# All Questions

7,512 questions
48 views

### reference request: models of how racism or sexism affects decision making

My background is more in statistics and applied math, so I am not familiar with the breadth of decision making models from economics. However, I am working on a project that involves decision making ...
21 views

### Equilibria in non regular economies

We know that in regular economies general equilibrium theory predicts a finite and odd number of equilibria, using the properties of the excess demand function and the index theorem. How about the ...
67 views

### Logically inconsistent optimality condition

I'm reading a book on monetary policy, and it defines the representative household's consumption as $$C_t = \int_0^1 C_t(i) di$$ so, basically a sum over the consumption of good $i$. Then later on, ...
21 views

### What is the “bequest condition” in a finite-horizon discrete optimization problem?

For a finite-horizon discrete time optimization problem, my textbook provides a condition called the "bequest condition", which I'm not familiar with. Specifically, where the state at time $t$ is ...
10 views

### Reference recommendation on the causal relationship between family size and children's educational attainment, or the quantity-quality trade-off

I am currently reading both Poor Economics and Factfulness, and two seemingly contradictory statements jump out at me. From Factfulness, and I am kind of taking this statement out of context, but it ...
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### To the following data, what kind of econometric analysis can be conducted/ or what type of relationship can be established? [closed]

I have data for sale in petroleum products across different states in India of both public sector and private sector companies for past 10 years. No. of years - 2008 to 2018 monthly data for 10 years ...
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### Has Facebook considered a system of micro payments to pay users for the work they do in improving their Facebook?

Facebook, notoriously, crowd-sources through the internet to improve their product - Facebook. This without any payment. Given the vast computing power that is now available and the kind of personal ...
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Show that u=a+bM-yM^2 represents a risk averter's utility function who is interested only in the mean and the variance of the state distribution of Income M. Can anybody send me the full solution. ...
27 views

### A question about a derivation in Gali's Monetary Policy book [closed]

In Chapter 3 of Gali's famous Monetary Policy book, he measures the effects of a monetary policy shock. The interest rate rule is: Then a shock $v_t > 0$ occurs. He proceeds to measure how this ...
13 views

### Interest rate problem

I am supposed to solve this problem: mexican interest rate is 28%, interest rate in the US is 7% and exchange rate is 7.5 Mexican pesos for 1 US dollar. If interest rate parity applies and we don't ...
20 views

### Bond prices and Trade deficit

Why does the narrowing of trade deficit cause an increase in bond prices? I do understand that narrowing of trade deficit leads to narrowing of capital account surplus. Also, investor confidence ...
18 views

### Monetary economics: What is the causality between nominal and real interest rates?

I am very much confused about the causality between real and nominal interest rates, in monetary policy. So we know the Fisher equation: $$i_t = r_t + E \pi_{t+1}$$ Now imagine that the central bank ...
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### What is the financial contribution to the USA economy by illegal immigration - decade by decade - since slavery was abolished?

The following question was closed down by the 'community' policing 'algorithm' after two down-votes, so I'm asking it again with a bit more detail: After the end of slavery in the USA - paid for by ...
10 views

### Controlling for a variable in OLS - Stratification and Reaggregation. Simple Example

In his engrossing book "Naked Statistics" Charles Wheelan begins to explain how controlling for variables works by stratifying the sample. However, he stops short of explaining the reaggregation, ...
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### derivation of pigou taxes in multiple polluter case

I can`t quite wrap my head around one step in deriving the pigou tax in a multiple polluter case. There are j firms, which produce joint product in amount of $k_j$. Joint product can be abated, ...
22 views

### What data/factors/attributes do the professionals monitor in a top-down analysis on the macroeconomics?

I am learning to do top-down analysis on a number of sectors in the US equity markets. I have never done it before and I would appreciate it if some professionals can share their experiences with me. ...
17 views

### Deaton's AIDS/QAIDS model [closed]

Im new to economics and want to understand the AIDS/QAIDs model of Angus Deaton. Can anyone suggest possible readings for the same as a background knowledge??
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### Are direct mechanisms always truthful?

I am very new to mechanism design so I am a bit lost among the concepts, even the most basic ones. One thing that is not clear to me is the concept of direct mechanism and its relationship with the ...
35 views

### Why is the ten year interest rate lower for Spain/UK bonds than for US?

Take a look at the government bonds interest rates, https://www.marketwatch.com/. For the US is 2.9, and for Spain and UK are 1.5 and 1.1 respectively. Spain is an economy with high unemployment, a ...
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### Determining firm equilibrium output and price in a competitive market

I was given an economics question that seems extremely basic but I can't figure it out for some reason. It is as follows: Consider a market which is a competitive market, and suppose that a common ...
28 views

### Isn't it the case that figures on employment should equal the sum of employees plus the self-employed?

This is a question about data consistency. I'm using the AMECO database and I'm interested in employment data for Greece. My current understanding is that the series about Employment (NETD) should ...
15 views

### What is value in the context of microeconomic analys for case of monopoly profit maximization

I'm trying to refresh my microeconomics knowledge. And I have some "blind spots" I just can't fix. Let's say we have a monopoly on the market. It's usual goal is to maximize it's profits. The point ...
58 views

### A Perfectly Elastic Problem

A regression is of linear form y = bo + b1x1 + e It denotes house prices (dependent) on square-feet (independent) which are graphed on Y and X axis' respectively. Marginal effects measure a slope's ...
58 views

### Why do many countries hoard gold bars?

In my country, the only legal way to sell a gold bar is to sell it to the central bank. What are the reasons why some countries hoard gold bars?
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### Best financial model to proportionally distribute the company's income to all employees?

