# All Questions

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### Can econometrics test for correlation or causality between prices and corruption?

This week there was news that some prices are rising. I heard that in some countries where corruption is high the prices are also higher. I wonder if there is causaility or just both at same. It would ...
288 views

### Self-selection bias during the course of experiments

Suppose you are running a randomized experiment to assess the effect of $X$, say some training program for unemployed people, on $Y$, say the chance of finding a job in the coming year. Suppose also ...
4k views

### Is scalping tickets harmful?

IMHO, scalping tickets is no different from legitimate arbitrage unless manipulative. Iirc, arbitrage increases surplus and hindering scalping is setting a price ceiling which leads to deadweight ...
274 views

### Influential Theory in the Economics of Poverty

As far as I can tell, research on the economics of poverty is very empirically driven, and this is probably appropriate. What kind of economic theory has been developed though? I'd also be interested ...
12k views

### Solow Model: Steady State v Balanced Growth Path

Okay, so I'm having real problems distinguishing between the Steady State concept and the balanced growth path in this model: $$Y = K^\beta (AL)^{1-\beta}$$ I have been asked to derive the steady ...
587 views

### What are some good repositories for economic data

Economic data is a very broad concept. It can include discrete preference relation data-sets as well as extensive time series data. But it is important that theories are tested against data, and the ...
632 views

### Collusion and number of firms

How would you answer the following question? You work for a CEO of a large firm. He says to you, "In my experience collusion is less likely to be sustained as the number of firms in the market ...
19k views

### How does a country devalue its currency?

I recently read an article in the New York Times that talked about China devaluing its currency (which I believe is held to a peg against the US Dollar). My question is: specifically what tools does a ...
816 views

### Why isn't the cost of shoes affected by their size?

I have noticed that many shoe selling shops I have visited have the same price tag regardless of the shoe size. Intuitively I'd think the bigger the shoe the more material and consequently capital ...
21k views

### What is the definition of “First Best”, “Second Best”, etc. in contract theory?

What is the definition of "First Best", "Second Best", etc. in contract theory? Especially, what is the difference between "First Best" in contract theory and "ex-post efficient" in mechanism design?
1k views

### Did previous researchers fail to detect the hot hand simply because of a statistical fallacy?

Many basketball fans/players believe that having made several shots in a row, the next shot is more likely to go in. This is sometimes called the hot hand. Starting (I think) with Gilovich, Mallone, ...
13k views

### What is an example of a utility function where one good is inferior?

Say the consumer has a standard convex, monotonic preference over Apples and Bananas. (Update: I'd like the preference to be as 'standard' as possible. So ideally we have diminishing MRS everywhere ...
844 views

### What is the point of all the models in an economics degree?

I am a student of Economics doing my masters degree and I have to say I am a bit tired of all the models. On the one side, there is these models where I can see how they are derived, which always ...
2k views

### What is the Gross Domestic Product (GDP)?

I suppose GDP is supposed to create a measure of a country's wealth/welfare, something easily indexable. But how exactly is it composed? And is its composition disputed? How good is it at measuring a ...
374 views

### Are there any states that don't have debt?

I've not been able to find any states that don't have debt to other states. This, to me at least, seems really strange. Are there any nation states that are not in debt to other states, if so which ...
16k views

### Outputting Regressions as Table in Python (similar to outreg in stata)?

Anyone know of a way to get multiple regression outputs (not multivariate regression, literally multiple regressions) in a table indicating which different independent variables were used and what the ...
707 views

### Intuitive explanation of $S(p,w)\cdot p=0$

Can anyone provide an intuitive explanation of why the Slutsky matrix right multiplied by the price vector yields a zero matrix? I know this is true but I do not really understand why it is true. ...
1k views

### Inflation and economic growth

Noticeable works about the impact of inflation on economic growth are dated back to the 90s. For example, Barro (1995): the impact effects from an increase in average inflation by 10 percentage ...
419 views

### The Case for Basic Income in developed and underdeveloped countries

From what I can tell, the idea of the basic income guarantee is very popular in some circles as an excellent alternative to a lot of modern welfare systems. Has anybody developed a theoretic or ...
353 views

### What are the recent advancements in building a unified theory of bounded rationality?

It seems that bounded rationality models focus on explaining a particular psychological bias, in a very specific way. In particular, its seems that the state of the art consensus is that one size does ...
228 views

### Is there a folk theorem for repeated games on networks?

Games on networks have been studied extensively, however, I was not able to find a folk theorem for games on networks. Is there one or can it be derived from an already existing folk theorem? With ...
242 views

### Why plug deficits with bonds rather than printing money?

The UK is running a budget deficit £107 billion a year. Inflation is currently running at 1%. Given these facts, why do they plug the gap by selling debt rather than just creating the money to cover ...
847 views

2k views

### Macroeconomics Textbook on New-Keynesian models

I'm looking for textbooks that explain the New-Keynesian models, without taking shortcuts on the mathematics, that would go in depth on the derivations of the formulas. I appreciate rigour, and ...
2k views

### How is it possible that all currency exchange rates are fixed w.r.t. to each other?

I wondered if it would be beneficial to exchange a currency through one or more "in-between" currencies. For example: instead of trading Russian Ruble (RUB) to Euro's (EUR), one would trade from RUB ...
840 views

### Game theory for showing interest and availability when dating

The more cynical (or perhaps realistic) of us would argue that there's a fair amount of game theory going on in the dating game. For example a classic ploy is 'Don't ring for three days, because you ...
844 views

### What is the evidence that econometrics has empirical value?

Economies are extremely complex systems with many variables, not to mention the fact that they emerge from the interactions of complex beings. I agree that economies have certain underlying principles,...
169 views

The basic idea of Schumpeterian Business Cycles is that new technologies require creative destruction but will yield positive growth. These two opposing forces have impacts onto the real economy at ...
5k views

### Which are the different Schools of Economic Thought?

It would be great to have a brief but comprehensive list of current (e.g. Austrian) and defunct (e.g Mercantilism) schools of thought in Economics. I think an ideal answer would include: the defining ...
746 views

### In the US, do high wages in regions like New York and California offset the high cost of living?

It's well understood that the cost of living in New York City vastly exceeds the cost of living in, say, rural Louisiana. It is also well understood that wages in New York City vastly exceed those in ...
3k views

### Why do low-budget films charge the same amount at the box office as super-high budget films?

In most occurrences, lower production costs translate into lower sales costs. Obviously there are other factors that influence price, including perceived value (affected by advertising), monopolies, ...
17k views

### Lexicographic preference relation cannot be represented by a utility function

I am stuck on the following exercise, related to preference relations and von-Neumann-Morgenstern utility function. A farmer wants to dig a well in a square field $[0,1000]\times[0,1000]$. The ...
8k views

### What is a substitute/complement in terms of mixed partial derivatives?

I am trying to understand how substitutability relates to mixed partial derivatives. I thought the change in marginal utility with respect to a change in the amount of $x$ would correspond to \frac{\...
1k views

### Money in the animal kingdom

Animals living in packs must have ways to decide how to distribute their goods among the pack members. Just like prices can appear in an exchange economy, prices could appear in pack economy. Though ...
29k views

### Marshallian Demand for Cobb-Douglas

When trying maximize the utility having a cobb-douglas utility function $u=x_1^ax_2^b$, with $a+b = 1$, I found the following formulas (Wikipedia: Marshallian Demand): \$x_1 = \frac{am}{p_1}\\ x_2 = \...