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1answer
78 views

Can heterogeneous prices be consistent with competitive equilibrium?

I do not want to put many constraints on the structure of the problem, except by defining a competitive equilibrium as such where firms are price takers in the factor and good(s) market, and, perhaps (...
1
vote
1answer
90 views

Who was the first economist to write about central banking?

I am interested in the origin of a central banking theory. I've heard that Karl Marx was the first author who wrote about central banking system. Was he really the first one? Or was there any other ...
1
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2answers
1k views

Utility function used to indicate bliss point

How does one create a utility function to indicate existence of a bliss point? what do the goods marshillian demands look like in such a situation?
1
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1answer
48 views

What does “to be in the double digits to get inflation” mean?

Until last year, the Chinese government set 8 percent annual growth as a goal, and the economy frequently delivered several percentage points more than that. Then last March, the government pared ...
1
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1answer
71 views

expected payoff of an American put option

I am reading about the American option and sources got me confused in the part where the American put option is considered on a non-dividend paying asset. I understand that the payoff of an American ...
1
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0answers
63 views

Maximization under two different states of the world [closed]

What I did is the following one but I am not sure at all: Any help will be appreciated. Thank you.
1
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1answer
121 views

Can Okun's Law be used for forecasting?

Can one forecast $\Delta Unemployment$ and $\Delta Inflation$ using a VAR model based on Okun's law?
1
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0answers
592 views

How price and quantity of ice cream sold changes when the price of yogurt reduces?

I am a newbie at economics and would appreciate help from the community. Question Use the model of supply and demand to explain how a fall in the price of frozen yogurt would affect the price of ...
0
votes
1answer
61 views

How does national debt work?

I'm trying to understand national debt. I gather that the United States, and other nations with central banks, accrue debt basically by printing new money at their central bank. This, I hypothesize, ...
0
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1answer
37 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{...
0
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5answers
133 views

Which measure to check in analysis (p-values or $R^2$)?

In an analysis e.g. OLS regression which measure would you look at? $R^2$, $adjusted-R^2$ or $p-value$? How would you consider a regression with p-values >0.15 but with an $R^2$ of 40%? In general ...
0
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3answers
87 views

Is it possible that the minimum point of a short run cost curve does not touch the long run cost curve?

In the answer to this question, the answerer said "the minimum point of a short run cost curve will be above the long run cost curve". Is it true? If so, how would it be so? I thought that if e.g. ...
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0answers
54 views

Special case for wealth allocation with quasilinear utility functions

Building on this question, regarding the answer from Bkay: Is it a general statement that when $m < \frac{p_y^2}{4 p_x}$, all income will be allocated to $x_M$? What about the case when the ...
0
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2answers
6k views

Determine the homogeneity of a demand function

If a demand function $X(P_X, P_y, I)$ depends only on prices and income. Is this function a homogeneous function?
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0answers
30 views

how Ballassa Samuelson affects real exchange rate? [duplicate]

I get confused. How "Balassa Samuelson effect" influences real exchange rate?
0
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2answers
84 views

Do I make correct conclusions about international trade (and ways to increase GDP) from the expedenture approach formula for GDP?

(Please correct me if my reasoning is wrong somewhere) Net Exports is a part of GDP and consequently its increase or a decrease also causes GDP to increase or decrease, assuming everything else stays ...
0
votes
1answer
79 views

Job search theory in discrete time

Let us assume that there is a labor who lives in discrete time universe and discounts future payoffs with the discount factor $b\in (0,1)$. And we assume that this labor is at period $t=0$ at first. ...
0
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0answers
24 views

When Balassa-Samuelson effect increases, real exchange rate depreciate?

I researched several literatures related with Balassa-Samuelson effect and according to literatures, as Balassa samuelson effect increases, real exchange rate appreciates. However according to the ...
0
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2answers
37 views

Why isn't “long-run aggregate demand (or LRAD)” a thing?

To give you a sense of where I am in my understanding of economics, I've just learned about long-run aggregate supply in the neoclassical/monetarist view as a vertical curve. It occurred to me why ...
0
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1answer
354 views

Isn't the liquidity trap about real interest rates?

Here is a so-called thought experiment. Suppose the inflation rate is negative, the nominal interest rate slightly negative, and the real interest rate positive (call it $r$). I think people would ...
0
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0answers
23 views

How does definition of “price equilibrium with transfer” also include the case for the definition of “walrasian equilibrium”?

According to MWG and this answer, walrasian equilibrium is a special case of price equilibrium with transfers. However, since wealth distribution is predetermined in walrasian equilibrium, would it ...
0
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1answer
52 views

How to prove that a concave production imply that the input requirement sets are convex?

According to page 7 of this slide, "A convex production set Y implies that the associated input requirement set V(y) is convex". How can one go about proving it?
0
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1answer
38 views

Why might a monotone increasing but nonlinear transformation of a utility function not represent the same preferences?

According to a textbook, a monotone increasing but nonlinear transformation of a utility function might not represent the same preferences. Why is it so? An example of such preference would be ...
0
votes
2answers
71 views

Question on Central bank loss function interpretation

How do you interpret this central bank’s loss function: $$L(\hat x, \pi)=\alpha \hat{x}^2+(\pi-\pi^T)^2$$ where $\alpha >0$ and $\hat x$ is output gap. Phillips curve is $\pi = \theta \hat{x}+\...
0
votes
1answer
46 views

What is the economic strategy of the UK?

