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2
votes
1answer
28 views

A question related to purification theorem

I am stuck at some point in part b, I would be very happy if you could help. My calculations are below the question. a) P1 plays N with probability p. P2 plays N with probability q. Mixed Nash: $((\...
3
votes
3answers
437 views

Is there any pressure to keep currency exchange rates around 1?

I notice that for any pair of currencies, the exchange rates seem to stay around 1 (as opposed to, say, 1,000,000). This is no longer the case if one country experiences an economic crisis that ...
1
vote
0answers
6 views

Production functions that do not satisfy weak homothetic separability

I am looking for parametric production functions that do not satisfy weak homothetic separability (as first defined in Shephard, 1953), but that do allow for an analytical expression of the dual cost ...
1
vote
2answers
85 views
+50

How to justify the treatment and control groups for Difference-In-Difference with staggered implementation of laws?

A. Background: Dong,2019 and Dasgupta,2019 used the same way to generate the treatment and control groups because they all learn about the impact of the same laws on different dependent variables. I ...
2
votes
3answers
27 views

How the Federal Reserve Manages Money Supply

I'm trying to understand how the Federal Reserve manages the money supply via open market operations. According to this post, when Fed buys securities, that increases bank reserves, which allows banks ...
3
votes
2answers
168 views

Definition: Extractive Goods (Comtrades HS-Categorization)

I'm currently writing a paper on China in Africa and I'd like to compare Africas Exports to China with its exports to Europe and the USA. More specifically I'd like to find out if the Exports to China ...
1
vote
2answers
82 views

Solving a system of equations using R

I'm trying to use R for my Macro practise and model solve for the equilibrium price where the inverse demand curve PD(q) and supply curve P. How do i do this? Thanks!
3
votes
1answer
31 views

Demand for minimum of $4$ different goods

The consumer has the utility function with $4$ goods $$U=\min\left \{ \sqrt{x+y},z+w \right \}$$ The prices are $p=(3,2,2,1)$ with wage $m=4$. Find the demand. So far I have observed that it is ...
2
votes
1answer
38 views

Asymptotic variance vs. conditional variance in calculating regression estimator standard errors

I am given regression model $y_i=x_i^T\beta+\varepsilon_i$ with heteroscedasticity. Let $Avar(b)=E[x_ix_i^T]^{-1}E[\varepsilon_i^2x_ix_i^T]E[x_ix_i^T]^{-1}$ Hayashi's book states that regression ...
2
votes
1answer
47 views

Why does pgmm function gives error every time?

I want to use the pgmm function in R with a lag of 1, but I get the following error everytime: ...
3
votes
1answer
42 views

Derivative of $x_1^S(p_1, p_2, \overline{x}_1, \overline{x}_2) \equiv x_1(p_1,p_2,p_1\overline{x}_1 + p_2\overline{x}_2)$ to derive Slutsky equation

Why is the partial derivative of $x_1^S(p_1, p_2, \overline{x}_1, \overline{x}_2) \equiv x_1(p_1,p_2,p_1\overline{x}_1+p_2\overline{x}_2)$ for $p_1$ $$ \frac{\partial x_1^S(p_1, p_2, \overline{x}_1, \...
0
votes
1answer
47 views

Does Russia have higher inflation than US and Canada? If so, why in this particular case does money supply increase doesn't lead to higher prices? [duplicate]

My understanding is that Russian inflation in recent years is considered to be running in the 5-6 % range, while US and Canada - in the 2-3% range (as measured by price increases/CPI). But I'd expect ...
7
votes
1answer
144 views

Economic theory journals for a refinement theorem about utility function representation

I would like to ask which are the (mathematical) economics journals that publish papers about economic theory and that focus mainly on the mathematical aspects of it. Let me be more precise. If I have ...
0
votes
1answer
43 views

Why are the YTMs of TIPS of longer maturities more sensitive to current interest rates and inflation rates?

According to this website, the yields of TIPS of longer maturities are greater than that of TIPS of shorter maturities. It seems counterintuitive since yields of longer-maturity bonds, which are based ...
0
votes
1answer
20 views

Adding scaled CRRA utility

Suppose our utility function is the usual CRRA utility with $\gamma=2$ so that: $$u(C) = \frac{C^{1-\gamma}}{1-\gamma} = -\frac{1}{C}$$ Now suppose there are 2 goods, A and B, available for ...
8
votes
1answer
169 views

utility maximization with nested Cobb–Douglas–CES preferences

I'm trying to understand the following paper: Hsieh & Ossa: A global view of productivity growth in China (2016). The pdf can be found here: https://faculty.chicagobooth.edu/chang-tai.hsieh/...
0
votes
0answers
7 views

Marginal Propensity to Consume & Marginal Propensity to Import

Wanting to review a question. What formula uses Marginal Propensity to Consume LESS Marginal Propensity to Import? and how might a multiplier of 2 come into the factor? The question is to find out ...
18
votes
2answers
516 views

How accurate is duality?

