# All Questions

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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 ...
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 ...
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. ...
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?
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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 ...
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 ...
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### 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 ...
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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### 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?
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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### 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 ...
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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### Is Bayes correlated equilibrium relevant for dynamic games?

Consider the following classification of solution concepts ...
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### 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 ...
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 ...
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### 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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### 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);...
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### 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 ...
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### 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 ...
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 ...
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### 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 ...
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 ...
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### 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 ...
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### 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 ...
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### 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) = \...
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### 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 ...
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 ...
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### 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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### 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 ...
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### 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 ...
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' ...
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### 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 ...
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### 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 ...
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### 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?
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### 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 ...
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### 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 $\forall t, n_i=0,i\neq j$. ...
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### 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.
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### 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 ...
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### 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 ...
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### 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 ...
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### 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 ...
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### 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?
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### what are the advantages of using Canonical Cointegrating regressions?

What are the advantages of using Canonical Cointegrating Regressions in comparison with OLS regressions? Thanks.
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### 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 ...
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### 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 ...
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 ...
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### 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 ...