All Questions
15,504
questions
3
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1
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25
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In revealed preference (RP), is any two points $x,y$ related by the indirect revealed preference relation?
Let $X$ be the closed compact convex set of alternative and $B$ be a closed compact convex subset of $X$. $C$ is defined on all closed compact convex set $B\subseteq X$.
$X$ is ordered by a strictly ...
- 11.7k
1
vote
1
answer
49
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Scale-Dependent Demand Curve
Setup: Say I have a store and I have 50 bottles that I want to sell. Outside this store there are 100 people who want water bottles and each differs in the price they are willing to pay for a water ...
CommunityBot
- 1
0
votes
0
answers
12
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Is it possible to maintain economic equality in a society?
If the governor (or administrator) of a small town decides to keep the town economically equal by taking away the wealth of all residents and then redistributing it equally among the residents. In ...
- 1
0
votes
0
answers
7
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Long Run Model of Oligopolies After Recession
I am currently investigating about the long run impact of the COVID 19 to the US airline industry. Is there any specific (long-run) model that I can use for oligopolies (for 4 main companies)? Because ...
0
votes
0
answers
20
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Heterogeneity analysis for a randomised experiment
Suppose that you are planning a randomised experiment and will estimate how effects vary with baseline covariates. One simple approach uses interactions. That is, if $Y_i$ denotes the outcome of ...
- 856
0
votes
1
answer
64
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How to show there is no a Walrasian equilibrium?
There are 3 agents, one seller and two buyers. There are two indivisible goods, apple(a) and banana(b), and one divisible good, money(m). The seller's endowment is $W_s=(1,1,0)$, and buyers's are $W_{...
- 8,246
1
vote
1
answer
28
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Conditions for an interior solution to the UMP
I was wondering under what set of conditions one is allowed to assume an interior solution to the Utility Maximisation Problem. In most of my classes and lecture notes, interior solutions are assumed ...
- 11.7k
0
votes
1
answer
73
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Why does the Substitution effect always have to be negative?
I understand why the income effect can be positive or negative depending if the good is normal or inferior. but why does the substitution effect always have to be non-positive?
- 8,246
1
vote
1
answer
50
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If utility function is convex, what can be said about preference relation?
It is known that if a utility function is concave, then it is quasiconcave, and the preference relation is convex.
What can be said if a utility function is convex?
I've found on the Internet then in ...
- 28.7k
0
votes
0
answers
4
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Ordered Logit Model: Marginal Effects Signs Opposite
I'm deeply stuck in an issue in my research paper's methodology. I'm getting the following disparate results for my marginal effects.
In my Ordered Logit model, I have Y = Trust in banks (4-Max trust,...
- 1
1
vote
2
answers
95
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Real wages fluctuation as per classical economics
I have just started studying Macroeconomics and have noticed that as per the Classical economics, the real wage level will always remain same because any change in price level in the market is ...
CommunityBot
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2
votes
0
answers
24
views
Why does the voter paradox entail 0 turnout?
The decision to cast a vote (under a simplistic FPTP two-candidate model), as formalised by Downs can be written as follows:
$pB \geq C$
where $p$ is the probability of you changing the outcome, $B$ ...
2
votes
0
answers
19
views
Find a choice function such that WARP or SARP is violated
WARP implies choice function is raionalizable.
Say we have a choice function $C(B)$, $B$ is a closed convex compact set. I am looking for a intuitive example of $C$. The $C$ is economic meaningful, ...
- 1,866
3
votes
1
answer
26
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What is the issue in mapping verbal concepts to math symbols without proper justification, in economics?
I am really sorry for the vague question. I was going through some research on excessive math in economics, and I stumbled across this thread Criticism of Math in Economics
One of the comments was - &...
- 28.7k
0
votes
0
answers
14
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Good tutorial on constrained optimization with state switching (macroeconomics)?
I am looking for some tutorial (website, book, video or even answer that explains it directly) that explains how to solve dynamic constrained optimization problem with state switching. Preferably the ...
- 242
2
votes
0
answers
21
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A question about an exercise in Hal R. Varian, Microeconomic Analysis (1984), Ch.3 Exercises 3.1 (c), Page 48
I have a question on the following exercise:
A competitive profit-maximizing firm has a profit function $\pi(w_1, w_2) = \phi_1(w_1) + \phi_2(w_2)$. The price of output is normalized to be 1.
(c). ...
- 65
3
votes
1
answer
351
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Is there any evidence that socialist systems are/ were constrained by capitalism and this is the main cause for its demise?