I'm planning to start a project of something "innovative". And among some of the parts of the project that I'm thinking about, it's in the term of how money (profits) should be distributed. The truth ...
28 views

### Where does the Gini Coefficient Spreadsheet Computation on Wikipedia come from?

on Wikipedia there is a page called income inequality metrics and there is a table that explains how to compute a few, for example the well-known Gini Coefficient. Please find this approach under this ...
49 views

### Is there a super term for goods/products and services?

A business can sell "goods" (/"products") and "services". Is there a term that encompasses both of these? Various words may fit (e.g. "offering"), but I'm looking for the technical term, if there is ...
31 views

### Validity condition for Instrumental Variables

My professor states the validity condition in the following way: $W$ (the matrix of instrumental variables) must be such that $\text{plim} \, \frac{W'u}{N}=0$, where $u$ is the error term. ...
57 views

### Can I recreate an experiment on Allais paradox using student grades as payoffs?

For a project in experimental economics, I thought of doing something related to expected utility theory/prospect theory, but using grades instead of money. Is this reformulation of the Allais ...
52 views

### Statistical Learning and Econometrics

The principal goal of Econometrics is to find causal effects between economic variables. But the growing technology level seems to show us that Big Data and Statistical Learning result in a tradeoff ...
23 views

### Calculating Market Concentration without sales data

I want to calculate market concentration (HHI and C4) but I don't have sales data. Is it accurate to use the share of establishments of each firm as a proxy for market power? Could you list some ...
54 views

### What am I doing wrong in the derivation of Bass diffusion model?

I've been deriving Bass diffusion model and keep consistently finding a different result than Bass' original answer. To make things worse, every single link in the Google results page just copies the ...
33 views

### Military expenditure over time

The following graph from the world bank website shows the world wide military expenditure in percentage of the world GDP over time from 1988 to 2015 I am trying to find similar data over a much ...
21 views

### equality between 2 operations using mean [closed]

why when we do the following operation mean (10 ,20,30)= 20 is different from (mean(10,20)+30)/2=22,5 there are no equality between the 2 operations using mean ? why? thanks a lot in advance for ...
54 views

### Why are we using exp(.) as the functional form in the household maximization problem inside the RCK model?

Currently I'm studying the RCK model at my Advanced Macroeconomics I classes. A question arose almost immediately when I saw the utility function of a household in this model. The question is: why ...
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### Why is there a stochastic discount factor in firms present value?

In a book I am reading, the problem of the firms is described as maximizing current market value of profits. $$\max \sum_{k=0}^\infty \Delta_{t, t+k} \cdot "\text{profits in period k}"$$ So, ...
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### The Difference between investment and savings in CA identity

Mathematically speaking the current account is defined as: $$\text{CA}=S-I$$ where $S$ is savings and $I$ is investment. We know for a closed economy $S=I$ so $CA=0$. practically speaking for an ...
27 views

### Does Pascal's Wager fail archimedean property?

I assume most people have heard of Pascal's Wager, in case you have not: https://en.wikipedia.org/wiki/Pascal%27s_Wager By the Stanford encyclopedia of philosphy: "We have a decision under risk,...
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### How to calculate marginal utility with two goods?

I'm just getting started as an amateur into microeconomics and I really can't understand this thing about marginal utility when more than one good is involved: Let's say I have the utility function U ...
23 views

### Problem finding Demand Function

I am analyzing pricing for a new streaming service for a school project. My thought is to calculate the demand function of a player in the same industry and then calculate the optimal price. I am a ...
17 views

### How does social cost and social benefit work?

I am really lost right now. I have a test tomorrow and I am stressing out. Whatever I look at for externalities, which could be my textbook, a website, notes from class, they all contradict each other....
20 views

### Bertrand model of product differentiation

Consider two firms competing in a differentiated product market. The demand function for firm I, i = 1, 2, is given by Di(Pi, Pj ) = a − bPi + dPj ; 0 < d < b. Assume that there is a per ...
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### Is there a correlation between pharmaceutical prices and drug dealers?

Question: Is there a quantitative or some kind of correlation between the number of drug dealers in a certain region and the price of pharmaceutical drugs? This is for a case I'm working on, but I ...
29 views

### 2 versions of the koyck distributed lag

In econometrics, ( this material is in a lot of the literature but, IMHO, can most clearly be found in Harvey's text, "econometric analysis of time series"), there are generally two versions of a ...
24 views

### IS-LM , Eurozone and Interest Rate Parity

In the IS-LM framework, when the CB expands Money supply, interest rates are driven down, investment is boosted, and aggregate output increases (shift of LM curve, movement along IS curve). In the ...
42 views

### Existence of 'best' and 'worst' lottery

How can 'the best and worst lotteries exist when the set of outcome is finite and the rational preference relation satisfies independence axiom' be proven?
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### S=I in a closed economy

In a closed economy, the national income identities imply that $$S=I$$ However, the intuition is not clear to me. The saving is the part of national disposable income that is not consumed. $I$ is the ...
17 views

### What is this equation for sharpe ratio?

Question b.. what is that equtioatn? thought it was $$\frac{w_1E[r_1]+w_2E[r_2]}{w_1^2E[r_1]+w_2^2E[r_2]+2cov(r_1,r_2)w_1w_2}$$ But I got wrong for that. ;s