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Microeconomics Price elasticity of demand [closed]

(a) What are the price elasticities of demand at points A and B? What are the elasticities at different points on the demand curve? (b) What happens when B approaches A or vice versa? Point A is (Q=2, ...
2
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2answers
209 views

Multiple solutions to an HJB, how to pin down the optimal “viscosity” solution?

Consider the deterministic consumption-savings problem: $ V(a_t) = \underset{c}{\max} \int_{\tau =t}^{\tau = \infty} e^{-\rho (\tau - t) } u(c_{\tau}) d\tau $ w/ $u(c)=\frac{c^{1-\gamma}-1}{1-\...
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1answer
25 views

Was the financial crash of 2008 caused by top graduates of the American Ivy Leagues working at wall street banks?

From this article by Lisandro 'Leloy' Claudio, a Philippine/a Filipino professor of history, politics, South & Southeast Asian Studies a country can become a sad place if its most brilliant minds ...
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1answer
15 views

How to weakly predict T-bill rates?

I know, I know -- if I could predict Treasuries, I could leverage that information, various forms of the EMH, etc. But a lot of people have mortgages (ARMs) tied to US1Y, and so having some kind of ...
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2answers
32 views

Is there any restriction for numerator of variance calculation for population?

When reading things relating to the degree of freedom, I face this document. In this document, there is one part: Standard deviation in a population is: I understand that when we estimate the ...
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0answers
2 views

Quantifying treatment effect in multivariate interrupted time series

I have a multivariate time series dataset, from which I am building an ITS (Interrupted Time Series) model by using facebook's Prophet to construct the counterfactual. Let's say I have a y variable ...
5
votes
1answer
1k views

Is there a “runaway” threshold for Debt-to-GDP Ratio in the U.S.?

Last year, when Congress was debating the stimulus/relief packages, one Senator made a comment about the debt-to-GDP ratio and how we are approaching a point in that ratio that will have some major ...
0
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2answers
37 views

What would happen if individuals stopped investing their money in conservative low-yield products?

There has been a rise in popularity of retail investing in stocks driven by higher annual % returns. The % returns offered by things like banking savings accounts or government bonds seem a lot less ...
5
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3answers
820 views

What should we do if the subsample have the opposite results to the general results?

In my replication study, I examine whether a law (a law implemented staggered by different countries) has an impact on firms' cash equivalents. The result turning out for the whole sample is that the ...
0
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0answers
7 views

Is there any exchange in stack overflow to guide writing economic paper? [migrated]

Maybe it is off-topic. But I am wondering where in stack overflow that I can ask people some suggestions for some sentences or how to write an introduction and literature review with good tension. ...
0
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1answer
122 views

Math based proof for currency changes (microeconomics)

This isn't part of my homework but I am genuinely interested in the mathematical proof behind this question (this is my line of work currently). I tried to work through it but after 2 hours gave up. ...
0
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1answer
83 views

Is there an “ideal” ratio of tax revenue to GDP? Or, at least, can I assume a higher ratio is better?

At the link below, you can see countries have a huge difference in ratios of tax revenue to GDP. Is it fair to assume that a higher ratio is better? Does raising a substantial portion of your GDP in ...
2
votes
1answer
64 views

How do you measure the MRS for more than two goods?

For two goods, the MRS is defined as the amount of one good you would trade off for the other. Mathematically, $$\text{MRS} = \frac{dy}{dx}$$ where the amount of goods $X$ and $Y$ are denoted by $x$ ...
0
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1answer
15 views

GDP Income Approach by industry: Public Administration calculation?

How is Public Administration generally considered when looking at GDP Income Approach by industry? Is remuneration of employees the main factor considered, since there is no Operating Surplus? I am ...
0
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1answer
61 views

Question Regarding Equilibrium Price & Surplus

So here's an example of a standard Supply & Demand Relationship for an Individual Supplier: As a supplier, for 1 dollar, I'll produce 1 unit of something. For 2 dollars, I'll produce 2 units, for ...
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0answers
22 views

Understanding Mortgaged Backed Security during financial crisis

This is my understanding of the mortgage backed security.Banks will give loans to customers, and then they decide to sell the loans to investment banks and charge a fee with it to earn profit. Now the ...
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0answers
12 views

What are the advantage of adding interactive variable over subsampling in drawing conclusions?

