# All Questions

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### Macroeconomic Theory Consumption

Can we assume that consumption behavior features excess sensitivity when examined in macroeconomic data?
7 views

### nash equilibrium public good

Two players, 1 and 2, simultaneously choose their consumption of a public good. Given the consumption choices, g1 and g2, player 1 derives a marginal benefit of MB1 = 10 - (g1 + g2), while player 2's ...
27 views

### Does recycling lead to less jobs?

Say I buy a glass bottle, I can either put it in the landfill or recycle it. My understanding is, glass will breakdown into sand. (Not sure how well though, since we sometimes find glass from Roman ...
4 views

### Is there any evidence for consumer utility-maximising behaviour, at individual or market level?

Even though utility maximisation is ubiquitous in economic textbooks to model consumer behaviour, its usefulness is rarely demonstrated by evidence. Is there any evidence that some consumers do ...
9 views

### Is there any empirical evidence for the so-called “law” of diminishing returns

The "law" of diminishing returns is usually "demonstrated" with made-up examples (programmers working on a software, farmers acquiring land...), but rarely on evidence. Is there any empirical research ...
12 views

### derive value function from utility function

We have the utility function. $$U_{t} = \ln{c_{t}} + E_{t}\sum_{s=1}^{\infty}(\beta^{s}\ln{c_{t+s}})$$ And I am trying to find the value function. $U$ is utility function. $c_t$ is consumption at ...
9 views

### Evolutionary stable strategies

I am new to evolutionary game theory so I can't figure out whether I'm looking at things correctly. I have the following payoff matrix: $$A = \begin{matrix} 3 & 0 \\ 5 & 1 \end{matrix}$$ ...
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### Examples of firms having private information about negative event

as the title says, I am searching for examples where a firm incurs a negative event, for instance, a stockout, a supply chain glitch or investments that went wrong. In the best case the firm was in ...
15 views

### Running a regression to avoid multicollinearity

Dear StackExchange Users, Please, help me with the following issue. I have the following regression (pooled OLS; panel data): ...
5 views

### Query regarding derivation of aggregate demand curve

What is the difference between AD curve derive from is-lm model and quantity theory of money.
11 views

### Compensated demand function for perfect complement indifference curve

For example, the indifference curve for goods $A$ and $B$ is $min$. How should I express its compensated demand function if the quantity of A does not depend on its price because of the zero ...
17 views

### Risk neutrality in single-agent choice problem under uncertainity

Consider the following static single-agent choice problem under uncertainty. Let $V$ be the state of the world with support $\mathcal{V}$ and probability distribution $P_V\in \Delta(\mathcal{V})$. ...
21 views

### The relationship between profit and wages

It seems obvious that an individual company increases their profits when they reduce wages or increase automation or some such. But if wages fell universally because of this, wouldn't that decrease ...
17 views

### Externalities from motor vehicles - more recent estimates?

I am looking for estimates for the externalities from motor vehicles. There's an excellent paper "Automobile Externalities and Policies" (2007) on this exact issue, but it's a bit old now. I was ...
22 views

### Understanding annualized percentage rate of interest, real interest and nominal interest rate

I am having issues finding a solid example online that explains how the concepts surrounding the word interest relate to each other. I am after an example that presents a concise mathematical formula ...
17 views

### Regression estimators for an equation with three independent variables

I'm trying to find the estimators for a regression equation with three independent variables: $y_i = \beta_0 + \beta_1 x_{1i} + \beta_2 x_{2i} + \beta_3 x_{3i} + \mu_i$ What is the betas' estimator, ...
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### Perfectly elastic supply

How would you algebraically write a perfectly elastic supply? Will it be infinite at price = 4? (The choice of the number 4 is completely arbitrary)
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### Consider the utility function U(x,y) = y√x

Draw the indifference curve for U= 10, U=15, U=20. My knowledge of algebra has deteriorated over the last few years of being out of school and I am really unsure of how to answer this. The X value ...
17 views

### Percentage/proportion of published papers with DSGE models

I remember reading a few years back an article that showed an interesting graphic with the percentage/proportion of published papers with DSGE models across time. I've tried searching, but I get so ...
259 views

### Proof coefficient in log-log model is equal to coefficient of elasticity

I am trying to see how we treat $\varepsilon$ in the following proof: Suppose we have a log-log single variable regression model $$\ln(y) = \alpha + \beta \ln(x) + \varepsilon$$ then take partial ...
19 views

### Profits and Aggregate Supply

I feel like this is quite a stupid question, but I can't wrap my head around it. Why do suppliers make less of a good as profits drop? Intuitively, shouldn't they make more of the good in order to ...
21 views

### Balanced Growth Path Calculation

Consider an extension of Alesina - Rodrik paper 'Distributive politics and economic growth' (1994). Instead of wealth taxation, impose a labor income taxation with a slight change in the model ...
15 views

### Net Preference Relations

Let say the electorate consists of three segments of voters: 1, 2, and 3 with corresponding weak preference relations defined over the candidates. Let the preferences be given by -- Segment 1: Biden >...
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### 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 ...
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### Did Eisenhower, and his economic team, use a Keynesian economic policy, or a modified form, or not at all?