Following the definition of socialism by Oxford dictionary. Socialism
a set of political and economic theories based on the belief that everyone has an equal right to a share of a country’s wealth ...
0
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0
answers
4
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Can I use secondary data to run LA AIDS model in R
Can the Almost Ideal Demand System analysis be done using secondary data
0
votes
2
answers
354
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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) ...
CommunityBot
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1
vote
1
answer
29
views
If SRAS decreases, does nominal GDP increase or decrease?
A decrease in SRAS would decrease real GDP, as producers would stop producing as much for whatever reason. This would also cause inflation, though. So what net effect does this have on nominal GDP? Is ...
CommunityBot
- 1
0
votes
1
answer
220
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Why does Metro (AG) not allow to shop for everyone?
Why does the Metro wholesale allow to shop only for business persons and not to everyone? Do they have some limitations from anyone and why? They will make more money if everyone could shop there.
CommunityBot
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-2
votes
3
answers
121
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Why raising the interest rate does not lower the inflation in the short run?
As raising the interest rate immediately effects the mortgages payments, households will have less money to spent on other goods, which will cause lower profitability of manufacturers and businesses. ...
- 62
1
vote
2
answers
57
views
Switching from one-unit IRF to one-standard-deviation
I'm manually calculating the IRF of a VARX. I calculated the IRF to a unit-shock to the independent variable. Now I want to switch to a one-standard-deviation shock.
Do I multiply the resulting one-...
- 1
1
vote
1
answer
31
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Analysis of seasonal adjustments and moving averages: seeking guidance
I'm looking to seasonally adjust the price data I have using a moving average with a 12-month window size. As window 12 is being used, the first 11 values in the 'Oil_adjusted' column are being filled ...
CommunityBot
- 1
0
votes
1
answer
28
views
Can FOSD-transitivity replace the transitivity in utility representation theorem?
Let $\succsim$ be a complete, non transitivity preference relation. I wonder if FOSD-transitivity implies transitivity.
The primitive is the space of lotteries $p_1,p_2,p_3,...$. We say the preference ...
- 10.3k
2
votes
2
answers
101
views
Empirical relation between interest rate and stock market performance
Disclaimer: Originally I asked this question on the personal finance site (see here) where it was (rightfully) closed since it does not directly relate to personal finance but is rather a general ...
CommunityBot
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1
vote
1
answer
110
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About Theorem 1.1 (the Expected-Utility Maximization Theorem) in Game Theory: Analysis of Conflict by Roger Myerson
I am self-studying game theory using Myerson's Game Theory: Analysis of Conflict. I got some trouble understanding his proof of Theorem 1.1, the Expected-Utility Maximization Theorem. The Theorem goes ...
- 251
3
votes
1
answer
3k
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How do countries create their own currencies (and give them meaningful value)?
Regardless of why they'd do it, what do countries do to make their own currency, replacing the old one, and give their new one value?
I sorta get how it works, but this kind of economics is still ...
- 1
1
vote
1
answer
55
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Equilibrium of Perturbed Dollar Auction Game - An Example from Game Theory: Analysis of Conflict by Roger Myerson
I am studying game theory using Myerson's textbook (Chapter 3 - Equilibria of Strategic-Form Games, Section 3.6 - The Decision-Analytic Approach to Games). I have difficulties understanding and ...
- 28.7k
0
votes
0
answers
31
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how to derive that golden rule steady state = alpha in the solow model?
I have successfully derived the Golden Rule steady state for capital, but I'm struggling to derive the saving rate = equal to alpha (α) for the Golden Rule level. Have I made an error in my ...
- 28.7k
4
votes
3
answers
439
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Loans that don't have to be paid back (only the interest)
A normal loan has to be paid back with interest. Every now and then there are interest-free loans where only the loan has to be paid back but no interest, e.g. among relatives or friends, but also as ...
3
votes
1
answer
265
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Does development aid, negatively effect the development of developing countries?
Development aid
Development aid or development cooperation (also development assistance, technical assistance, international aid, overseas aid, official development assistance (ODA), or foreign aid) ...
CommunityBot
- 1
0
votes
2
answers
467
views
annualized quarterly growth rate calculating
I was using R to calculate the annualized quarterly growth rate of real GDP by 400*diff(log(rgdp)).
If I perform in this way some of the percentage change is big.
However, if I calculate as 100*diff(...
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0
votes
1
answer
21
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Internationalization of Chinese Yuan, and Chinese exports?