As 1muflon1 mentioned, there are two main advantages of adding interaction variables over subsampling are: (1) having higher sample size, leading to higher precision and (2) higher degree of freedom. ...
2
votes
1answer
200 views

Solving Euler Equation for standard DSGE Models

I am studying a rather standard DSGE Model with a standard Utility function $U = f(c_t, n_t, M_t)$ subject to a budget constraint. Now, tosolve the intertemporal optimization problem I have, or ...
3
votes
1answer
171 views

Is there Modern Translation Book for Wealth of Nations?

Is there a New/Modern English Translation of Adam Smith "Wealth of Nations"? I cannot locate any online, it is a great read, just trying to understand it better. The old/classical style of ...
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2answers
56 views

How to show that a strategy is a SPNE in repeated games

Consider the down below which I have trouble with solving. For part 1) I have said that a possible outcome path is to play $(D,D)$ in the first round and for all rounds following until $i \leq 298$. ...
1
vote
1answer
62 views

What kind of tax diagram can show the full consumer tax burden?

If a government increases a purchase tax on an apartment, the tax will be fully burdened by the consumer, as the "producer" will simply be the owner of the house. But in a diagram, should ...
2
votes
1answer
204 views

What are the differences between “Crawling peg” and “Crawl-like arrangement”?

The IMF AREAER 2019 classifies 3 countries as "crawling" and 18 as "crawl-like". It's not clear to me though how these classifications were made and why they couldn't be switched ...
0
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1answer
67 views

Convert USD2005 PPP per-capita GDP to USD2011 PPP per-capita GDP for a number of countries

Which conversion factor / formula should be used to convert USD2005 PPP per-capita GDP to USD2011 PPP per-capita GDP for different countries? I have found an identical question, but without a clear, ...
0
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1answer
25 views

Adding interaction and its elements into an equation confusion?

Today, when asking for some suggestions about adding the interaction variables, a commentor ask me that I should include all elements of this interaction variable to this equation: For example: My ...
0
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1answer
24 views

Total employment and floating work shifts in macroeconomics [closed]

It looks like there are some common major problems in modern economic systems when employing people to work. At first, some people stay without work in unemployment and suffer from the lack of funds ...
0
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1answer
23 views

Why is IOER so much higher than short term Treasury yields?

Interest on excess reserves is currently at 0.15%, but the yield on 1, 2, 3, and 6 month Treasury bonds are all only 0.05%. Why is this the case? Shouldn't IOER be about the same if not lower than the ...
1
vote
1answer
56 views

How does the private bank reserve increase when money is being withdrew?

The federal government raises 400 million by selling bonds to the general public in order to pay for a construction program. The program cost 440 million so the government withdraws 25 million from ...
3
votes
1answer
84 views

Decentralized Mechanism Design

From what I've read in mechanism design theory, it seems to me that the mechanism designer always plays an essential role in a mechanism. Information is sent to the designer who designs incentives ...
5
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4answers
298 views

Multi-item Auctions in Mechanism Design

I'm new to auction theory and only started reading it a few days ago. My question is this: Is it possible to design efficient auctions of multiple non-identical items? By efficient I mean maximize the ...
1
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2answers
137 views

How does a CLEC innovate?

A CLEC, competitive local exchange carrier, is described... A competitive local exchange carrier (CLEC), in the United States and Canada, is a telecommunications provider company (sometimes called a &...
0
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1answer
23 views

Does bank loan support affect companies in negative way?

I'm new to the economics exchange environment. My question may seem amateurish, but I did not find a satisfactory result by doing the necessary literature search. A question that has been on my mind ...
1
vote
1answer
29 views

Why the magnitude of coefficient of interest decrease drastically when adding an interaction variable?

When examining whether the impact of laws on Y1 differently in developed countries is to add an interaction variable pt is a variable of interest in a Differentce-in-Difference setting. pt_original is ...
0
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1answer
29 views

When interest rates are high, where does the money that banks pay to depositors come from?

