# All Questions

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12 views

### Why is London as successful as it is in financial services?

Why is London as successful as it is in financial services? Are there unique characteristics or historical factors that make it attractive to financial service companies?
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### Calculating the weighted average cost of capital

Question : Provided that interest on debt is 12%, dividend to share holders are 15%. Calculate the weighted average cost of capital if debt is 70% and equity is 30%. Given, tax rate is 20%. I know, ...
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### Why is a new home considered an investment instead of consumption? [duplicate]

My AP macroeconomics teacher ran through some examples today of what transactions would or would not be counted in GDP. He gave examples, among others, of a person cashing a social security check (...
45 views

### Book recommendation: first year economics course

Can anyone help me find a nice introduction (possibly popular economics) into the field of black market economics.
33 views

### Supply/Demand Curve Equation (beginner) [duplicate]

The linear demand function is $Q_D = a + b(P)$. I understand from this thread that it can be thought of as a simplification/magnification of the overall demand curve. Is there an equation that ...
66 views

### Debt-to-GDP ratio in connection to inflation

On this segment of the Tucker Carlson show, interviewing Robert Hockett, as an advisor to Rep. Octavio-Cortez on the proposed Green New Deal, the following interchange ensues: Tucker: "On the low ...
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### What does it mean when marginal profit is the same due to the “competitive principle”?

I am reading "Economic Development with Unlimited Supplies of Labor" by W.A. Lewis and he states that Though the capitalised sector can be subdivided into islands, it remains a single sector ...
119 views

### What are eigenvalues and eigenvectors used for in economics?

In economic and econometric literature, i see references to eigenvectors and eigenvalues. Having taken my fair share of linear algebra and econometrics courses I have not really seen how exactly they ...
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### Inflation adjusting by exchanging currency and using other countrys CPI

I want to inflation adjust some values from China. The values are the values in a given year. I have them both in Chinese Yuan and American dollars for a given year. Now, there is no CPI data for ...
10 views

### Building an square product-to-product table based on rectangular supply and use tables

I need a product-to-product input-output (I-O) table to conduct environmentally extended I-O analysis. I have supply and use tables at basic prices relating different industries and products, but ...
24 views

### Does GST/VAT taxation reduce offshore corporate tax avoidance?

So large tech companies are known for having some side 'off shore' company in a 0% tax country (like, but not exclusively, The Bahamas), which charges royalties at approximately the same amount, as ...
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### Amout of total investment being pension capital

Is there data on how many percent of the total investments in the US i.e stock, funds, bonds etc, that are owned as pension capital? The corresponding global info would also be nice if someone know ...
28 views

### What is the simplest yet most effective way of describing the incentives for specialization mathematically?

I'm trying to create a NETLOGO model of firms in a market and their decisions on whether to specialize or not. I find that it is a lot more difficult than I thought it would be. For example, trying to ...
16 views

### Are there phi2 phi3 statistics for the DF-GLS unit root test?

It's known that there are phi 2 and phi 3 statistics when performing ADF unit root tests. These statistics tell us the correct specification of the model (Trend, constant, or none). When running ADF ...
11 views

### Cross Currency Swaps

How can cross currency swaps or derivatives be used to help a country hide its debt? How did Goldman Sachs do this in Greece’s case?
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### What is the rationale behind David Friedman’s division of countries?

David Friedman stated, on multiple occasions, he’s wary seeing Europe become one single country. Similarly, he’d much rather have the US divided into more independent societies. What is ther ...
41 views

### Is there a possibility to have an inferior good (x) in a utility function where x & y have 0 cross elasticity?

A question I got on an exam that I think I messed up on: If we have cross elasticity of 0 (x & y are independent), can x be an inferior good? I answered with a yes. Am I wrong?
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### What makes up GDP in the real estate sector?

The global GDP can be slit up between different sectors to see how sectors contributed to economical growth. I'm interested in knowing what elements are used to calculate the GDP in the real estate ...
48 views

### difference between demand for money and credit

As far as I understand in both cases we are seeking money that we don't have and would like to borrow. That being said what I find even more misleading is the fact that as a nominal interest rate ...
9 views

### A single price function for two simultaneous transactions

I am focusing on a scenario where an entity $A$ sell a service 1 to entity $B$. Moreover $B$ also sell a service 2 to $A$. The utility function of $A$ : U(A)=price from B for service 1-price to ...
42 views

### Fiscal sustainability: Debt dynamics

The change in debt ratio can be written as the equation Where G-T is the primary budget deficit. r is a constant interest rate. g is the growth rate. The equation for debt ratio can be drawn in a △d/...
28 views

### Using the labor market modeled in terms of real wage what are the changes in real wage and labor if the labor force falls/rises and taxes rise?