In economic theory we know that with the use of some calculus, Hotellings Lemma and Sheppards lemma we can derive a given firms supply function and in term its Profit function. With data of a given ...
0
votes
0answers
17 views

Multinominal logit regressions - marginal effects

I am running a multinominal logit regression with five dependent variable categories: "I disagree fully", "I disagree", "Neutral", "I agree" and "I agree ...
0
votes
0answers
13 views

What does this sentence mean in this specific context, relating to competition?

Ulrich,1991, p.82 documented that Building competitive advantage from the inside out begins by understanding the business milieu and niche-the economic and social changes affecting a business. ...
0
votes
0answers
8 views

The relationship between Account Receivable Days and Credit Policy

I am wondering if credit policy relaxation affects the account receivable days when markets becoming more competitive. Conventional wisdom suggested that the credit policy relaxation will lead to &...
0
votes
0answers
14 views

Merge as a solution to externality [closed]

Can anyone mathematically, with any example, say, how can merging internalize the externality?
0
votes
1answer
176 views

Mixed Strategy Nash Equilibrium for this particular 3x3 matrix

Suppose I am given the following matrix: I would like to find all MSNE I started by doing the double underline method to find any PSNE. I discovered that none exist. I then looked at which strategies ...
0
votes
0answers
9 views

Is there any explanation regarding the strange movement of total asset turnover and its components?

I am doing an empirical study using a Difference-in-Difference method. After the event, the total assets turnover of the treatment country increase. In the same setting, I found all fixed asset ...
0
votes
1answer
23 views

free market equilbrium point, S=D confusion

I am confused over the concept of market equilbriums. let's say there is a firm X, who supplies 100 units in 1 week and the market demand is also 100 units, then Supply = Demand, and resources are ...
1
vote
1answer
51 views

Can we pursue the goals of environmental sustainability and reduction of income inequality at the same time? [closed]

Environmentalists tell us to reduce our carbon footprint by, among other things, reducing our traveling and consumption of long-hauled goods. But people living in small-market export-oriented ...
11
votes
6answers
1k views

Why are cost functions often assumed to be convex in microeconomics?

Why are cost functions typically assumed to be convex in producer theory of (introductory) microeconomics? For me this goes against the intuition of economies of scale. There are fixed costs (FC) ...
-2
votes
0answers
10 views

Nash Equilibrium with three players how to solve [closed]

I h Apart from pure strategy nash equilibrium, are there any mixed strategies? If so what are they? why are the no more equilibrium beyond what is found?
1
vote
0answers
27 views

Unsolveable Demand/Utility Problem?

A consume has a preference relation on $\mathbb{R}^4_+$ with a utility function defined as $$ U(x_1,x_2,x_3)=(\ln(3x_1+2x_2+x_3))^3$$ Find the demand at prices $p=(1,1,1)$ and wage $4$. Attempt I ...
1
vote
1answer
29 views

Interpretation of multinominal logit regression (Stata)

I have a few questions about mlogit. I have a set of independent variables and a categorical, but ordered, dependent variable with three categories (Disagree, Neutral and Agree). The assumptions for ...
1
vote
1answer
56 views

Soft question: How do you create/draw/plot economic graphs digitally?

Obviously I'm talking about a theoretical graph not one where you can just plot the data. The only two options I can think of are just using shapes in word/powerpoint or using TikZ in Latex which is ...
2
votes
3answers
285 views

Demand curve is same as Marginal Benefit curve?

