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88 views

Simple Neoclassical Growth Model with Elastic Labor and Non-Standard Capital Adjustment Costs

I have the following social planner problem to maximize $\{c_t, k_t, n_t \}$ $\begin{gather*}E_0 \sum_{t=0}^\infty \beta^t U(c_t, 1 - n_t), 0 < \beta < 1\end{gather*}$ subject to $\begin{...
3
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1answer
28 views

Data: Vacancies in the US before 2005

Shimer (2005) says These [separation shocks] introduce an almost perfectly positive correlation between unemployment and vacancies, an event that essentially never been observed in the United ...
2
votes
0answers
54 views

Capital asset pricing model (CAPM) applied to countries

I'm struggling on trying to find a beta for an equially wighted profolio for three countries (A, B,C). All the data I'm given are montlhy retunrs of each countrys ...
1
vote
1answer
48 views

If strict preferences map onto $\Bbb{N}$ what do weak preferences map onto?

Suppose I have $$\text{apples} \succ \text{pears} \succ \text{pineapples}$$ I can map this onto the natural numbers as follows $$\text{apples}\mapsto 1$$ $$\text{pears}\mapsto 2$$ $$\text{pineapple}...
1
vote
1answer
159 views

Relationship between Revenue-Elasticity and Price-Elasticity

I have attempted to solve this problem and would be grateful if someone looked over my solution 5% increase in price results in 5% decrease in total revenue. I need to determine price elasticity of ...
0
votes
1answer
84 views

Perfect competition profits question

Market is supplied by: 50 competitive companies all of them have relatively low costs given by an equation $C_l(q)=350+2q+q^2$ and by n companies of higher costs given by an equation $C_h(q)=400+2q+q^...
1
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1answer
106 views

Equality, Taxes & Business Growth

First, I'm not an economist - just a regular Joe interested in a small part of the subject. Second, I apologize if this is a better question for the 'politics' stack exchange, but I figured I might ...
2
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0answers
48 views

Separation shock and business cycles

In the context of the Diamonds-Mortensen-Pissarides models, there was a reasoning why a separation shock cannot fit business cycles. I think it was brought forward by Shimer, but I could be wrong. ...
4
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2answers
3k views

Monopoly pricing under constant elasticity of demand

While reading Ch. 24-Monopoly from Intermediate Microeconomics by Hal Varian (8 th edition), on pg. 441, he writes that a monopolist will never choose to operate where the demand curve is inelastic. I ...
1
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1answer
79 views

Can government and people spend money foolishly be a main cause of inflation?

Can government and people spend money foolishly be a main cause of inflation? For example if the the arm race happen in two country unwisely, two country will be focus on a military product instead ...
2
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1answer
114 views

What are the widescale economic ramifications of people holding onto their money instead of spending it?

Pretty simple question: people get rich by saving more money than they spend. What are the implications of people holding onto their money instead of spending it? Do rich people save more money (...
2
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0answers
39 views

Why is the New Zealand dollar on parity with the Australian dollar?

The New Zealand dollar has reached parity with the Australian dollar for the first time in more than forty years. The question is - what are the economic factors that have caused this?
6
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2answers
887 views

What does a supply+demand curve look like for fare evasion?

Consider the demand curve for fare evasion on a train. The price (I suppose) would be the average amount of money paid per ride in fines, and the quantity would be the average number of fare evaders ...
4
votes
1answer
116 views

Why is the term structure curve of agricultural commodities often downward sloping?

I have retrieved the below term structure curve for livestock (lean hogs) from Bloomberg and noticed that it is inverted. I have a vague intuition that this has to do with the storage costs and ...
6
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4answers
1k views

Are billboards beneficial for the economy? Why?

Billboards cost money to make and don't really seem to significantly benefit anyone other than billboard-makers. A company c putting up billboards presumably increases profits from the resulting ...
2
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1answer
4k views

Negative Gini Coefficiente?

Is it possible to have a negative gini coefficient? In which situations is it possible? Any help would be appreciated.
3
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1answer
97 views

How to find the long-run relationship using this regression (3rd time posted)

This is an old exam question I can't figure out. I thought to find the relationship you would sum the coefficients on the Ys, so it would be 0.80 + 0.70 - 0.10, giving you C = 1.4Y, but this isn't ...
2
votes
1answer
98 views

The most frequent causes of economic downfall?

