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0answers
5 views

How would M2 and Velocity of M2 be affected if balance sheet expansion continues long-term?

Let’s assume that the Federal Reserve does NOT discontinue injecting liquidity into the Repo market but, instead, continues a long-term policy of continuous and regular liquidity injections. Let’s ...
0
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2answers
16 views

What stops the interest rates from becoming highly negative?

What stops central banks interest from setting highly negative rates? Is it only that people can take out a lot of cash and put it in a vault, or are there other reasons? If we had removed cash and ...
0
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0answers
7 views

Can minimum or subsidies or tax cuts really work? Or will resultant inflation always counterbalance such initiatives? [duplicate]

I was born at the tail end of Eisenhower era and what is clear is that the dollar does not buy what it used to and this inflation has been more or less the trend for many decades. I have yet to hear ...
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1answer
16 views

France place in the eurozone in terms of prudence

When I think about the eurozone countires in terms of governments economical prudence I, as many, divide them into the northern prudent(Nordic+ Germany) and the less prudent southern(Grecce, Italy, ...
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0answers
14 views

Are interest rates low because of low aggregate demand? If so, what are the reasons for low AD?

Interest rates seem quite low in most of the western world and it looks like the market thinks this will last for a long time. 10-year government bonds in US, Canada, Australia, France, Japan, ...
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0answers
9 views

PPP and real exchange rate

Can someone help me with this question. It shoul be easy but i am not able to solve any of them. Thanks
1
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1answer
14 views

What happens to interest rates when they are already at (near) zero and the stock market crashes?

Let's say the global stock market crashes in the coming months (it's currently at an all time high in the western world). What happens to interest rates? "Usually", as I understand from my absolute ...
0
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1answer
37 views

Why would overemployment mean that labor is used inefficiently?

If labor is being used efficiently, there is no excess unemployment or over employment. This phrase from Khan Academy struck me as quite strange. Why on Earth would over employment mean that labor ...
2
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1answer
29 views

MWG Proposition 2.F.1

Is homogeneity of degree zero necessary in proposition 2.F.1? It seems like the proof does not assume homogeneity of degree zero to establish the proposition. If this is true, it seems that ...
1
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0answers
57 views

Experiments in Economics

Hernando de Soto in his book "The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else" describes a series of experiments in different countries, illustrating economic ...
0
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0answers
27 views

Sources to know about latest research

I wanted to keep myself aware of the latest research news and trends etc. in economics. What are some good sources (newsletters, magazines, websites etc.) for that? I did find one from Nature. How ...
0
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1answer
29 views

Why does a firm in a perfectly competitive market not need to cover fixed costs in the short run?

While studying, I came across the solution that in some cases only the produces surplus, PS, needs to be positive, however not the profit, $\pi$. That means that if $PS \geq 0; p \geq AVC$, whereas, e....
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0answers
19 views

Independent sort: Fama-French 2015

While replicating the FF-2015 Size-BE/ME-OP 32 test portfolios I notice missing values in the combination Big,BE/ME 4th quartile, OP 4th quartile. I am a bit puzzled, FF say they independently sort ...
2
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1answer
28 views

What is the purpose of multiple regression?

For instance, consider the following regression equation $College Score=\beta_0+\beta_1HighSchool GPA+u$. We interpret this $\beta_1$as the effect of a higher High School GPA holding all other ...
1
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0answers
25 views

Shortcuts for elasticity of substitution

How can I find the elasticity of substitution (I know the definition) if I know the utility function $u(x,y)$? I know its increasing in $x$ and $y$, etcetera, and has everything else you want from a ...
0
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0answers
15 views

Calculate profit when trading between more than two goods

When trading two goods (or currencies) it is relatively easy to say if you are making profit when you know the exchange rates. For example Person A trades Bananas for Person B's Apples. Person A gives ...
1
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2answers
48 views

Mathematic notation of scale returns

I'm having trouble with returns to scale mathematical notation which i found counterintuitive even I'm fine with its definition. Any help will be very appreciated. There are three possible types of ...
0
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0answers
11 views

Deprivation vs. Marginalization

I see many studies of poverty use 'marginalization' and 'deprivation'. What are the difference between them?
1
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1answer
25 views

Fixed costs in the long run

Can anyone please help me understand how fixed costs in the long run are zero? In Microeconomics by J. M. Perloff, the author gives the example of a factory's rent and says that if we are talking ...
-1
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1answer
27 views

Economic move from agricultural to manufacture to service in ?what after service sector?

is there anything after service sector .in oecd nation most of employment in service sector.is there anything like post service world.
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2answers
40 views

Why is oil being traded in U.S. dollars?

