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0answers
64 views

Calculating Social Welfare from an Energy Subsidy

In Allcott and Greenstone's paper, "Is there an energy efficiency gap?", one finds the following figure I quote now from p. 13: "When there are investment inefficiencies, the original marginal ...
1
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1answer
27 views

How to calculate PPP$ from LCUs?

Is there one single formula which allows to calculate the income of a person in PPP\$ from her income in LCUs (local currency units), given for example the PPP conversion factor, GDP (LCU per ...
1
vote
1answer
56 views

Socio-Economic Consequences of Nation-Wide Vegan Diet

An advice I often hear regarding our environmental impact is to 'stop consuming meat and dairy products'. This is stated as the number one way to reduce your ecological footprint, according to ...
1
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2answers
45 views

Does the US Bureau of Economic Analysis use the generic growth formula to calculate percent change of GDP?

My question is so basic, I'm embarrassed to ask it. (I study computational theory, not economics.) I'm looking at quarterly GDP numbers and growth rates. I've tried to arrive at the BEA's CPGDPAI ...
4
votes
2answers
82 views

Does the Efficient Market Hypothesis Solve the Tragedy of the Commons?

My layman understanding of the Efficient Market Hypothesis is that there is so much brain power focused on the maximization of profit in the marketplace, that the market will find the best solution ...
0
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1answer
26 views

Use of the term “effective” in economics

I've seen the terms "effective demand" and "effective wages" bandied about in papers, but I'm not sure what these refer to. Please could someone explain both these concepts? Thanks!
3
votes
1answer
28 views

Uniqueness of equilibria in first-price auction with discrete valuations

Assume we have a first-price auction with discrete and independent private values and identical distributions of all bidders. It is known that there exists a Bayes-Nash equilibrium where bidders bid ...
0
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0answers
10 views

Do large- and mid-caps try to shun low share prices?

As NASDAQ and NYSE stocks must be priced at least $1 per share, it feels intuitive and doubtless that large- and mid-caps fancy their share prices to outstrip and remain well over \$1. But what ...
3
votes
1answer
32 views

Example of information structure in a one-player Bayes Correlated Equilibrium

Model Consider a game where a decision maker (DM) has to choose action $y\in \mathcal{Y}$ possibly without being fully aware of the state of the world. The state of the world has support $\mathcal{...
0
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2answers
31 views

Allowing the reserve requirements drop to zero

On 15 March 2020, the Federal Reserves announced that it would cut its benchmark rate to near zero and that it would also reduce the reserve requirements ratio to zero percent. This is part of its ...
0
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1answer
61 views

Understanding Bond Yields

According to Bloomberg, the coupon rate on a 10-year UK government bond is 4.75%. Bloomberg also states that the yield is currently 0.55%, and the market price £143.51. But if the following formula ...
0
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1answer
19 views

FDI - Foreign Direct Investment

If in the sector foreign direct investments (FDI) are not stable, for instance, increasing dramatically in one year, decreasing next year. fluctuation continues over ten years, what FDI can say about ...
1
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0answers
15 views

What are the consequences of price-capping non-perishables undergoing temporary demand-spikes?

Due to the recent coronavirus outbreak (2020 for future readers), many consumers worldwide are overstocking on non-perishable products like toilet papers and hand sanitizers, in order to avoid ...
0
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1answer
33 views

Logistic (or probit) regression

How does the use of a logistic (or probit) regression help address the endogeneity concerns: explanatory variable is correlated with error term?
0
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1answer
32 views

How to determine price per unit and quantity sold of product from financial statement

Situation I hope I'm asking in the right place. I'm writing a paper on the application of quadratic functions in economics and intend to use the Total Revenue function as well as the Profit function ...
-1
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0answers
20 views

What would be a good way to pump the economy from bottoms-up (consumers) instead of top-down (banks) monetary policies?

Economists rely on top-down policies to reinvigorate the economy. They perceive just handing over money to consumers as a waste of money since the economy won't grow in the sense that new industries ...
-1
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0answers
27 views

Showing special case equality for price indices

Show that if all prices increase in the same ratio, then Division consumer price index = Laspeyres consumer price index = Paasche consumer price index Can anyone help? we never did proofs in our ...
0
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0answers
17 views

How does the central bank's purchase of the domestic currency lead to an increase in the domestic interest rate?

