L$. For a closed budget set $B\subset\mathbb R^L$, define demand correspondence: $$D(B)=\{x\in B|x\succsim y\forall y\in B\}$$. We know that $D$ is always ...
1
vote
1answer
26 views

How to build a Social Accounting Matrix from an Input-Output Table?

I built an Input-Output table (IOT) with the industryXindustry format because I thought it was a building block to build a social accounting matrix (SAM). But now I realize that I can't transpose the ...
0
votes
0answers
8 views

How do I simulate technological change in an input-output model?

I am interested in using environmentally-extended input-output models to construct different scenarios representing waste reduction (efficiency gains) in different economic sectors representing stages ...
1
vote
2answers
22 views

Can marketing efforts be considered to be a factor of production?

This is a sightly unconventional question, but I want to know whether marketing efforts can be considered as a factor of production. After all, if no one knows about your product, you can't make a ...
1
vote
1answer
34 views

Independence and Reduction Axioms

I have read that the Independence of Irrelevant Alternatives axiom in expected utility theory implies the fact that compound lotteries are equally preferred to their reduced form simple lotteries. ...
1
vote
1answer
50 views

Gapminder and OurWorldInData [closed]

I have found two great resources to learn about the distribution of goods (of any kind) all over the world: gapminder (Hans Rosling) ourworldindata (Max Roser) By reading their "about" sections they ...
-1
votes
1answer
39 views

Maximization when parameters are unknown

I would like to know if my understanding about how to find a maximum of the function when some parameters are unknown is correct. Consider the following maximization problem. $\max_{x}V=\int_0^{a(x)}...
0
votes
1answer
17 views

ratio independent time-invariant variable

I run the following function: $$Y_{it} = a_0+a_1*X_{it}+K*a_3+\epsilon_{it}$$ where $X_{it}=M_{it}/N_{it}$ is a generated variable. I got data $Y_{it}$ for the period from 2010 to 2015. Due to data ...
0
votes
0answers
19 views

How can I obtain State level Investment in the US?

How can I obtain investment level data by state in the US? I want to analyse how Public investment vs Private Investment responded to TFP shocks on a state level, so I am looking for Gross Private ...
0
votes
1answer
36 views

First Order Stochastic Domination and lottery preferences

Let $L$,$L'$ be two lotteries over the real numbers. Let $u$ be an increasing Bernoulli utility function. Let $F_L$, $F_{L'}$ be the CDFs of the two lotteries. We wish to show that $$L \succ_{FOSD} L'...
0
votes
1answer
30 views

How to determine correct fixed effects in linear regression model using unbalanced paneldata

I am currently working on a research project regarding the introduction of mandatory earnings guidance regulation in multiple countries within a time span of 10 years (staggered adoption). As I can ...
-2
votes
2answers
72 views

Are currencies equilibrating?

I was travelling recently and realised that dollars, euros, British pounds and Swiss francs all have more or less the same worth (i.e. 1 dollar $\cong $1 pound $\cong$ 1 euro $\cong $ 1 chf). This was ...
3
votes
4answers
153 views

Why do companies launch products at much higher prices, only to reduce the price drastically after a few months?

I see this to be a prevalent trend - companies too often launch products at much higher prices than they know is gonna lead to good sales numbers, only to reduce the price drastically after a few ...
0
votes
0answers
25 views

Stay or switch game

Consider a game consisting of two players, P1 and P2, played over multiple time steps. Refer to P1 as she and P2 as he. State: Each player can be at one of two locations, A or B. Writing the possible ...
2
votes
1answer
43 views

Clarification on the definition of Bayes Correlated Equilibrium

I would like your help to understand the definition of Bayes Correlated Equilibrium (BCE) in an incomplete information game at p.7 of this paper. Let me summarise the definition provided in the paper....
0
votes
1answer
66 views

Stackelberg Oligopoly 3 firms [closed]

Imagine that there are 3 firms in a monopolistic market, F1, F2 and F3. Firms 1 and 2 are incumbent firms and act simultaneously whereas Firm 3 observes the actions of both firms before deciding ...
2
votes
1answer
205 views

What is the proper term for “contraction economics?”

