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7 views

How does interest rate impact exchange rate?

When I’m using the forward exchange rate formula based on non-arbitrage theory, it tells me that a positive interest rate spread (i_domestic > i_foreign)would cause the forward exchange rate(units of ...
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0answers
14 views

Derivation of aggregate demand function for Monopolistic Competition (based on Combes et. al, 2008)

A specialized question for those, who excel in monopolistic competition and modern trade theories. I am interested in a derivation of an aggregate demand function for a model of monopolistic ...
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0answers
3 views

Retained Earnings and the Income Approach to GDP calculation

One of the 3 approaches to calculating GDP is the so-called income approach, which states that total income (distributed as salary/wages, interest payments, and dividends) should equal total output. ...
-1
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0answers
10 views

The range of inflation dwindles means?

Basically, inflation has been a challenging aspect of policymaking in India because of its level (i.e., range in which it dwindles) and stability (how stable it has been). Here dwindles means what?
0
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1answer
20 views

Does a trade union of YouTubers exist?

Would YouTubers see a sense in having a trade union? For example, to establish policies how much the value of their contribution is. The controversy here is, professional YouTubers make a bet for ...
0
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0answers
8 views

How is hyperinflation categorized, and how is it fixed?

I have a few questions about hyperinflation that I’m really curious about: I learned there are two types of inflation - demand pull and cost push. I was wondering if hyperinflation fits into the ...
0
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1answer
10 views

How is India able to increase its foreign exchange reserves despite historically running a trade deficit?

Balance of Trade: https://tradingeconomics.com/india/balance-of-trade Foreign Exchange Reserves: https://tradingeconomics.com/india/foreign-exchange-reserves
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0answers
14 views

Performing good forecasts for the GDP

What forecasting models would you recommend to forecast the GDP? Through a quick research I have found that VEC, VAR, SVAR models are the most common. Are they though good forecasters? Or are they ...
5
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2answers
38 views

Why do some businesses choose scarcity as their business model instead of raising the price to meet the demand?

Here are some examples of what I'm talking about: Mass events such as Burning Man, the Olympics, and the World Cup sell out tickets very quickly which forces fans to resort to scalping or using bots ...
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0answers
13 views

Why does every blockchain have its own cryptocurrency?

Why can't they all use the same cryptocurrency like Bitcoin? Why do they have to invent a new cryptocurrency?
3
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0answers
19 views

What changes do I, as an individual, experience during a recession?

There is a lot of talk about how we're approaching an economic recession. There is plenty of talk about how that would affect the world at large, but I haven't really found much on the level of ...
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0answers
4 views

What are the factors on which value of all resources ( good, silver, cash land etc. ) found in world changes over time?

And followed by, Does it right to say that, if any country become rich then other must become poor and vice-versa. If no, then Is it possible that, in certain conditions, all Nation in the world can ...
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0answers
9 views

the question focuses on slutskys equaiton

.51 Consider the utility function, u(x1, x2) = (x1)1/2 + (x2)1/2. (a) Compute the demand functions, xi(p1, p2, y), i = 1, 2. (b) Compute the substitution term in the Slutsky equation for the effects ...
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0answers
16 views

Is Bayes correlated equilibrium relevant for dynamic games?

Consider the following classification of solution concepts ...
2
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0answers
27 views

How far must one reason up the belief hierarchy?

In games of imperfect information, one must reason about the belief on the state of nature, the beliefs of other player's beliefs of their beliefs, and so on. This is referred to as the belief ...
2
votes
2answers
43 views

Why is consumer surplus the area under the curve?

So I understand that the definition of consumer surplus is the difference between what the consumer pays and what the consumer would have been willing to pay. I just don't understand why the consumer ...
1
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0answers
16 views

Regarding Macroeconomic Models

I've recently started my PhD and upon looking at my textbook (the sargent one) I found that it differed greatly from my Masters textbook (Romer) and in turn my undergraduate macro text (williamson). ...
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0answers
7 views

Acquiring a company :: How to treat working capital

I would like to know if you can help me in a valuation that I am currently working on. Problem framework: -I am valuating company A, which will acquire 100% company B with a 8x ebitda multiple (10M);...
1
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0answers
31 views

Is the set of optimal strategies convex in a single-agent decision choice problem?

EDITED with insights from the comment below. Consider a decision maker who has to choose an action among $\mathcal{Y}\equiv \{1,2,...,L\}$. The payoff from choosing action $y\in \mathcal{Y}$ depends ...
6
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0answers
37 views

Causes of trade deficit: Multiple views

I am trying to understand the causes and macroeconomic implications of running a trade deficit in the United States, and I came across a few different views on this topic. I'd like to know if there ...
1
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0answers
10 views

Difficulty Understanding CPI (Consumer Price Index)

Here's a question about CPI in my microeconomics text (Pindyck), which I don't seem to understand: The price of computers has fallen substantially over the past two decades. Use this drop in price ...
0
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0answers
10 views

Reference Request: The Effect of Wealth in Society

I am new to the subject and I am looking for some help. It goes without saying that the economy is the center of society, and the theory of economics deals with that, But I am especially interested ...
1
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1answer
41 views

Is it bad for the economy of a country if forreign firms buy companies?

If a forreign firm buys a company. For example a Russian firm buys a British company. Is this good or bad or neutral for the British economy? As I see it, the profits of the company will be going ...
0
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0answers
12 views

How can I calculate NPV and IRR in this case

Assume that my project has initial investment is 3.000, but the construction period will span 3 years, each year cost 1000. Then in next 5 year the project will generate 2000 for each year-end. So ...
1
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0answers
13 views

Is expensive private school a rational investment?

