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1answer
54 views

How can you model/simulate the price/value of a good?

Let's say that you have a good which price can change quite often because of its demand. Let's assume that you developed an algorithm that changes continuously the supply of the good to make its value ...
-1
votes
3answers
60 views

Does Shadow Banking (i.e. non-Commercial Banking) produce transaction-useful money?

In shadow banking amongst primary dealers & large institutions...I understand repurchase agreements function similar to deposit accounts (Gorton, et al). Additionally, I understand how traditional ...
1
vote
0answers
6 views

Is there a clear timeline of ECB/Eurosystem's changes to the defintion of M3 (with regard to repos)?

I found that circa 2012 the ECB/Eurosystem changed their definition of M3 to exclude at least some repos, which previously were included. According to a 2014 Bundesbank publication, the change ...
2
votes
1answer
88 views

Political theories of inflation

A recent op-ed (paywall) in the Financial Times about inflation stated that (emphasis mine): Across the developed economies, the Phillips curve has gone ignominiously flat. The world's leading ...
1
vote
1answer
254 views

Wealth - Bond Market and Liquidity Preference Framework

I've been told that an increase in wealth will lead to an increase in both the demand for Bonds determined by the Theory of Asset Demand. This should shift the bond curve to the right, increasing ...
1
vote
1answer
31 views

Why does Samuelson say common stocks are better than bonds and preferred stocks during inflation?

I’m reading the first edition of Paul Samuelson’s Economics (1948). In Chapter 6, “Business Organization and Income,” after describing bonds, preferred stocks, and common stocks, he writes: To test ...
0
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0answers
7 views

Bank of Canada operating band

I read the following quote about the Bank of Canada's "operating band" for inducing target overnight loan rates: ...
0
votes
1answer
13 views

How to describe a utility function in words?

Suppose I have a utility function of Cobb-Douglas form. U(x, y) =x^0.2*y^0.8 I want to describe it in words. I would say like: The utility of consumer is captured by #of good x and #of good y. The ...
0
votes
1answer
14 views

causal time series analysis economics

I want to analyse the relationship between the level of globalization,and the level of income inequality between two specific countries. however, I'm quite lost as to which method is good to use (in ...
-3
votes
1answer
36 views

ECB: limits of quantitative easing and rates cut?

Context: In recent history (edit: i.e. post-WWII), the Covid19 crisis is unprecedented. A significant portion of the world population is under lock down and almost all industries will be affected one ...
0
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0answers
13 views

Which one of these sources best represents fiscal deficit data?

I'm currently recollecting data for an econometrics model I want to build later on with a panel data model. However, sometimes it is difficult to find certain information. For example, I want to ...
0
votes
1answer
22 views

Measuring productivity with the Törnqvist index

I have a sample of companies, of which I want to calculate the productivity of each individual firm relative to a hypothetical firm in the industry. Choosing the measurement method was not easy, but ...
3
votes
3answers
73 views

Creation of Money - Hypothetical Situation

Imagine you sell me some consulting services. I don't have any cash, so I give you a $100 IOU instead. You now have a $100 Note Receivable on your Balance Sheet. ...
10
votes
2answers
450 views

The Economics of Coronavirus

People are concerned about the economic impacts of the virus. How severe will the economic downturn be? Will the coronavirus cause a global recession worse than the 2008 crisis? I'm not looking here ...
0
votes
2answers
48 views

Is there an “ideal” ratio of tax revenue to GDP? Or, at least, can I assume a higher ratio is better?

At the link below, you can see countries have a huge difference in ratios of tax revenue to GDP. Is it fair to assume that a higher ratio is better? Does raising a substantial portion of your GDP in ...
0
votes
0answers
11 views
0
votes
1answer
46 views

Math based proof for currency changes (microeconomics)

This isn't part of my homework but I am genuinely interested in the mathematical proof behind this question (this is my line of work currently). I tried to work through it but after 2 hours gave up. ...
1
vote
1answer
34 views

Is there still allocative efficiency when a subsidy is placed on a good?