Demand curve is same as Marginal Benefit curve [Source: Microeconomics by Pindyck & Rubinfeld, Chapter 10, Section 5 - Monopsony]. I have only seen intuitive explanations for this statement. Can ...
4
votes
2answers
49 views

Elasticity of Substitution of CRS Production Function

Suppose that $F(\cdot)$ has CRS in $K$ and $L$, the elasticity of Substitution is $\sigma_{K L} \equiv F_{L} F_{K} / F F_{L K}$. I once derived this equation but I remember that it takes me quite ...
1
vote
0answers
32 views

Detrending multiplicative model

I have a GDP quarterly series and IND.P monthly series, which I need to detrend. I am following Bernanke et al. paper from 1995 and the way they do it is: ...
6
votes
0answers
281 views

Pure exchange economy: Set of multiple equilibria endowments

Initial endowments which can result in multiple equilibria in a pure exchange economy are explained here. Given a pure exchange economy, that is given the utility functions (which fulfil the usual ...
1
vote
1answer
28 views

Uniform price vs. pay-as-bid auctions in energy markets

These two types of auctions are most commonly used in the energy trading markets. What would be advantages and disadvantages of each? And in the end, can we expect them to deliver similar outcome? One,...
1
vote
1answer
35 views

Why does a higher risk aversion leads to a lower intertemporal elasticity of substitution?

Mathematically, a higher risk aversion leads to a lower intertemporal elasticity of substitution (there is an inverse relationship). But why? If I become more risk-averse, I would like to smooth my ...
0
votes
0answers
11 views

Event Study - Definition of Estimation Window (Trading Days vs Non-Trading Days)

I am currently conducting a event study for my research project on M&A. I have all data available and want to use https://www.eventstudytools.com/. But there is one clear which is not apparent to ...
0
votes
0answers
29 views

Long run equilibrium price under perfect competition

I have a problem related to Ricardian rent. I have one firm, let's call it X firm, and all of the other firms in the market. All firms have to pay some transportation costs due to their land except ...
-1
votes
0answers
8 views

macro economics [closed]

Use the IS-LM diagram to show how income and the interest rate change when there is an increase in government spending. (b) Explain the result intuitively. (c) Use the diagram to illustrate crowding ...
1
vote
2answers
65 views

K-step ahead forecast for an AR(2)

Given an AR(2) process $y_{t}=\phi_{1}y_{t-1}+\phi_2 y_{t-2}$, I understand that the two-step ahead forecast (that is, $\mathbb{E}[y_{t+2}|y_t]$ is given by $(\phi_{1}^2+\phi_{2})y_{t}+\phi_{1}\phi_{2}...
3
votes
2answers
70 views

Why so many suppliers of inexpensive ordinary products

There are a very large number of suppliers of common, inexpensive products, and I am wondering why a few large companies don't simply provide all the supply? I am not thinking of food or clothing or ...
0
votes
0answers
14 views

Calculating 2 year CAGR CTG (Contribution to Growth) [closed]

DATA Year Q P Sales 2018 100 5 500 2019 125 7 875 2020 130 10 1300 2021 132 11 1452 CTG 2020-2021 YoY 2020 48.6% Q -2.5% P -34.4% YoY ...
2
votes
1answer
31 views

Concept of Utility in demand systems

I have seen that researchers use different utility function in demand systems estimation such as Stone Geary. What is the role of these utility functions? What are utility function other than stone ...
3
votes
0answers
52 views
+100

Bertrand game with delivery risk and side payments

Consider three agents $A_i$, who engage in a Bertrand game. All agents have perfect knowledge on all parameters and the distribution $F()$. $A_1$ moves first and selects price $0\leq p_1\in \mathbb{R}...
1
vote
0answers
14 views

Suggested model for dependent variable of different groups

I want to test the impact of X on Y. The dependent variable Y is being employed. Now, I want to see if the impact of X is different for those employed in agriculture (A) and non-agriculture (N) ...
0
votes
0answers
12 views

How can I solve the Nigeria's industrial [closed]

The following is Nigeria’s Industrial Output Index for the years 1984 to 1997: Year Index of Output 1984 175 1985 190 1986 132 1987 96 1988 100 1989 78 1990 131 1991 135 1992 154 1993 163 1994 178 ...
3
votes
2answers
10k views

How to handle change in base year of index?

I have monthly IIP data from 1996-2016. But the issue is the change of base year. For the year 1996- 2011 the base year is 1993-94 and the index is disconnected from Feb 2011. For the year 2005-2016 ...
1
vote
1answer
54 views

Simultaneous vs Sequential Games

Is there a way to characterize the distinction between simultaneous vs sequential games? I'm trying to describe a situation where players can only take actions without knowledge of other players' ...
1
vote
0answers
36 views

Choosing a econometric model for this situation

I want to estimate the effect of adoption of a policy (POL1) by firms on their Value (Y). The adoption of POL1 is driven by self-selection. A new law forces a subgroup of firms to adopt a policy ...

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