In Australia, successive conservative Federal governments have increased the share of public funding for non-government schools, and for the top schools the amounts of annual funding are many millions ...
3
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0answers
21 views

What is the difference between a power law exponent and the Pareto exponent?

I used the poweRlaw package in R to fit a power law to my data. I am trying to figure out what is the value of the Pareto exponent. Assume the probability mass function is defined by: $$ p(x) = \...
0
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1answer
35 views

How can the replacement level fertility be 2.1 everywhere in the world?

Common sense would indicate that the replacement level fertility of Norway ought to be lower than that of Sudan due to fewer children dying there. Why, then, is the replacement fertility rate ...
1
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0answers
11 views

Terminology for t statistics using cluster robust standard errors

When reporting regression results I typically have put "robust standard errors in parentheses" below or "cluster-robust standard errors in parentheses" when appropriate. In this particularly paper, we ...
2
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1answer
34 views

Trembling hand perfection and weakly dominated strategies

It is well known that players cannot use weakly dominated strategies in a trembling hand perfect equilibrium. My question, however, is a little different: does iterated deletion of weakly dominated ...
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0answers
13 views

Differences between GVA and NVA?

I have studied these 1) Gross value added= value of output- intermediate consumption. 2) Net value added= gross value added- depreciation. But how could we say "Net value added = Gross value of output ...
0
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0answers
4 views

Sources of data for GDP and BoP accounts

When an American buys a coffee within the US, how does that 3.50 dollars worth of consumption expenditure make it's way to the US GDP account? Is the information obtained from the company's tax ...
0
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0answers
27 views

In this price model, employment grows with higher wages. Makes no sense

Using a Sraffian price model we have that, $p=(1+r)(pA+wl)$ where w (nominal wage rate), r (average profit rate) are scalars; p (market prices), l (labor input coefficients) are vectors; A (producers' ...
0
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0answers
17 views

Why people set expectations for economic data beforehand?

For lots of economy/finance-related data, usually there is an expectation, and then people will compare the real data (when coming out) with the expectation, to see if it beats or misses the ...
1
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0answers
24 views

Why a Current Account deficit implies a Financial Account surplus

Every macro textbook out there states that if a country has a Current Account deficit, it must have a surplus in the Financial account, but I have not heard a convincing explanation. Imagine a ...
0
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0answers
25 views

Which assets beat the injection of money and why?

Suppose a world in which every year $1.03 ^ Y$ liquidity is injected. Which assets could perform better than 3% per year? Growth forecasts for these?
0
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0answers
10 views

Corporate finance - capm beta estimation

I want to solve the following problem as an exercise to test my understanding of the capm material: Assume that CAPM is valid. The market portfolio consists of 3 stocks such that $i = A, B, C$ with ...
1
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0answers
14 views

One Treated Unit That Becomes Untreated

Suppose I have a set of units $n_i, i = 1,...,N$. One unit was receiving a treatment $n_j = 1$ at times $t=1$ to $t=\tau$. All other units never received the treatment so $\forall t, n_i=0,i\neq j$. ...
-1
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0answers
12 views

How to represent game in Bayes normal form? [on hold]

[ I don't seem to get right the representation of the game in bayes normal form.
0
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0answers
17 views

Understanding lognormal distribution of stock prices

I am trying to understand how to correctly use the lognormal distribution. Let's say I have a list of Adjusted Price of a stock, I know that its daily returns is ...
0
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1answer
23 views

Why does the inverted yield curve occur with US Treasury securities?

I have also thought that US securities were considered nearly risk free as the government will almost always pay them back. So why is it the case that investors view short term securities as more ...
1
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0answers
9 views

Where does the current debate stand on passive vs active monetary policy?

The debate between active and passive monetary policy is mentioned in most macroeconomics textbooks. Where does the current debate stand? Has a consensus been reached among economists? Do economists ...
2
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1answer
33 views

Opportunity Cost effect on benefits

My question is the following: Let's say a person has two career choices. He would be succesful in both, but in one of them he is slightly better and thus he will do better. So let's say career A will ...
-1
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0answers
17 views

If China stopped exporting in USD, what would happen to the economy? [on hold]

If China stopped exporting in USD, what would happen to the economy? What would be the effects in US economy, China economy and Latin America economy?
0
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0answers
3 views

what are the advantages of using Canonical Cointegrating regressions?

What are the advantages of using Canonical Cointegrating Regressions in comparison with OLS regressions? Thanks.
-1
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1answer
24 views

Currency Devaluation - As a Means of Paying Off Debt

From https://www.sapling.com/8117368/debt-handled-currency-devaluation: Currency devaluation will not only affect consumer debts, but it will affect how a country pays back its national debt. If a ...
0
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0answers
9 views

Savings as far as an individual is concerned [on hold]

If I have a savings of 1 million usd at an age of 46. Is it enough if the returns are at 6.5-7% on a conservative side. I have 2-3 houses in my home country and have bought a flat abroad . I have a ...
-1
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2answers
33 views

Consumer's side and producer's side

GDP gives the picture from the consumers’ side, while GVA gives the picture from the producers’ side. By definitions of both GDP and GVA "the amount of goods and services PRODUCED in an economy in a ...
-1
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0answers
64 views

Determination of Value of gold by share markets of India

How value of gold is determined by the share markets of India? Are the following factors responsible? profits and losses of the companies gold loans purity genuine gold price share and stock ...
0
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0answers
6 views

In search for a simple mental bayesian model

I have read many articles about Bayesian thinking. Most of the time, they fall under 2 categories (or a mix of both). The first category of articles focuses on Bayes’ formula. The second category of ...
1
vote
1answer
13 views

Interpretation of the World Bank's definition of Portfolio equity inflows

The following is the definition from World Bank: Does it imply that apart from FDI, portfolio equity includes net inflows from equity securities including shares, stocks, depository receipts and ...

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