Consider the following scenario: The Hong Kong Dollar has been pegged to the US Dollar since 1983. If, for example, the US tightens monetary policy by raising interest rates, this will cause ...
-5
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0answers
24 views

Showing equality of indices [closed]

Show that if all prices increase in the same ratio, then Division consumer price index = Laspeyres consumer price index = Paasche consumer price index Can anyone help? we never did proofs in our ...
1
vote
0answers
28 views

Is it possible and logical to have an upwards sloping budget line?

The question I have is, for example, say Garry has two goods, cookies he pays 1 to consume a cookie and a maximum of 10 can be consumed, whilst he gets PAID 2 to consume vegetables. Garry is also ...
-1
votes
1answer
37 views

$x\sim y$ implies $x+a\sim y+a$ for any $a\geq0$ and $x,y\in\mathbb R^n$, then the preference is linear?

$x,y,a$ are vectors in $\mathbb R^n$ We say $a\geq0$ if all directions of the vector $a$ is greater or equal to zero. We want to prove (or disprove by counterexample) that: Suppose $x\sim y$ ...
0
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0answers
26 views

Corvid19 impact on world economy and share market [closed]

I'm a first time poster, not sure if this is the appropriate forum, but I'm sure someone will tell me if it's not. Is it theoretically possible that something such as the Corvid19 pandemic could ...
0
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0answers
19 views

Interpretation of Impulse Response Functions for VAR models using Log First Differences

I am exploring a VAR model with 9 variables but for simplicity let us consider a model with only two variables and one lag. The VAR model would look something like this: $$ y_t = \alpha_{11}y_{t-1} + \...
0
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0answers
27 views

Show that Division index = Laspeyres index = Paasche index [closed]

our uni is closed because of the COVID-19 and I'm homelearning economics. Currently I'm trying to solve the following problem: Assume that the consumer consumes only two goods that are perfect ...
1
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1answer
22 views

Mundlak Approach when panel data include time fixed effects

What would happen when, starting from a panel data model with group fixed effects and time fixed effects I apply the Mundlak approach? This is the model: $ y_{i,t} = c + \beta x_{i,t} + \alpha_i + \...
0
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0answers
43 views

Why don't central banks just donate money to their poor citizens, rather than QE?

Why don't they prioritize paying their citizens directly (Americans in this case) over providing liquidity, repo, buying bonds, and lowering interest rates? I have a BA in Economics, so hope this isn'...
11
votes
3answers
15k views

Outputting Regressions as Table in Python (similar to outreg in stata)?

Anyone know of a way to get multiple regression outputs (not multivariate regression, literally multiple regressions) in a table indicating which different independent variables were used and what the ...
1
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0answers
7 views

Are typical macro DSGE (RBC or New Keynesian DSGE) models linear, non-linear, or log (linearized)?

In Carl Hommes 2015 book on Expectations, it seems he considers DSGE models (being it either RBC DSGE or New Keynesian DSGE) to be linear, or (log)linearized models, on page 3 of the introduction. He ...
0
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0answers
28 views

Calculation of CPI [closed]

My class was canceled due to the coronavirus and I am supposed to solve the following problem: Assume that the consumer consumes only two goods, and his utility function is $u=x_{1}x_{2}$. Last year ...
0
votes
0answers
19 views

Specification of the parameters of this utility function [Behavioral Economics]

This is from page 274 of "Advances in Behavioural Economics" by Camerer, Rabin, Loewenstein. This chapter of the book is entitled "A theory about fairness, competition and cooperation". I have ...
0
votes
1answer
109 views

Check if a utility function represents a monotone preference

Given a function $u(x_1, x_2) = x_1 +x_2 + \min(2x_1, x_2)$, how do we mathematically prove that it monotonic or not? Is there is a general algebraic technique to show monotonicity of suchlike ...
1
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0answers
29 views

Convex transaction costs

Why do we assume convex transaction costs in theoretic models? What is the intuition and the strict definition of this assumption? Well, I have in mind the Glosten model in 1994. Neither he provides ...
0
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0answers
21 views

US dollar the “Safe Haven”

Could anyone give me a detailed description on how the US dollar serves as the "safe haven" of assets when there are market stresses?
-1
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1answer
34 views

Utility function $u(x_1,x_2)=\sqrt[4]{x_1}+x_2$ [closed]

im new on this community and even on economy topics, so please help me if you can't, my microeconomics teacher really sucks and gave us a homework which i'm barely making thought it, but in this ...
0
votes
0answers
37 views

What mechanisms are at work when the market falls dramatically one day and then rises just as dramatically the next?