I know that banks primarily make money from the 'spread', that is, people deposit their money in the bank and the bank pays them back with interest, and the bank lends that money to other people and ...
0
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0answers
9 views

Stationary vs. Non-stationary data in a BVAR model

I am replicating a paper using BVAR model and I first I have run the model with non-stationary data. Then I just wanted to compare the results with stationary data and I launched the model but I get ...
1
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0answers
15 views

Who first described/coined “velocity” of money?

Restatement: Who is responsible for originating the term “velocity” to describe the rate of money circulation? Also, who is responsible for first discussing this rate, specifically? Background: While ...
3
votes
1answer
50 views

Durbin Watson Test for an AR(1) process

$(1) y_t =\beta y_{t-1} +\epsilon_t$ $(2) \epsilon_t =\rho \epsilon_{t-1} +v_t$ Where $v_t$ is i.i.d white noise. I know that OLS estimates of (1) are biased. It would then follow that estimates of $...
0
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0answers
6 views

How to calculate price of intermediate product? [closed]

If a firm is divided into a marketing division, involved in the production of a final product which uses an intermediate product produced by a production division. The demand function for the final ...
0
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1answer
23 views

Confused why GDP/GDP growth is a good measure

I am just a lay person confused about why GDP is a good measure. For example, in the news, it is always reported that GDP grew in the last quarter etc., or China is the only country experiencing GDP ...
1
vote
0answers
14 views

How to explain the significant levels change when adding interaction variables?

@1muflon1 has a great explanation regarding the interaction variable meanings when I want to compare the laws' effect on firms' asset growth between developed and developing countries. Today, when ...
0
votes
1answer
66 views

Did Adam Smith Support a Central Bank?

Does Adam Smith and Capitalism support a Central Bank/Federal Reserve? I am trying to read through the book "Wealth of Nations" to understand. Having a central/regulatory figure dictate ...
2
votes
3answers
1k views

Do privately owned banks ever indefinitely lend money to their owners?

By privately owned bank, I mean specifically a bank that is not registered as a corporation with publicly tradable shares. Does it ever happen that such banks create money by lending it to their own ...
8
votes
1answer
2k views

What is the purpose of the local non-satiation assumption in the first welfare theorem?

The profit maximization assumption implies $$\text{if } x_i \succ x_i^* \text{ then } p_ix_i > p_i w_i$$ Okay so this just says if the agent is utility maximizing / rational, then if he doesn't ...
0
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0answers
20 views

What theory fits?

IO & game theory friends, I am thinking about a setup where there is many buyers and a decent number of sellers (they have pricing power). Goods and buyers' preferences are homogeneous and known. ...
3
votes
2answers
68 views

How do you calculate the contribution of each factor of production to the value of the final product?

How do I determine how much value that capital, labor, and land individually contributed to the value of a firm/good? Like what % of value came from capital vs labor vs land? I heard that this is ...
2
votes
1answer
63 views

What is an 'economic reason'? in relation to marriage?

I'm taking a economic course over the break and with no prior experience with economics, I'm struggling with coming up ideas for a prompt in relations to why people marry. I thought the idea of ...
2
votes
1answer
33 views

Frequency and time of a time series suddenly changed, are usual methods valid

I have a time series data that used quarterly information on a variable, but has now shifted to bi-monthly releases, from September 2008 to July 2021. This is a survey based measure, released at the ...
1
vote
1answer
53 views

Has there really been a 170% increase in M1 money supply in the US in February 2021?

tradingeconomics shows an M1 money supply of the past year as follows: This suggests an unusually high increase of ~170% in February 2021. Is this increase real or somehow an artifact of the way the ...
0
votes
0answers
19 views

Why in neoclassical growth model K* is always to the left of K gold?

In the phase diagram of the Ramsey model, the steady-state capital per capita is always to the left of the golden rule capital per capita. What does this mean? Why does this always happen?
0
votes
1answer
47 views

Is it always a trade off between efficiency and equity?

Is there any situations where we can achieve both equity and efficiency? I'm thinking of Covid 19 vaccine program which is run by Goverment. Although the cost for the program is paid by the money from ...
2
votes
1answer
74 views

Alternative way to calculate the symmetric BNE of the game

My problem. Consider the following auction for a single object. There are $n \geq 2$ bidders. They submit their bids simultaneously. The object is allocated to the player who submits the largest bid. ...

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