The UK has run a current account deficit running into billions of GBP per annum since the turn of the century. If we apply the mindset of a household to the economy then clearly this would appear to ...
0
votes
1answer
81 views

Solve for the steady state with CRS Cobb-Douglas, problem with the system of equations

There is one agent with utility function given by: \begin{equation} U(c,l) = \frac{c^{1-\sigma}}{1-\sigma}-\frac{l^{1+\gamma}}{1+\gamma}\tag{1} \end{equation} With budget constraint: \begin{...
0
votes
1answer
36 views

How is hyperinflation categorized, and how is it fixed?

I have a few questions about hyperinflation that I’m really curious about: I learned there are two types of inflation - demand pull and cost push. I was wondering if hyperinflation fits into the ...
0
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1answer
43 views

Optimal strategy in a single-agent choice problem under uncertainty

Consider the following single-agent choice problem under uncertainty. Let $V$ be the state of the world with support $\mathcal{V}$ and probability distribution $P_V\in \Delta(\mathcal{v})$. First, ...
0
votes
1answer
45 views

Is there a definitive way to tell if an action causes a movement or shift in a supply-demand graph?

I am taking AP Macroeconomics, and am about 2/3 of the way through the curriculum. We have learned about various supply-demand graphs, and right now we are working on the market for money. I have ...
0
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2answers
57 views

when a=0, would economy accumulate more physical capital? Why?

Utility function is $U(c_t,l_t)=(1-a)ln(c_t)+aln(l_t)$ $l_t$ is leasure time $c_t$ is consumption Production function is $y_t=k_t^e(1-l_t)^{1-e}$ $k_{t+1}=i_t+(1-\delta )k_t$ where k is ...
0
votes
1answer
42 views

How to read PPP$ aloud?

How to read PPP$ aloud? That is in a paper that I should read loud in a presentation, but I don't know the most Is it "purchasing power parity in US Dollar," or "purchasing power parity in terms ...
0
votes
1answer
24 views

What would mortgage payments be if monthly payments were constant in real terms?

From the Wikipedia: The fixed monthly payment for a fixed rate mortgage is the amount paid by the borrower every month that ensures that the loan is paid off in full with interest at the end of ...
0
votes
1answer
37 views

(Microeconomics) How to classify Public Goods and Common Resources in Externalities?

In Microeconomics there are 4 types of externalities - Positive Consumption Externality, Positive Production Externality, Negative Consumption Externality, and Negative Production Externality. And ...
0
votes
1answer
26 views

Bayesian Correlated Equilibrium in a one player case: relation with literature

I am curious about the connection between one-player Bayesian Correlated Equilibrium (hereafter, BCE) introduced by Bergemann and Morris for a generic $n$-player setting with $n\geq 1$ (here) and the ...
0
votes
1answer
40 views

Production function involving profit maximisation

​Hi, I don't get how the answer of d is deduced in this question because I don't think I made any mistakes in my calculation and have also used all the information given. After knowing L is 800, I ...
0
votes
1answer
86 views

Central bank loss function (I did a solution, but it doesn’t totally make sense I guess)

I have question on central bank loss function. We know that the central bank loss function is $$L(\pi, \bar{Y})= (\pi- \pi^e)^2+\beta \bar {Y}^2$$ And we know that fisher equation is $$i=r+\pi^e$$...
0
votes
2answers
113 views

Algebraic approach towards convexity

I have a function: $ u(x) = x_{1} + x_{2} + \min\{x_{1}, x_{2}\}$. How do we algebraically show if it's convex or not? Also, what would be the general way to show if any given function is convex.
0
votes
3answers
305 views

Who were the economists who made lots of money in the financial markets? [closed]

I prefer to learn economic theories from economists who made lots of money from the financial markets and were aided by their economic ideas. Who were they? What are the notable economic theories did ...
-1
votes
1answer
52 views

The difference between profit and earning something

Suppose I search some elderly people who are in need of domestic care. I find 100 of them and them to pay me 15 dollars per hour. Then I find 100 people who will do the job for 10 dollars per hour. ...
-1
votes
1answer
320 views

Question on oligopoly.

Consider an oligopoly between two identical firms producing a homogenous good with constant marginal cost where firms face linear market demand. $B_i(q_j)$ denotes firm i’s best response given the ...
-1
votes
1answer
375 views

Profit maximization and allocative efficiency result

I completely stuck to the last part of this exercise. I cannot understand how can I determine an allocative efficiency result. Any help will be appreciated. Thank you.
-2
votes
1answer
100 views

Why incomes should decline in equilibrium state

According to Keynes, the prosperity of a population is measured by the aggregated income of each individual. Spending this income keeps the economy away from a depression. If there is too much ...
-5
votes
2answers
253 views

What faction determines the strength of a state's currency and can that faction be rebelled?

I know that to determine the strength of a state's currency (a currency's Equilibrium Price), the following factors are contemplated by some faction, but I don't know what is that faction. ...

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