If Chinese Yuan is internationalised and more countries use it to settle payments, then wouldn't that cause strengthening of Chinese Yuan and make Chinese exports uncompetetive ?
- 1
0
votes
0
answers
36
views
Variance of OLS Error Variance Estimator
Consider a model $Y=X\beta+e$ and define the OLS error variance estimator as $\hat{\sigma^2}=1/n\sum_{i=1}^n \hat{e}_i^2$, assuming that $ E[e_i^2]=\sigma^2 $ More precisely I want to derive the ...
- 2,270
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0
answers
56
views
Who is a personal computer buyer in 80s?
There are many materials devoted to the rise of the personal computer industry. Some of them focus on technic aspects. Like "IBM PC was cheap and has open arcitecture. So it won Atari, Commodore ...
- 153
2
votes
1
answer
204
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What's the highest percentage of output any country spent on its military?
I was surprised that in 1941:
American military spending accounted for 2 per cent of it's national output. Compared to Japan's 70 per cent.
70% seems incredibly high, especially given people still ...
CommunityBot
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1
vote
1
answer
57
views
Federal Reserve Stock Ownership Requirement for Banks
Why are banks required to own stock in the Federal Reserve?
CommunityBot
- 1
1
vote
1
answer
26
views
Trouble Understanding Government's Financial Databases
What does the code field mean in the state of Illinois's financial data?
CommunityBot
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0
votes
0
answers
63
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About Theorem 3.5 (The Finite-Approximation Theorem) in Game Theory: Analysis of Conflict by Roger Myerson
I am study infinite strategy set using Myerson's Game Theory textbook. The author stated the following theorem (Theorem 3.5) but did not prove it. I tried the proof, and would really appreciate it if ...
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0
votes
1
answer
31
views
Can a Subgame Perfect Equilbrium consist of a weakly dominated action?
I was reviewing the Market Entry game and observed that 'being mean to the entrant' is weakly dominated by 'being nice to the entrant.' Coincidentally, 'being nice to the entrant' is also part of the ...
- 28.7k
0
votes
0
answers
23
views
Why has the price of laser eye surgery not changed?
Within the USA, I have long heard rumors that since laser eye corrective surgery is not often included in insurance plans or subsidized by governments, the price of laser eye has remained relatively ...
- 91
0
votes
1
answer
42
views
Ramsey model problem
Explain the no-Ponzi game condition throughout the function.
Does the constrain function: also reflect include the No-Ponzi condition?
CommunityBot
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1
vote
1
answer
13
views
What is the meaning of "Nominal GDP was converted to 2021 dollars using the GDP Price Index" in ERP 2023?
Reading the Economic Report of The President 2023, there is a note under the real GDP graph stating: "Nominal GDP was converted to 2021 dollars using the GDP Price Index"
What I understand ...
- 54.4k
1
vote
0
answers
22
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Deriving the tax incidence formula -- what am I doing wrong?
I'm trying to derive the tax incidence for an excise $t$ so that producers receive $p$ and consumers pay $q=p+t$ per unit. The formula I am seeing everywhere is some version of
$$
\frac{\mathrm{d}p}{\...
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0
votes
1
answer
31
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Deadweight loss and consumption externalities
here's the problem and my solution so far:
In this case, the Marginal Private Benefit (MPB) is given by the
equation MPB = 100 - 4q and the Marginal Social Cost (MSC) is given by
the equation MSC = ...
CommunityBot
- 1
0
votes
1
answer
45
views
Deriving Unit cost function
Unit cost function is the minimum cost to produce one unit of output.
The solution to the above problem is:
where ai(w,r) is the amount of labour needed to produce 1 unit of good i at factor prices (...
CommunityBot
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1
vote
1
answer
50
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Does a per-unit tax shift the demand curve too when dealing with an inelastic supply curve?
I’m studying Tax Incidence from Stiglitz’s ‘Economics of the Public Sector’, and it says that the tax incidence doesn’t change whether I use a shift in the demand curve or one in the supply curve. ...
CommunityBot
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1
vote
0
answers
37
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What is a very very famous example of structural estimation?
I took a behavioral econ class and learnt the "structural estimation" of risk-aversion parameter.
Later some friends told me that what I learnt is too simple when I was bragging about my ...
- 259
1
vote
0
answers
40
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Durable goods in a (two sector) necolassical growth model
i want to add a firm to a neoclassical growth model that produces a durable good which it rents out in each period to the consumers.
Right now i'm using the following approach:
The firm maximizes: $\...
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