An answer schedule for a practice exam I am doing states that when a subsidy is placed on a a good by the government, there is a loss of allocative efficiency. I have also learnt from this video that ...
0
votes
1answer
39 views

Question Regarding Equilibrium Price & Surplus

So here's an example of a standard Supply & Demand Relationship for an Individual Supplier: As a supplier, for 1 dollar, I'll produce 1 unit of something. For 2 dollars, I'll produce 2 units, for ...
1
vote
1answer
80 views

Solving Euler Equation for standard DSGE Models

I am studying a rather standard DSGE Model with a standard Utility function $U = f(c_t, n_t, M_t)$ subject to a budget constraint. Now, tosolve the intertemporal optimization problem I have, or ...
0
votes
1answer
16 views

Difference between Luxury/Premium/Value fashion segments? What does “value” mean here?

I was reading this article on Quartz: https://qz.com/1485141/just-20-fashion-companies-are-making-almost-all-of-the-industrys-profits/ I do not understand the following graph shown: What does "value"...
-1
votes
2answers
42 views

Is fiat currency better than a backed-currency?

My question is would it be better if we went back to something like a gold standard but backed by a finite virtual material instead? It avoids the problem of fluctuations in gold supply. The money-...
1
vote
1answer
49 views

Does comparative advantage sustain over long periods of time?

Let's say that given the same resources, company A can produce 40 pens or 50 pencils, company B can produce 30 pens or 30 pencils. Since A has a comparative advantage in pencils, A decides to ...
0
votes
1answer
65 views

What will happen to a poor country’s economy if it replaces its entire banking system with the Islamic banking system?

I don't know much about economics. So, I am just curious about the Islamic banking system. What I understand is: I know that the USA is the dominant economy and the USD is the dominant currency in ...
-4
votes
0answers
25 views

URGENT Lagrangian Multiplier for Microeconomics [closed]

How do I derive Lagrangian formula for L= U(C) + λ(P1C1 + P2C2 - m) where U(C) = C1 + C2, and the constraint is P1C1 + P2C2 = m I get stucked because U'(C1) and U'(C2) are both 1 What a great way ...
0
votes
1answer
47 views

Convert USD2005 PPP per-capita GDP to USD2011 PPP per-capita GDP for a number of countries

Which conversion factor / formula should be used to convert USD2005 PPP per-capita GDP to USD2011 PPP per-capita GDP for different countries? I have found an identical question, but without a clear, ...
1
vote
3answers
61 views

Where is the money that was in the economy pre-lockdown? [closed]

Countries are in lockdown, companies have no customers and thus no money, have to lay off staff which in turn means ex-staff have no money and cannot buy goods and services. Where is the money that ...
0
votes
0answers
17 views

If the payroll tax were eliminated on incomes below $30000 what would happen?

If you canceled all payroll taxes below $30000 / $60000 single / married what would happen? I know that this could increase firm profits, or increase wages, or the number of jobs, or decrease prices ...
-1
votes
1answer
44 views

Is it detrimental if self-interest is not acknowledged in resource allocation situations?

Please note: I am doing a literature survey/review, and I would like references to published work. I contend that if we are dealing with a resource allocation mechanism that allocates scarce ...
1
vote
2answers
51 views

Building a time-series demand forecasting model

I am forecasting demand for certain types of goods and services, which I expect to be correlated to a sub-set of a basket of macroeconomic indicators (considering 15-20 indicators) I do not know ...
3
votes
1answer
93 views

Transformation of random variables and second order stochastic dominance

Suppose $X$ and $Y$ are two random variables where $X$ has SOSD (second order stochastic dominance) over $Y$. Let $g(\cdot)$ be a monotonic function and $X' = g(X)$ and $Y' = g(Y)$. Under what ...
0
votes
1answer
28 views

Job Search and the Investment Problem

I don't know what to take as the cost of accepting the job. Kindly guide me through deciding how to frame the equation.
-4
votes
1answer
40 views

Completely lost on Economics Assignment [closed]

I am an economics student and one of the questions on my current assignment is: A new food is designed to add weight to mature beef cattle. The weight in pounds is given by W = 13xy(20 − x − 2y), ...
-1
votes
2answers
77 views
+100