I am trying to understand the concept of money,forex, depreciation of currency,devaluing,...(just the basic stuff). While I was reading about why oil is being traded in U.S. dollars, on the internet, ...
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0answers
23 views

How cheap is Gold?

It's possible to measure how cheap stocks are, because we can compare asset price to its output. $$Rate = {Revenue \space \over Capitalisation}$$ And then at any given moment we know how cheap ...
0
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0answers
13 views

Does combination of sticky prices and stagflation lead to redistribution of wealth?

Suppose there is inflation in our country, but some prices are sticky and there is non-positive "growth" of the real GDP. In other words, we experience stagflation. If I understand correctly, non-...
0
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1answer
48 views

Do I understand correctly that taxation-based government expenditures allow GDP to grow?

Suppose (it's an example) GDP= $1 000 000, Marginal Propencity to Consume(MPC)=0.25, that borrowing money is an absolute taboo for our government and that said government wants to increase GDP. What ...
3
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1answer
26 views

Does one include inflation when computing elasticity?

I am attempting to compute the price elasticity of a good with the help of a time series, and am unsure whether to correct the prices for inflation. Is there a standard argument for one or the other ...
0
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0answers
27 views

On shapes of indifference curves

I encountered this question in Microeconomics by Pindyck and Rubinfeld. The question says that "Suppose Jones and Smith have each decided to allocate $1000 per year to an entertainment budget in the ...
1
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0answers
21 views

Is there evidence that non-profits might have a tax or other competitive advantage in competing with for-profit corporations?

Lets say my non-profit's interest is to diminish co2 emissions in the city. Are there useful forms of putting that tax money for better use and gaining competitive advantage against other for-profit ...
0
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1answer
28 views

Equations of “rational mechanics” and general equilibrium

Vilfredo Pareto, referring to the equations that determine equilibrium, wrote: These equations do not seem new to me, they are old friends. They are the equations of rational mechanics. This ...
2
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0answers
12 views

Capital Recovery Factor for Hyperbolic Discounting

I'm looking for a closed-form capital recovery factor when hyperbolic discounting is used. The Wikipedia article on hyperbolic discounting has this formula for the "present value of a series of equal ...
0
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0answers
8 views

Finding data on (estimated) trade cost elasticities of imports

I'm an undergrad student of economics, and I need to find estimates of the trade cost elasticity of the UK's imports for some homework. My instructors pointed me to the World Bank's databases, ...
0
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0answers
26 views

elasticity in economis is different than elasticity in physics? [closed]

Elasticity in economics : "Elasticity is a general concept which basically means how sensitive one quantity is with respect to some other quantity." (this is from an answer here), so it's like how far ...
1
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0answers
15 views

Why should government bonds have been a part of FSB rules on repo markets?

Since the financial crash, reforms have been made by the FSB, I would like to know why there is the opinion that government bonds should have been part of FSB rules on repo markets
3
votes
1answer
39 views

Contract curve and Pareto frontier

Consider an exchange economy with two agents. Each agent $i \in \{1,2\}$ derives utility $u^i(x_1,x_2) \in \mathbb R$ by consuming $(x_1,x_2) \in \mathbb R_+^2$. Let $u_j^i(x_1,x_2) = \partial u^i(...
0
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0answers
18 views

What will be the additional investment?

I recently encountered upon this question: Suppose, in an economy,autonomous consumption is Rs 100 crore and autonomous investment is Rs 60 crore. Imagine that in this economy,with every increase in ...
-3
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0answers
20 views

Calculate the national income aggregates [closed]

In a single day Rehan, a barber,collects Rs 500 from haircuts ,over this day,his equipment depreciates in value by Rs.50. Of the remaining Rs 450,he pays sales tax worth Rs 30,takes home Rs 200 and ...
3
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0answers
45 views

How much should it cost to close the beach?

