All Questions

Filter by
Sorted by
Tagged with
2
votes
1answer
105 views

RBC model and indivisible labour

First of all, I would like to apologise for the fact that I will include a link in my question rather than a direct question, however, I have no idea how to do it in a different way. I have been ...
7
votes
5answers
2k views

Reading list: history of economic thought / political economy

Can you all please suggest books that I can read to get started in the fields of political economy and the history of economic thought? While my major in Mathematical Economics has given me a good ...
6
votes
1answer
335 views

Does vNM rationality depend on the good chosen?

The von Neumann-Morgenstern theorem states that, assuming a person's preferences under risk satisfy certain rationality axioms, then there exists a utility function u, the von Neumann utility function,...
0
votes
1answer
1k views

What is the correct way to calculate a selling price from margin and a cost?

There seems to be two formula to calculate a selling price. The first formula that I came upon would be ...
3
votes
1answer
359 views

Goldfeld - Quandt test statistic equal to 1

I wonder what it means if the statistic (ratio) of this test is one? The statistic is built from sample splitting. Then you have to calculate the ratio RSS2 / RSS1, which are the Residual Sum Squares ...
0
votes
2answers
41 views

Calculating the growth rate of a stock over a year with imperfect information

I am trying to find the growth rate of a stock over a given year. Let's say I wanted to find the growth rate from today, June 11, 2015 to June 11, 2014. This is easy enough when you have perfect ...
1
vote
1answer
89 views

How does this company gain from economies of scale?

Given this story, I am (my younger brother is) asked why (rather than how?) a particular company Pepper plc is likely to benefit from economies of scale. In short, Jo has a shop that sells electrical ...
4
votes
2answers
140 views

GMM Estimation of a parameter from Intratemporal Euler of capital constraints

I'm trying to estimate $\lambda$ from this intratemporal Euler equation: $\left[ \dfrac{C_t^{-\sigma}}{C_t^{*-\sigma}} \dfrac{P_t}{S_t P_t^*} \right]^{\lambda} \left[ \dfrac{\bar{P_t} Y_t - \Delta (...
3
votes
2answers
483 views

Is money supply affected by the stock market?

Do stock prices have any effect on the money supply of an economy? Please provide a simple example if possible. Intuition suggests there is more money around when prices are high (consider for ...
9
votes
1answer
731 views

Dynamic Optimization: What if the second order condition does not hold?

Consider the following dynamic optimization problem \begin{align} &\max_u \int^T_0{F(x,u)dt}\\ \text{s.t.}~& \dot{x} = f(x,u) \end{align} FOCs The Hamiltonian is given by \begin{align} H(x,u,...
6
votes
4answers
8k views

How does the money supply behave when bank loans are repaid?

In a fractional reserve system when banks lend out money, that money is created out of thin air by a accounting journal entry, and the money supply goes up by the amount of the loan & when the ...
9
votes
1answer
179 views

How does a bank convert one currency to another?

Say for example I sell ZAR and buy USD. What happens behind the scenes so that the local ZAR bank is able to deposit USD into my account? Does the bank require some sort of USD cash reserve? How do ...
2
votes
0answers
54 views

How to derive likelihood functions for non-linear model for ML estimation [closed]

When a model is linear, one can use Kalman filter to get likelihood function and use ML techniques. While nonlinear Kalman filter exists, it is suboptimal. What is the standard way to get likelihood ...
3
votes
1answer
128 views

Questions regarding foreign exchange online trading

I am currently studying economics in college and taking course Macroeconomics and International Finance which covers foreign exchange market topic. The class is very crowded since there are more than ...
2
votes
1answer
3k views

What is the relationship between the demand for loanable funds and investment?

If the demand for loanable funds decreases, investment increases because the real interest rate decreases. Isn't that a contradiction, because loanable funds are used for investment, and a decrease in ...
-1
votes
1answer
157 views

Savings and investment relation to interest rate, loanable funds theory, paradox of thrift [closed]

HOw can it all be linked? I think I know but I am only a fresher so.
1
vote
1answer
766 views

Question on Pareto optimality problem

In an economy with two agents whose utility functions are $$ U_A(x_1,x_2) = \alpha \cdot x_1 + x_2 \hskip 20pt U_B(y_1,y_2) = y_1 \cdot y_2. $$ The given allocations are bundle (4,0) for A and bundle ...
9
votes
1answer
12k views

Lagrangian: How to understand the No-Ponzi Condition

In http://www.uni-hamburg.de/fachbereiche-einrichtungen/fb03/iwwt/makro/slides2.pdf page 8, lagrangian is written as follow: $$L = E_0 \sum_{t=0}^{\infty}\beta^t\{U(C_t,N_t) + \lambda_t(P_tC_t + ...
0
votes
0answers
24 views

Beveridge Curve: Add a Variable for Young Share

A beveridge curve show the relationship between unemployment and vacancy. Some papers add additional variables like Real GDP, real interest rate, etc to test for the matching efficiency of the BC. ...
1
vote
3answers
65 views

Are all country government budgets made up of taxes?