By "contraction economics" I mean theories and work based on the assumption that the population of a country will decline over time. An example might be a paper looking at the housing market for ...
0
votes
1answer
44 views

Quantity theory of money

Suppose the velocity of circulation (V) is constant. Annual growth rate of real GDP is 5%. The money supply grows by 14% per year. Use the quantity theory of money to calculate the inflation rate. My ...
0
votes
0answers
21 views

lifetime consumption explained

The formula for today's consumption is defined as: $$C = Y - T -S^P $$ That being said the consumption of tomorrow is: $$C' = Y' - T' + S^P(1+r)$$ Could anyone possibly explain to me why the ...
2
votes
0answers
33 views

Steady State in Korinek and Simsek (2014)

I was reading a paper by Korinek and Simsek (published in the AER in 2016). The version I cite is an IMF Working paper from 2014. The authors essentially describe an economy which has two types of ...
0
votes
0answers
9 views

How do I calculate quarterly Sharpe Ratio USING geometric averages?

I am looking to calculate the Sharpe ratio using Geometric average. The issue is I don't understand how to find the standard deviation term. Any help would be greatly appreciated.
0
votes
1answer
19 views

Implications of the concepts of combination/expansion of an information structure

I would like your help to understand the concept of combination/expansion of an information structure in the incomplete information game at p.6-9 this paper. Let me summarise the game as described in ...
0
votes
0answers
8 views

What is the effect on money multiplier of the following three cases?

Assuming ceterus paribas in each case: (i)The bank expands its operations in the field of financial derivatives. (ii) Increasing competition leads to a fall in the transaction costs incurred by ...
0
votes
0answers
10 views

Why is the present value of outflows = present value of inflow in an small open economy?

So as far as I understand the present value of outflows is the amount of money economy. On the other hand, the present value of inflow is the money coming into the economy (from other countries). ...
0
votes
0answers
19 views

Using Propensity Score Matching to evaluate non randomized and fully implemented village fund program

So i want to make a research about the impact of this program to community empowerment and infrastructure in villages. But the problem is the program itself (at the first year) implemented to almost ...
6
votes
1answer
45 views

Meaning of $dF(z)$ in expected utility framework

Background: from a Microeconomics course, $F$ is a cdf. In other words, if $F$ has a density function $f$, then $$F(z)={\int_{-\infty}^z f(x) dx} $$ Write the Bernoulli utility function $u:...
0
votes
1answer
23 views

Production function involving profit maximisation

​Hi, I don't get how the answer of d is deduced in this question because I don't think I made any mistakes in my calculation and have also used all the information given. After knowing L is 800, I ...
-1
votes
1answer
20 views

Price discrimination question

For this question the answer is b which is the TR of group 2. If price is the same, my question is why isn't the demand function of group 1 considered? Why is the TR of group 1 omitted?
-1
votes
1answer
22 views

MRTS question involving production function [closed]

My work out shows constant MRTS and also increasing returns to scale. I thought the answer was C as I only found increasing marginal products of labour and capital. I really don't see how the answer ...
0
votes
1answer
40 views

Sequential game equilibrium strategy question

The question asks for player B's equilibrium strategy, hence shouldn't player B choose the strategy that gives the highest payoff after player A's move? Why does player B choose 4 over 5 and 6 over 8 ...
1
vote
0answers
28 views

I can not answer f) Pareto efficiency [closed]

Consider a society of individuals who receive an income of \$10, 000 pesos if they are healthy and \$100 pesos if they are sick. There are two types of individuals: some who get sick with a ...
1
vote
0answers
10 views

How is seigniorage redistributed in the Eurozone?

An ECB page notes that: As euro banknotes travel freely across borders, at any one time the number of banknotes in circulation registered at each national central bank can vary enormously. The ...
2
votes
2answers
43 views

Why does Denmark have such a huge disparity between its income and wealth Gini coefficients?

