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2 views

What would be the income tax rate be if it were 'flattened'?

In some recent conversations/speeches (It's voting season), I have noticed many people do not understand how a marginal income tax system works. Not understanding how they are only taxed at the ...
0
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0answers
6 views

What are Frisch Demands useful for?

Frisch demands are demand equations found usually in an intermediate step of the standard utility maximization problem. By example for the basic two-good case of a consumer with quasilinear ...
0
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1answer
15 views

Limit of random walk auto correlation function

Given the random walk process $y_{t}=y_{t-1}+e_{t}$, the auto correlation function is given by $corr(y_{t}, y_{t-h})=(\frac{t-h}{t})^{1/2}=(1-\frac{h}{t})^{1/2}$, which tends to 0 as t tends to ...
7
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2answers
7k views

Why is CRRA utility often used in macroeconomics DSGE model?

As title says, why is CRRA utility often used in macroeconomics DSGE model? That is, the form of $$u(c_t) = \frac{c_t^{1-\sigma}}{1-\sigma}$$ I cannot find any theoretical background around this........
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2answers
52 views

Why doesn't capitalism run out of money?

There's this question that doesn't let me sleep at night... From what I hear, investing surplus money is always considered a good idea because it lets your money "work for you" and earn you more ...
0
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2answers
21 views

Autocorrelation function of a random walk process

What is the intuition behind the result that the autocorrelation function of a random walk process $y_{t}=y_{t-1}+e_{t}$ tends to 1 as $t\rightarrow \infty$? Thank you.
0
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0answers
11 views

Do reserves at Bank of Canada count as money?

I read the following three statements concerning M1 and M2 in Canada: a) "M1 consists of currency held outside the banks and chequable deposits of individuals and businesses." b) "M1 does not ...
0
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0answers
4 views

How do I find monthly domestic interest rates for Panama for the early nineties?

I am looking for monthly domestic interest rates for Panama from before December 1996. Any type of interest rate will suffice - deposit rate, money market rate, saving rate, lending rate. The time ...
0
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1answer
98 views

Most significant factors in the price of a goverments bonds

As a follow up on Long-,short-term interest rates and inflation. Inflation is clearly a factor(tho not possible to model mathematically) when it comes to the market price of a bond. I can think of ...
2
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0answers
17 views

Deriving FOC in OLG model with Cobb Douglas utility

I'm trying to derive the first order condition in a partial equilibrium overlapping generations model. The setup contains both consumption and housing goods. $$ \underset{c_{t+i},h_{t+i}}{max}U_{t}^{...
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0answers
7 views

Random payoff generation in Otree

I am programming an experiment in python which involves the decision between two players to either enter a market or exit based on a prisoner's dilemma payoff structure. However, the payoff of each ...
4
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2answers
7k views

Why is money in circulation a liability of the central bank?

We know that the money today is fiat currency, that it is money because the government says it's so. So when new money is printed or loaned out to the commercial banks by buying treasury bonds, ...
1
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1answer
150 views

How to build a Social Accounting Matrix from an Input-Output Table?

I built an Input-Output table (IOT) with the industryXindustry format because I thought it was a building block to build a social accounting matrix (SAM). But now I realize that I can't transpose the ...
5
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1answer
63 views

Is there a reproducibility crisis in Economics?

I am an undergraduate economics student, and came across this paper by John Ionnadis on 'The Power of Bias in Economics Research'. the findings are quite bleak. https://academic.oup.com/ej/article/...
2
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3answers
192 views

What's the use of '% to GDP' type of variables?

In my study I will look for the relationship between the Gini coefficient and trade, FDI and other variables. However, as I was regressing it... the result turn out to be insignificant. My data that I ...
0
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1answer
31 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 ...
0
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0answers
10 views

NIPA sectoral balances, understanding influences on household sector

we know that the private sector balance = S-I = Y-C-T-I lets split it into 3 sectors: Households, Firms, and Banks. Suppose that that the HH balance equals +100 so far into the period. Q1) Then, a ...
0
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1answer
35 views

Bayes Correlated Equilibrium with complete information

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{...
-3
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0answers
12 views

What is the time period I should assume for factor prices in the cost function? [closed]

I have a quick and rather urgent question. Using the method of Lagrangian multipliers I got my cost function for my Cobb Douglas function of the form AQ^(1/b) where b>1, and A was an extremely large ...
-2
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0answers
11 views

Fixed vs Flat Tax Rate Question

Sam consumes, among other things, telephone services. He pays a fixed tax t on every phone call he makes (in addition to the regular price), and ends up paying 100 dollars every year in telephone ...
0
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0answers
11 views

Optimal tax level that raises revenue R < e given Hicksian demand elasticities

I have to find a uniform tax rate that raises revenue R < e and I am given a Hicksian cross price elasticity demand matrix below. I know I want to use Ramsey's first-best but I am not sure, how to ...
0
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3answers
46 views

locally nonsatiated preferences

what does this symbol mean in the discuss of locally nonsatiated preferences: $\varepsilon > 0$ and $||y-x||<\varepsilon$.
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0answers
26 views

Why is discriminating monopoly better than competitive markets for producers?

In intermediate microeconomics by Hal Varian, It is said that discriminating monopoly is better than competitive markets for producers. Why so?
-1
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0answers
9 views

Finding budget share given Hicksian demand elasticities

I'm not sure how to go about solving this. I tried thinking of this as a linear function where a share of marijuana = $-.4 -.106tobacco +.506alcohol$ and find a share of each good by doing a system of ...
0
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0answers
17 views

Consistency of Textbook Problems Involving Discount Rate

A book on Theory of Interest explains about the discount rate as a rate when the interest is paid at the beginning of period: If a person borrows \$100 for 1 year and with discount rate of 10% ...
0
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1answer
16 views

Falling Real Wages

Economist Lester Thurow said, "It used to be that if you were an American and relatively unskilled, you got an American premium, cause you'd work with more raw materials, better capital, better ...
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0answers
16 views

Over What Ranges Can Elasticity Estimates Be Applied

I am reading the following paper: https://onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12113 The paper attempts to estimate the elasticity of pharmaceutical innovation (measured by # of new ...
0
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1answer
22 views

What are some currencies that are not pegged and fixed?