Sorry for my ignorance, but I was doing research and noticed that the US's budget is made up of taxes. Is that for all countries? Where is the line between the economy and the government budget? Are ...
1
vote
0answers
80 views

Balance of payments abbreviations

I am trying to decipher certain abbreviations related to balance of payments. They are strange, and i have to admit i have no idea what did they mean furthermore i was not able to find anything ...
2
votes
0answers
89 views

What condition is exactly used to solve forward New Keynesian IS equation?

In http://www.uni-hamburg.de/fachbereiche-einrichtungen/fb03/iwwt/makro/slides3.pdf, you can see New Keynesian IS equation being solved forward to yield a formula for output gap (page 40 of the pdf ...
5
votes
0answers
96 views

Can repeated bidding in an auction make each player's type common knowledge?

In Benjamin Edelman, Michael Ostrovsky, and Michael Schwarz(2007), there's a hand-waving argument to justify their setting as a game of complete information: we assume that all values are common ...
4
votes
2answers
104 views

Applying Economic Principles to Other Studies

I was recently reading this article about some research that was done concerning the illegal killing of elephants. There were two quotes that caught my attention: ...illegal killing [of the ...
5
votes
1answer
147 views

Selection bias - Will multiple regressions solve the problem?

Now I have a data from an African country concerning (i) levels of corruption across public sectors and (ii) perceptions of service quality from households (bad, medium and high). The data consist two ...
2
votes
2answers
1k views

How to derive cubic cost function from a problem of constrained optimization?

The cubic total cost function usually take the form $TC(q)=a+bq+cq^{2}+dq^{3} \qquad a,b,d>0, c<0$ and $c^{2}<4bd$ I know that from a constraint maximization problem $min\quad wL+vK$ ...
4
votes
1answer
2k views

Real world application of IS-LM model

I learnt IS-LM model but I got curious whether it is applicable to the real world. I mean it's just an model, so I doubt that the realtionship between Y and r actually exists. Are there any real life ...
3
votes
3answers
410 views

Raising interest rates to prevent inflation

I am reading a book about the Mundell-Fleming Model and I have encountered a part which says: The Fed raised U.S. interest rates several times during 1994 to prevent U.S. inflation. Isn't it the ...
3
votes
1answer
69 views

Is there an algorithm to find as many NE as possible in this generalized second price auction?

Suppose three advertisers, I, II, III are participating in an auction for three positions for online advertising, top, middle and bottom. Assume that click per second for a position is not affected ...
2
votes
3answers
5k views

What's the role of initial endowments in an edgeworth box?

I am trying to solve a problem but I don't see the role of initial endowments. For instance, the question is about finding competitive equilibria. But there is information about initial endowment. How ...
0
votes
1answer
196 views

How to tell if F-Stat is significant? And at which significance level? [closed]

This question has been posted on http://forums.eviews.com/viewtopic.php?f=18&t=12403 But no reply. Question: How do I tell if the F-stat is significant at 1%, 5%, or 10% level? Or not ...
0
votes
1answer
79 views

Is $y$ always output per person in DSGE/RBC models?

As title says, is $y$ output per person in DSGE/RBC model? If so, why did macroeconomics decide not using Solow/Cobb-Douglas style of using full labor to characterize economy? Model reference: http://...
9
votes
3answers
341 views

Which capital accumulation is right? $K_t = (1-\delta)K_{t-1} +I_t$ or $K_t = (1-\delta)K_{t-1}+I_{t-1}$?