(After-transfer) income inequality and wealth inequality are obviously not the same thing, but I would intuitively expect that, all else equal, they would be reasonably well correlated across ...
0
votes
0answers
26 views

Optimal pareto in two-person game

For what values $x$, $y$ the profile $(D,L)$ is Pareto optimal? \begin{array}{c|ccc} & L & R \\ \hline U & x,5 & x+2,y \\ D& 1,-1 & x,0 \\ \end{array} Is correct $x<1$ ? ...
0
votes
0answers
14 views

Uncovered Interest Rate Parity Assumptions (UIRP)

When learning about UIRP i have naturally come across the assumptions under which it may hold. However i am having trouble understanding the role of these assumptions and what the actual consequences ...
0
votes
0answers
10 views

Exchange rate target zone 45 degree line in the free float case - Krugman Target Zones

As far as i understand in the Krugman target zone model the following equation describes the behaviour of the exchange rate within and outside a target zone $s_t = f_t + \alpha E_t(ds_t/dt)$. But if ...
1
vote
2answers
76 views

Value of Currency Itself

What is the value of an individual piece of currency itself based on the efficiencies it allows in trade, in contrast to the value it represents? For example, people often talk (complain) about the ...
0
votes
0answers
12 views

Compound lottery preference implies simple lottery preference

Suppose $\alpha>\beta$ and for two lotteries $L, L'$ $\alpha L + (1 - \alpha)L' \succ \beta L + (1- \beta) L'$ where $\succ$ implies preference. If the independence theorem holds, how do you ...
-1
votes
1answer
16 views
1
vote
1answer
30 views

Are there economic models that predict (only) a medium/long-term negative effect of protectionism?

Going by some ECB models/estimates from last year, protectionism would result in negative consequences pretty fast, e.g. For illustration, I will use the results of simulations carried out by ECB ...
0
votes
1answer
43 views

why does an aging population positively impact on a decline in the smoking rate?

I've been studying the causes of a decline in the smoking rate, and I found out from the article that an aging population causes the decline. But, I'm not sure why it could happen. Is that because ...
0
votes
0answers
24 views

Condition for a Nash equilibrium

Consider two people have a mutually advantageous relationship. That is, if both dedicate more effort to the relationship both improve. Specifically, each individual chooses a level of effort $x_{i}\...
0
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0answers
3 views

How to research “the role of market analysis in small enterprises efficiency/ performance/ profitability in Afghanistan)

I’m a BBA student from Afghanistan and looking for a dissertation topic. My interest area is analyzing and managing businesses, specially small enterprises. This is an old topic to research I know, ...
1
vote
0answers
10 views

Difference between IS curve viewed by Keynes and by Friedman

In my economics lectures, we are going through Keynes vs Friedman. As far as I got we have a downward sloping IS curve in the IS-LM model. We get this curve from the Keynesian cross when the rate of ...
0
votes
1answer
42 views

Construction of a 3x3 simultaneous game

How could I construct a 3x3 simultaneous game with 2 players with no equilibrium in pure strategies but 1 is mixed strategies . I am able to write down one with no pure strategy Nash equilibrium but ...
-1
votes
3answers
70 views

Why is demand curve always going down?

In many economic charts with demand and supply curve, people often say the demand curve goes down with more quantity. But I will give you a really practical example, why I think they are wrong. ...
-1
votes
1answer
57 views

How do people check or trust that central bank is not cheating? [closed]

How people can be sure that somebody, cooperating with central bank (or working in it), is not creating money in digital or paper form for themself, so that nobody else notices it?
-1
votes
2answers
59 views

SMD and Lucas critique

One of the consequences of Lucas' critique is that models must be microfounded. On the other side, Sonnenschein-Mantel-Debreu (SMD) theorem claims that microfoundation doesn't have any repercussion on ...
1
vote
0answers
14 views

What is the financial incentive for physicians and hospitals to join an Accountable Care Organization (ACO)?

Accountable Care Organizations were created by the Affordable Care Act in 2011 in order to improve quality of care and reduce costs for patients and are part of a change from fee-for-service payments ...
0
votes
0answers
36 views

Dividing households by income

I wonder how one should (or does) divide households by income in a sensible way. Say you want to divide households in a country into five income groups: very small income small income medium income ...

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