For most of the past week a private surfing contest has closed off Steamer Lane - one of California's most popular waves - while paying only a few hundred dollars in permit fees. I think this is far ...
0
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0answers
20 views

Cost of living index

Say you have a cost of living index based on the dollar for each state. Such as this one: https://www.forbes.com/sites/chuckdevore/2019/08/06/when-is-a-dollar-not-a-dollar-states-and-the-cost-of-...
0
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1answer
23 views

Budget Constraint in Utility Maximisation Problem with Lagrange Multipliers

Lets say we have a utility function $U: \mathbb{R}^{2} \to \mathbb{R}$ given by $U(x,y)$ and a binding budget constraint $p_{x} x + p_{y} y = m$, where $p_{x}, p_{y}$ are prices of goods $x,y$ and $m$ ...
0
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1answer
14 views

Annual Fraud Recovery Over Time: Should I adjust for inflation?

I have a dataset of the total amount the U.S. Department of Justice obtained annually in settlements/judgments of government fraud cases from fiscal years 1988-2019. There's a lot of variation, but ...
2
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0answers
6 views

When does the interest rate parity curve shift?

Given the IS LM IRP model, can somebody tell me the difference for when there is a movement along the IRP curve and when there is an actual shift in the IRP curve?
0
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0answers
13 views

How to calculate the multiplier in an open economy?

So suppose there is an open economy were only the goods market exists: C=0.6(Y-T) T=0.25Y Imports=0.2Y exchange rate=1 exports=0 Investment and government spending added up together=6. How to you ...
0
votes
1answer
27 views

In a production function, the technology can vary across the firms and times. But the “power” must be same for the same industry?

Let $F_t=A_tK_t^\alpha L_t^{1-\alpha}$ be the production function with two parameters. In regression, we know the firm level $F_t$, $K_t$, and $L_t$. We want to estimate $A_t$ and $\alpha$. I've ...
0
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1answer
26 views

For the case of two goods, give an example of preferences that are represnted by a continuous utility function that allows for fat indifference curves

The question in the title sounds like a trick question, due to the monotonicity property that indifference curves have, such that for two goods x and y, strong monotonicity implies y > x. Possible ...
1
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1answer
42 views

Algorithm to find Bayesian Nash Equilibria

I am working on a Bayesian game with a finite number of players and discrete types, but the complexity of the equations is not allowing me to find the BNEs by hand. I read a paper describing ...
0
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1answer
16 views

In the Cournot Duopoly Model,why is the Equilibrium achieved at 1/3 Rd of the Market Share?

I've been reading it for a while,while I do get the action reaction movements,I can't understand as to how the 1/3rd value was reached. Can anyone intuitively or mathematically explain as to how it's ...
3
votes
1answer
35 views

Why don't researchers use regularized probit model?

I know that a regularized logistic regression can be done to reduce training error, but I haven't found any economics research that uses a regularized probit model, only a regular probit model from ...
1
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0answers
8 views

Reference request: modeling firms that act to create demand for their products

(I don't have an economics background; apologies if my terminology is confusing.) It seems like there is often a situation where a firm can take actions to create demand that did not already exist. ...
1
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1answer
35 views

Is there any overlap between evolutionary and behavioral game theory

Evolutionary and Behavioral game theory are two different techniques. Both seem to be inspired from biology. So is there any overlap between their theory? Are the two complementary to each other in ...
0
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1answer
25 views

How are low/middle/high classes defined mathematicaly?

I am only looking for mathematical references. I think this belongs to econometrics but am not sure nor where to look at it specifically. I suspect the definition is given with some kind of weighted ...
-1
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0answers
14 views

dynamical system of consumption nontrivial steady state [closed]

Consider the following dynamical system of consumption (ct) and wealth (wt). ct+1/ct = 1 − β(ct/wt − α) wt+1 + ct = θwt + γ Here, all Greek letters denote fixed structural parameters that are ...

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