There is a big debate about this in my graduate political/economic history class. Any input will be appreciated, as well as suggested books or peer-reviewed journal articles. Thank you.
21 views

### Recommendation on economics books for a statistician

I have mainly an statistics/informatics background and i have basically not knowledge in economics. What some good books to star given my background? Edit: My principal interest is stock market ...
28 views

### Strictly increasing function transformation

I have utility function given by: $U(x_1, x_2) = \begin{cases} x_1+x_2 & \text{if$x_1+x_2<6$} \\ 6 & \text{if$6\...
56 views

### Log Utiliy Function Trick

I am watching Lecture 3 of Yale's Financial Theory Lecture (by John). At about minute 50 he explains something along this line (with reference to log utility functions). MUx/Px=MUy/Py And ...
27 views

### Is it possible that all countries become developed and rich? [duplicate]

In economics, we are taught that, or needs are infinite and resources are fixed. And each needs and resources have some associated value.. At global level, we know, there are some rich as well as some ...
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### Did Trump make any concessions in his 'Phase 1' trade deal with China today? [on hold]

From what I've read, the US agreed to not proceed with a round of tariff increases on Chinese imports, and in exchange China agreed to buy several tens of billions of dollars more in agricultural ...
29 views

### Why is the opportunity cost 0 in this case?

My book says that the opportunity cost of purchase of a specialized equipment that has no alternative use is zero and hence such an expenditure is a sunk cost. However, while calculating the user cost ...
13 views

### Initial creation of reserves

I am currently reading the book "Where does money come from?" which is co-authored by Richard Werner after I took the "Money and Banking"-class in coursera by Perry Mehrling. There are certain ...
19 views

### Financial Economics and Corporate Finance

In pg 4 of Principles of Corporate finance (Allen et al, 2017), in the context of explaining financing decisions are less important that investment decisions, there is a line that says: "Financial ...
37 views

### OLS and 2SLS normal equations

For a system of equations with $M=2$ endogenous variables, $Y=\begin{bmatrix} y_1 & y_2 \end{bmatrix}$ and $K=3$ exogenous variables, $X=\begin{bmatrix} x_1 & x_2 & x_3 \end{bmatrix}$. ...
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### Okun coefficient interpretation

I'm wondering how to interpret Okun’s coefficient. Say you have $y^c = -1*u^c$. This means that a 1% increase in the cyclical unemployment gap will produce a 1% decrease in the cyclical output gap. ...
22 views

### Change of demand curve

I am supposed to solve the following problem: The price of coal oil is increasing more than 1%, due to the annoucment about decreasing the supply of coal oil on the market. How it will effect curve ...
25 views

### GDP Income Approach

On the economics textbook it is written that GDP Income Approach can be calculated as: [ Compensation of Employees + Operating Surplus + Consumption of Fixed Capital + Tax on Production and Imports - ...
17 views

### Why does the bond market induce efficient allocation of capital?

Going from this quote by Bryan Collins of Fidelity on China's economy: One of the nice things we see from the development of a domestic bond market is that it starts the process of pricing ...
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### How do treasury bill auction work?

So i am having a couple of issues understanding the auctions of treasury bills. I know that the treausury accepts the bids offering the highest price. The treausury accepts the competitive bids in ...
46 views

### utility function always negative

In a problem set, I found a strange utility function: $U(c)=-1/2(c^* - c)^2$, where $c^* =$ positive constant level of consumption. Does this function have economic sense?
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### How high of a carbon fee would reduce global emissions by 50% in 15 years?

OVERVIEW OF THE EMF 32 STUDY ON U.S. CARBON TAX SCENARIOS https://www.worldscientific.com/doi/pdfplus/10.1142/S201000781840002X About half of the EMF 32 models met a 50% reduction in carbon ...
20 views

### open economy, and reduced world market price [on hold]

Can someone help ? :) Suppose that a small, open economy that exports labor-intensive goods experiences a reduced world market price for its export goods. Explain the effect this fall in prices ...
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### Under what conditions should I use a Social Accounting Matrix Model vs. Multimarket Model vs Computable General Equilibrium Models?

What are the differences between the SAM, multimarket and CGE models. When should I use one over the others?
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### Macroeconomics Modeling, [closed]

I would appreciate if someone could give some help on how to solve this problem.Any hint about part a?
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### How can I model the impacts of improved agriculture technologies and food aid in a multimarket model?

Given a multimarket model for staple agricultural commodities wheat, rice, maize and sorghum, in a low-income economy, Im trying to figure out how I can use the multimarket framework to look at the ...
34 views

### Why is Marxist ideology victorious? [closed]

With the emergence of Negative rates, Capitalists can only profit by exploiting each other. How will Liberals survive? Will Liberals be annihlated?
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### is there a correlation between credit defaul swap(CDS) and geopolitical risks?

because in my country,turkey..when we defend our legal security anxieties geographically,our cds values are increasing(500 currently,higher than argentina,greece,syria,iraq and aphganistan)but we are ...
53 views

### Why are there no minimum wage entry level IT jobs

In the UK, I have not seen any graduate level IT jobs offering a starting salary below £20,000. At the same time, about 10% of computer science graduates are unemployed six months after graduation. ...
### Derive demand function $x(p,w)$ from utility function $u(x) = \min\{x1, x2\} + x3$
I know how to solve the two-good case with $u(x) = \min\{x1, x2\}$, but the addition of $x3$ confuses me. Problem Derive the demand function $x(p,w)$ from $u(x) = \min\{x1, x2\} + x3$ What I did ...