We've seen this scenario several times over the past few weeks: The major stock market indexes will plummet one day and then rise dramatically (though perhaps not to the previous days starting price) ...
11
votes
5answers
17k views

How does a country devalue its currency?

I recently read an article in the New York Times that talked about China devaluing its currency (which I believe is held to a peg against the US Dollar). My question is: specifically what tools does a ...
0
votes
1answer
32 views

Why can money be described as “government non-interest bearing debt”

Trying to get some intuition on this statement I came across while reading Miguel Didrauski's dissertation "Rational Choice and Patters of Growth in a Monetary Economy". My sense is that it has ...
0
votes
0answers
14 views

How can you define a commodity's level of pollution intensity?

I am doing a report on whether environmental regulation has an impact on goods exports for the UK (Using difference-in-differences). I have export data from 1990 to 2018 split by SITC codes. However, ...
3
votes
2answers
781 views

What happens when I leave out empty cells in regression?

I'm using Stata 14.1 to do a regression, and I got a matsize too small error. It gave some more output to tell me possible reasons for this problem, and I think ...
0
votes
1answer
37 views

Some basic questions on infromation asymmetry

How does asymmetric information and bid-ask spread are connected? For instance, economic theory tells us that, the more the problem of information asymmetry, the higher the spread is. What is the ...
0
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0answers
11 views

Oughtn't option premiums increase by the same amount as strike prices?

Pls see this question's title. In the screenshot below, as the strike prices below increase by +1, oughtn't the option premiums increase by +1 too? Why buy the \$104 put for \$13.71? The \$105 put ...
-1
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0answers
27 views

US Pandemic Stimulus [closed]

What is the limit of money available to the US federal government for pandemic related economic stimulus? If economic shutdown continues until July (as many perfect) can the government keep ...
0
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0answers
23 views

Relationship between strictly convex preference and convex preference

Let X be a convex subset of linear topological space and let binary relation >= be a complete preordering. prove: If preference relation is strictly convex and continuous, then it is convex. Since ...
2
votes
1answer
199 views

What does Piketty mean by the C90/C10 ratio?

I am currently readings Piketty's "The Economics of Inequality", where he states in chapter 3: The P90/P10 wage ratio in the United States in the 1990s is 4.5, whereas it is “only” 3.2 in France (...
1
vote
1answer
20 views

Premises on which the Efficient Market Hypothesis is built upon

The Efficient Market Hypothesis tells us that stocks are "fairly priced" (i.e. not systematically over- or under-valued). That is, stock prices reflect all information that is already known about them....
0
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0answers
18 views

Why do banks keep vault cash instead of depositing all reserves at the central bank?

In what way to commercial banks benefit from keeping some of their excess reserves in the vault as opposed to depositing all of their excess reserves with the central bank (assuming the central bank ...
0
votes
1answer
78 views

Why do prices go up when the central bank increases money supply?

From my understanding, when the money supply curve shifts to the right, interest rates go down, it follows that the price level decreases and the prices should go down? Thanks in advance.
1
vote
2answers
83 views

Does the minimum of short-run average cost equal the minimum of long-run average cost in the long run for perfect competition?

I was recently reading this resource (http://www2.econ.iastate.edu/classes/econ101/hallam/Comp_LongRun_HND.pdf) which states that in the long run for perfect competition, price is equal to both the ...
0
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0answers
15 views

Auction markets vs dealership markets

By refering to centralized markets, we usually have in mind underlying markets, such as stock markets and for instance the NYSE. Usually, me make a discrimination between the markets in the sense that ...
0
votes
0answers
15 views

Why is sample selection based on the dependent variable problematic?

Why is sample selection based on the dependent variable problematic? Why is sample selection based on the independent variable not problematic? Consider the following function. $saving=\beta_0+\...

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