In retrospect what are the major parameters, most frequently causing countries' economy to reduce its size and/or growth. Global Financial Crisis? Regional instability? Local Banking Sector failure? ...
2
votes
1answer
819 views

For a given set of consumption bundles, how do we know there are bundles that the consumer is indifferent between?

In my professors lecture notes (it's more like a book), he states four properties of preferences relations: monotonicity transitivity continuity completeness He then goes on to discuss utility ...
3
votes
1answer
101 views

If a game admits a unique Nash equilibirum, does common knowledge of rationality implies Nash equilibirum?

In a highly controversial paper by Robert Aumann(see here), it is stated as a theorem: In PI games, common knowledge of rationality implies backward induction. If we stick to the strong and ...
11
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1answer
396 views

Are there fundamental reasons why (exponential) economic growth is highly desirable?

One of the most widely published measures of the economy is the economic growth as a % of the GDP; i.e. the degree to which an economy grows exponentially. In my understanding, when the rate of ...
1
vote
1answer
62 views

How to determine the worth of a good

I've searched around the web for awhile now and I'm beginning to think this might be an unanswerable question. I want to know if there is a theoretical way to determine the worth of a particular good, ...
4
votes
3answers
791 views

Is education a part of the U.S. exports component of GDP?

I was searching for this but could not find an answer. My question is whether education of the U.S. universities provided to foreign students counts in exports component on GDP. And if so, can we ...
0
votes
1answer
106 views

Derive a cost production function give prod f, only K

In this question, only K is included and L is excluded how would I go about deriving it? Total cost= Fixed costs + Average costs. Since the variable input costs r per unit, the variable costs is r ...
1
vote
1answer
1k views

Relationship between short-run marginal cost(SRMC) and long-run marginal cost(LRMC)

While reading Intermediate Microeconomics from Hal Varian, I fell short in understanding the relationship between SRMC and LRMC. I can see how in SR, when fixed factor is chosen at LR optimizing ...
1
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0answers
74 views

Implementing Coasian bargaining to achieve social welfare

In this excellent answer, Ubiquitous elaborates on the Coasian solution as an alternative to Pigouvian subsidies. I wanted to explore and understand the solution a bit further. Consider the setting ...
6
votes
1answer
733 views

Does a monotonic transformation of a homothetic utility function imply the preference relation on the set of consumption bundles is still homothetic?

Does a monotonic transformation of a homothetic utility function imply the preference relation on the set of consumption bundles is still homothetic? Obviously, if a utility function on a set of ...
1
vote
0answers
26 views

How is after market tradings inserted in stock market graphs?

When I open a stock market graph tool such as Metastock and enter in the intra-day periodicities, I can never found the data related to the after market operations. I know (by observation) that when ...
2
votes
1answer
102 views

Is it possible to calculate how long it will take to reach Break Even Point if the information provided is only an ROI (Return On Investment) of 10%?

Is it possible to calculate how long it will take to reach Break Even Point if the information provided is only an ROI (Return On Investment) of 10%? Only ROI is provided. If there is a way to ...
0
votes
0answers
2k views

Finding the covariance of a stock portfolio

So my question goes like this, I have the returns of 3 different stocks AAPL, NKE and BBRY I make 4 portfolios out of them as follows: and the question asks me to compute the correlation coefficient ...
4
votes
1answer
796 views

Why is food less expensive in India than the United States?

India has 4x the population, less land, and far worse technology and infrastructure than the United States. Shouldn't food cost in the US be less expensive? I've never been to India, but it seems like ...
8
votes
2answers
402 views

Historical US Housing Data Availability

Papers like Ng and Moench (2011) and Negro and Otrok (2007) use historical housing data to estimate latent variables that correspond to some "true" or "truer" measure of house prices or housing ...
2
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0answers
175 views

undergrad Producer theory problem [closed]

Two commodities, X and Y, are produced with identical technology and are sold in competitive markets. One unit of labour can produce one unit of each of the two commodities. Labour is the only ...
2
votes
1answer
69 views

Fixed effects in treatment model

Hello in a simple treatment model $$y=\beta_0+\beta_1w+e$$ where $w$ is unity for treatment by group. Should you add dummies for the groups to control for differences. I read somewhere that you ...
4
votes
1answer
58 views

What's the status on uncertainty shocks?