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) ...
0
votes
2answers
21 views

“Consumption lowers investment” mankiw explanation

I am teaching myself macroeconomics and I am stuck on this reading Mankiw: Because the economy’s output is fixed by the factors of production and the level of government purchases is fixed by the ...
2
votes
2answers
93 views

Risky Assets over Bernoulli Utility

My question is about 6.C.4. of Mas-Colell et.al.'s Microeconomic Theory book. We have N risky assets with returns $z_n, n = (1,...,N)$ per dollar invested which are distributed over $F(z_1,...,z_n).$ ...
0
votes
1answer
166 views

Why do interest rates move together?

Why do interest rates (mortgage, LIBOR, Treasury yields, etc.) move together? What is the fundamental reason behind that? From my understanding, what drives it is the Federal Funds Rate, which is the ...
0
votes
1answer
33 views

Creation of Money - Hypothetical Situation II

Continuation off this line of questioning. If I issue an IOU, it would need to be fungible, transferrable, etc in order to be considered "money." Understood - My follow up questions are: Remaining ...
0
votes
1answer
15 views

what is the impact of inflation on export of pakistan?

I wanted to know about the relationship of inflation and export if the country. How does it effect when inflation increase or decrease?
0
votes
0answers
30 views

On example of “eurodollar” creation

The following example is supposed to be from Milton Friedman, This is supposed to illustrate the creation of "eurodollars", the claim is that there is a supply of 900 extra dollars in the global ...
1
vote
2answers
250 views

How to derive the demand function of $U(x_1,x_2)=x_1-x_2$

I'm trying to find the uncompensated demand function. How would you do that, when I have the following utility function $u(x_1,x_2)=x_1-x_2$, and the budget constraint $p_1\cdot x_1+p_2\cdot x_2=p_1\...
-1
votes
0answers
30 views

How will Coronavirus affect Social Security solvency?

The Coronavirus (known by younger millennials as the "Boomer Plague") is estimated to have a cost of life between 100,000 - 240,000 Americans. According to the CDC approximately 80% of deaths ...
0
votes
1answer
91 views

Expected Utility and Jensen's Inequality

Consider two random variables (costs and valuations) distributed $v\backsim G(.)$ and $c \backsim F(.)$ with pdfs $g(.)$ and $f(.)$. Let the supports of $c$ and $v$ be $[x,y]$. Let $x<a=E(v)<b&...
0
votes
1answer
15 views

Relationship between government expenditure and exchange rate?

I've read an increase in government expenditure can lead to or increase the chances of currency crisis but shouldn't it lead to the opposite? Fiscal deficit ----> Govt will undertake borrowings ---> ...
0
votes
2answers
28 views

How does stock market drop affect the economy if it doesn't affect the corporations?

Sorry if it's a basic question. Suppose corporation ABC went through public offering many years ago. ABC retained 30% of the shares, and 70% are being traded. The very initial offering, ABC made ...
3
votes
4answers
781 views

Does each stock exchange only trade in one currency?

And if not, how are currency exchange rates accounted for?
1
vote
1answer
40 views

Max Utility Function and Finding associated demand curve

I have a max utility function, therefore; U(x,y)= max(2x,y) and I am trying to find the demand function x = x(𝑝x , 𝑝y , 𝑀), note this function cannot be differentiated. I am familiar that the ...
3
votes
1answer
325 views

Christiano Fitzgerald filtering process

I'm trying to compare the results of Christiano Fitzgerald bandpass filter with wavelets. I'm familiar with wavelet decompositions in general, but I'm rather new with Christiano Fitzgerald (CF). So ...
3
votes
3answers
289 views

Sanity of lending out made-up money

Background I've done some research to get an understanding into the issue I want to ask about. Regrettably, I found out general descriptions of the mechanism and/or evidently biased explanations, ...
-1
votes
1answer
22 views

Need Help with Income Elasticity of Demand Problem

When​ Judy's income increased from \$400 to \$440 a​ week, she increased her demand for concert tickets by 15 percent and decreased her demand for bus rides by 20 percent. Calculate​ Judy's income ...

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