Are there any currencies that are not pegged to the dollar or euro and are purely fixed exchange rates?
0
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1answer
16 views

Shouldn't national Stock Indices proportional to GDP of the country?

I was looking at Japan: Japan's GDP trajectory and Nikkei 225. It seems from 2011 - 2015 the GDP contracted but the Nikkei has gone up. Would there be a good explanation for this ?
0
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1answer
26 views

What does it mean for a firm to have a 0.95% dividend?

Here's an Apple's dividend: What does this 0.95% mean? Is it 0.95% of share capital? If not, what does it mean?
0
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1answer
23 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 ...
1
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4answers
150 views

Perfectly competitive firms. Economies of scale

My textbook says the following: "Perfectly competitive markets only achieve productive efficiency if you assume that there are no economies of scale in the industry." Why is this the case? And by "...
1
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4answers
40 views

Does Efficient Market Hypothesis make anticipated monetary policies useless?

Since the market perfectly captures all the information, is it true that any anticipated monetary policy has no impact on equity prices? Or the “information” has an immediate impact but the “event” ...
-2
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0answers
12 views

Crusoe Economy maximization [closed]

u(c,l)=c^a(1-l)^a-1 0<a<1 Y=Al^b Find the optimum c and l.
0
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1answer
16 views

What does the vertical axis of the Kuznets curve depict (mathematically)?

I do not understand what does the word "inequality" means on the vertical axis of the Kuznets curve. Can someone please explain?
0
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1answer
19 views

How to interprete ndependence between treatment indicator and outcomes?

In Woodridge's textbook "Econometric Analysis of Cross Section and Panel Data", page 907, it says ...the treatment indicator $w$ is statistically independent of ($y_0$, $y_1$), as would occur when ...
3
votes
2answers
86 views

Can we have a Non-Reflexive Preference Relation?

I've been thinking about preferences alot recently and have been specifically thinking about the reflexivity requirement. That is: $$x \succsim x$$ Though this is apparent and obvious, I have been ...
8
votes
7answers
3k views

Mathematical Micro/Macro Economics Textbook Recommendation

I was formerly an economics major and now also majoring in mathematics. I want a textbook that is rigorously based on mathematics; not just using mathematics whenever the author wants, but in a more ...
1
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0answers
9 views

China benchmark rates and Shibor relationship (chart)

I made the chart below for an assignment on People's Bank of China monetary policy during the financial crisis. The problem is that it got me very confused about the relationship between these ...
2
votes
1answer
201 views

Axiom: More is Better; But when is more better?

I'm taking an introductory microeconomics course and have been introduced to the 3 axioms of economic preferences. These include Completeness Transitivity Non-satiation My understanding of non-...
1
vote
1answer
26 views

Am I correct that cyclical unemployment can be negative?

Let's start with stating and emphasizing some truths that we will need later. Overall unemployment rate=Frictional unemployment + Structural unemployment + Cyclical unemployment. Also, Natural rate of ...
1
vote
1answer
30 views

Are these two derivatives the same with regards to TR?

Given that Marginal Revenue is change in Total Revenue: TR = P*Q P = f(Q) TR = f(Q) * Q MR = dTR/ dQ Or ...
2
votes
2answers
95 views

Calculating the amount paid for a loan in today's dollars

So I was trying to figure out the amount paid for a loan in today's dollars using two different methods but they give me different results. I was hoping that someone could explain which method is ...
0
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0answers
17 views

What are the different types of Adjustable Rate Mortgages(ARMs)? [closed]

I'm aware of Hybrid ARMS that have a 7 fixed 1 adjustable composition and Convertible ARMs that can be converted to fixed rates but are there other types of ARMs? For example for this Ginnie Mae ...
0
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2answers
48 views

regression method for data that contain a number of observation for several years

I have a data set about 125 companies. For each company I have the salary and some other variables about the top 5 managers in each company. One observation contains the top 5 managers in each one of ...
0
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0answers
24 views

Unbiasedness of MoM estimator

Why is the method of moments estimator $g(\bar{Y})$ of $\theta$ only unbiased if $g(\mu)$ is a linear function of $\mu$? (Note: It is assumed that $\theta=g(\mu)$ for some function $g$ and $\bar{Y}$ ...
3
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0answers
31 views

Do countries with high taxes end up with low government debt but high private debt?

I'm curious if my observation that some Scandinavian countries (Denmark, Sweden) have high taxes, low government debt, but high private (in particular high household) debt is applicable more generally ...
0
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0answers
8 views

List of stock and bond indexes for countries

I am doing some master`s degree research and looking for the list of stock/bond indexes for developed and developing countries. So the excel-file I should gather in the end will look like this: ...
2
votes
1answer
41 views

Why do Eurozone members have a commonly higher Debt-to-GDP ratio?

As you could find out from the map, among 22 countries whose debt-to-gdp ratio is above 50%, only 7 are not Eurozone members, and from which only UK is comparably large economical entity. ...
0
votes
1answer
21 views

How are PPP, nominal exchange rates and inflation related?

This Forbes article discusses how changes in the market exchange rate can be used to estimate an inflation rate thanks to the principle of purchasing power parity (PPP). Can someone distill this ...

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