Bloom (2009) analyzes the impact of uncertainty shocks, and Bloom et al (2014) propose a business cycle model based on these shocks. It seems to be a young field, but is there any consensus on ...
-4
votes
1answer
118 views

Help a writer worldbuild a failing economy [closed]

I'm writing fanfiction for the superhero serial novel Worm. The main setting in Worm is Brockton Bay, a failing city of about 300,000 people. The economy has been in decline since the decline of ...
5
votes
2answers
176 views

Why the total value of the whole economy is constantly appreciating?

Take S&P for example. In the long run it just keeps climbing. Same for the market as a whole. Why would this happen? Why the market keeps going up (in the long term) all the time? (source)
3
votes
0answers
121 views

Wold Decomposition and autocorrelations of AR

Is it possible to retrieve Autocorrelations ( value or any other info) up to a certain lag for an AR(2) stationary model using the Wold decomposition? Example: $$X_t=0.32X_{t-1}+0.51X_{t-2}+ \...
2
votes
0answers
342 views

Supply-side economics: reduction in tax

In a nutshell Supply-side economists support reductions in tax, because government revenue can increase (according to the Laffer curve) and businesses and consumers will be incentivised to invest (...
3
votes
1answer
101 views

Where can I find County level income data for college graduates?

Does anyone know where I can find data regarding the median income of college graduates by county in the US? Can't seem to find it searching through the census website. The goal here is to obtain an ...
2
votes
1answer
245 views

Is there an economic term for decreased demand due to expected decrease in price due to a product's value lasting for a finite amount of time

So, at work we are doing a charity bake sale. Lunch hour is long gone. An email was sent out offering everything at half price. I imagine decreased demand as everyone knows they have to get rid of ...
7
votes
2answers
471 views

Is elasticity purely an aggregate concept or can it be individualized

First question here. I am not an economist by training, but I do quite a bit of econometric analysis in my job (my background is maths). I often get asked about elasticity, and I am familiar with ...
1
vote
0answers
38 views

Is the symmetric equiblirium in congesstion games always inferior in terms of social-welfare?

Let $G$ be a finite, symmetric, congestion game. According to Nash theorem, a (mixed) symmetric equilibrium surely exists. Congestion games also known to admit pure-strategies Nash equilibrium as they ...
2
votes
0answers
61 views

Symmetric Nash Equilibrium in Stahl (1996)

Let $F(p)$ denote the distribution of prices in a market, $\pi(p, F)$ are profits choosing $p$ given distribution $F$. $E\pi(p,F)$ is defined to be $$ E \pi(p, F) = R(p) \psi(p, F)$$ where $R(p) = p ...
1
vote
1answer
2k views

factors of production (and their relative contribution)

I am reading mankiw's intermediate economics text. what i find is that when he writes a production function for how much will be produced in an economy. he says it is dependent upon quantity of inputs ...
0
votes
1answer
234 views

Unemployment: Human Capital Deterioration

I am looking for Macro-Labor models that include deterioration of human capital. The mechanism is simple: The longer you were unemployed, the more human capital you are losing. However, this is ...
2
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0answers
29 views

Consumption of the unemployed

I am wondering how the consumption of the unemployed varies over the business cycle. We know that wages of people getting fired in busts are higher than wages of people in booms (Mueller 2012), so ...
5
votes
1answer
182 views

Is there a theory about investors' behaviour during bubbles?

As far as I can see there are two senses in which it's 'rational' for an investor to buy during a bubble. The investor has erroneously overvalued the value of the stock/commodity. The investor is ...
6
votes
2answers
286 views

Solving Kaplan and Menzio: Shopping Time

Kaplan and Menzio's shopping time model is a search&matching unemployment model where we, for a steady state equilibrium, need to determine to variables: $J$: Value of a worker $u$: unemployment ...
7
votes
1answer
241 views

Models for online markets with reputation system

The only relevant model I'm aware of is Liu Qingmin(2011 R.E.S). Is there any other decent models dealing with the mechanism of online markets under reputation system, and perhaps linking to ...

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