W/P = real wage N = labor I understand that if the Labor Force (LF) rises, it is a rightward shift of the NS curve (Labor Supply) and if the LF falls, it is a leftward shift of the NS curve. ...
431 views

### Is the Hicksian demand curve steeper or flatter than Slutsky demand?

Putting price on the vertical axis and quantity on the horizontal axis, is the Slutsky demand steeper or flatter than the Hicksian demand curve? If I calculate the Slutsky and Hicksian substitution ...
13 views

### Start year and coming year

Here which is start year and which is the coming year??If the starts the year for ex: 2018-19 then coming year is 2019-2020 right? Actually my doubt is about if a firm's inventory 100 at 2018-19 ...
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### Change in inventory

Inventory change=last period's ending inventory- the current period's ending inventory. Change in inventory= production of the firm during the year- sale of the firm during the year No doubt in (1) ...
35 views

### What would the production function look like if MPN (marginal product of labor) were constant, rising and declining?

I know this is a macroeconomic topic and I believe I understand the what the graph for the production function (with Y, Real GDP, and N, labor on the axis) would look like if the MPN were constant and ...
26 views

### AMD and Intel duopoly

What kind of duopoly competition model do these two companies "follow"? I'm doing a work in which I aim to analyze the economic outcomes after Intel's chip shortage in november 2018. Any links for a ...
25 views

### Question on Finding the Correct Emission Tax $t$

Let there be two companies $U_{1}$ and $U_{2}$ where, initially $U_{1}$ produces and sells $x$ units at $p=18$. Production costs are $C_{U_{1}}(x)=\frac{1}{6}x^3$ and in the process $a$ units of ...
28 views

### Does decreasing deficit (by decreasing government expenditure) improve consumer confidence?

I read in a solution manual for the book "Macroeconomics" by Blanchard that decreasing budget deficits will improve consumer confidence and thus recover some of the output lost due to a decrease in ...
16 views

### How to do elasticity modeling for products where there is slab pricing like electricity?

I have few product categories eg prod1 prod2. Each category have similar products. So prod1 has 3 similar products with slight difference in features and prod2 has 5 products with slight differences. ...
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### Measuring the capacity of an investment strategy

From talking to people, an investment strategies capacity seems to have a major effect on performance once it becomes popular. XIV seems to be a good example. But, what I have yet to hear is how ...
9 views

### Did Galbraith have specific corporations in mind in reference to this quote?

Galbraith is on record for writing: When the modern corporation acquired power over markets, power in the community, power over the state and power over belief it is a political instrument, ...
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### Market price, output that maximize the price and level of firm profit after applying a license fee

I'm currently working on a problem that says the following : At first we had a number N of firms in perfectly competitive industry,the exercice gives us the total cost and the Market Demand with p as ...
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### The dynamics of c and k in Ramsey model (using the phase diagram)

I am having hard time understanding the dynamics of c and k using the phase diagram, the arrows don't make any sense to me. Any explanation will be a lot of help using the equations given. Thank you.
7 views

### gdp growth outliers reflect exchange rate variations

I have nominal GDP for 20 countries and I need it in dollars. I noticed that some observations like Belgium 1986 are havily influenced by exchange rate variations so that we have real GDP growth of 45%...
34 views

### Fixed-Effects on individual level with explanatory variable on state level

I am planing a panel data analysis evaluating a continuous policy intervention. I do have individual level data. I would like to account for individual fixed-effects. However, the explanatory variable ...
8 views

### How can you find the government spending multiplier from a VAR?

I have done a VAR investigation of how a number of macroeconomic aggregates respond to a government spending shock. However, I can't seem to remember something as basic as how to find the government ...
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### Table 11.1 in UN System of National Accounts (2008)

In the UN System of National Accounts (2008), paragraph 11.17 (p. 221) states: The evolution of net lending can be seen clearly in table 11.1. Non-financial corporations are shown to have a net ...
23 views

### Linearisation of the IS curve?

How to the IS curve linearised around the structural equilibrium?, what is the math behind it?
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### Central bank rate hikes and credit demand

Can someone help me unpack the quoted statement below? Trying to understand how the supply of credit influences the fed raising rates. I guess, why do rates rise or fall in conjunction if the fed ...
55 views

### Economic interpretation of a CES production function

I am following a paper where a production function of this type is used. $$Y=\left [\beta K^{- \rho}+\alpha \eta \left (\frac{K}{L} \right )^{-c(1+\rho)}L^{- \rho} \right ]^{-1/\rho}$$ It is a ...
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### Why bonds held by foreign investors is greater than total bond issued?

Total bond issued is reported by BIS debt securities data. Let BIS denote this amount. Bonds held by foreign investors is reported by Balance of payment statistics (IMF). It is the portfolio debt ...
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### Specific question about some figures in national accounts

I have highlighted four highlighted numbers in the UN System of National Accounts (p. 31, Table 2.13). My question is: What are these numbers? My guesses: 6 = Compensation paid by foreign firms to ...
66 views

### Elasticity of substitution between leisure in two periods

This is a basic question, but I am new to macro models. The question is from Romer's text. Assume a household only has one member and has no initial wealth, and the household lives for two periods. ...

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