In a lot of models with capital, I find different variants of capital accumulation formula as follows: $K_t = (1-\delta)K_{t-1} +I_t$ or $K_t = (1-\delta)K_{t-1}+I_{t-1}$ Which one is more ...
3
votes
0answers
211 views

Estimation technique: Independent variable (taxation) unknown

I am trying to estimate $\lambda$ from this equation: $(1+ t_t) = \left(\dfrac{C_t}{Y_t}\right)^{\frac{1-\lambda}{\lambda}}$ After taking logs and approximations, I get: $t_t \approx \left( \frac{1-...
4
votes
1answer
745 views

Demand estimation with a lagged dependent variable

Suppose I have the following structural equation for demand estimation in time-series: $$q_t=\beta_0+\beta_1\hat{p_t}+\beta_2incom_t+\beta_3q_{t-1}+\epsilon_t$$ Where $q_t$ stands for the quantity ...
0
votes
1answer
111 views

Why do all apartment complexes in Albuquerque have pools?

Apartment builders have a constrained optimization problem whereby they balance building different amenities to attract tenants with varying preferences. Recently when searching for apartments I ...
2
votes
1answer
9k views

Price elasticity of demand in the point of economic equilibrium

The function of demand is:\begin{align*} D(p) = 66-3p-p^2 \\\end{align*} The function of supply is: \begin{align*}S(p) = 4p^2+8p-114\\ \end{align*} The task is to find price elasticity of demand in ...
5
votes
4answers
708 views

Examples of non-differentiable problems in economics

As a research project, we're investigating various algorithms developed for non-differentiable, convex (or concave, if you're into economics) optimization. I'd like to find some good examples of real ...
10
votes
3answers
659 views

Impact of auction systems that allow 'sniping'

I'm a bit perplexed that eBay has auctions that have a fixed time ending, and so winners are often determined by who can 'snipe' the auction, by putting in the winning bid at the last possible ...
2
votes
1answer
345 views

Budget constraint hyperplanes

This question relates to a specific paper by Eric Budish, published in 2011 in JPE, but I've tried to put all relevant information in this question. On page 1072, he defines budget constraint ...
2
votes
3answers
1k views

Does the demand for bad quality products increase when there is information asymmetry?

Situation 1 In a situation where we have two markets one with good quality products and the other with bad quality products, if we are in a situation where the buyer knows which is the good product ...
1
vote
1answer
154 views

Deducing the Total Cost function

$MC = (TC)'(q) = 3q^2 - 40q+220, \quad where \quad 1 \leq q \leq 20 $ The task is to deduce a function of $TC$, if for the production of the first item we need 291 monetary units, and to write out ...
2
votes
1answer
451 views

Find Change in output from marginal products of labor/capital

A firm produces 231 doohickeys with 8.4 units of labour and 22.1 units of capital. the marginal product of labour is 18, the marginal product of capital is 20. Approximately how many doohickeys will ...
0
votes
1answer
115 views

Minimization of costs combination of factors of production

Given the production function $D(x,y,z)=\min\{2x, \left( 2y+4z\right)\}$, and knowing that P-price $P_x=30,P_y=20,P_z=5$ and volume of production $D=200$. How much of x,y and z is needed to minimize ...
3
votes
1answer
801 views

Intertemporal consumption question

This question is driving me nuts. Suppose, an individual lives for two periods. In each period she consumes only one good,which is rice. In period 2, she can costlessly produce 1 unit of rice, but ...
5
votes
1answer
129 views

How to write the dual problem of this maximization problem?

On this note for Shapley-Shubik model, there's a maximization problem: $$\max_{x_{ij} \in \mathbb{R}^{M \times N}}\sum_{j \in N}\sum_{i \in M}v_{ij}x_{ij}$$ $$\text{s.t.} \ \sum_{j \in N}x_{ij} ...
1
vote
1answer
709 views

Finding equilibrium of perfect competition in the short run with a cost function

I am having a lot of problems trying to find the equilibrium price when we are given a cost function and demand function, but no supply function. All firms have the following production function: $...
2
votes
1answer
73 views

What are the economic implications of regressing the same set of independent variables with different outcome variables

I was wondering if it is possible to make any economic implications by regressing the same set of independent variables with different outcome variables. For instance, regressing [Industry, Years, ...
6
votes
3answers
1k views

How can I draw an edgeworth box with 3 different goods?

If there are 3 types of goods(x,y,z) and 2 consumers (a,b) how can I draw the Edgeworth box? It must be 3 dimensional, right? Is there a software or online tool that I can use to draw a 3D Edgeworth ...
5
votes
2answers
10k views

Why is the income effect zero for quasilinear utility functions?

Suppose I have the utility function $$U(x,y) = \sqrt{x} + y$$ subject to budget constraint $$p_x x + p_y y = m$$ Then $$x_M =\frac{p_y^2}{4 p_x^2}$$ $$y_M = \frac{m}{p_y} - \frac{p_y}{4 p_x}$$ ...

15 30 50 per page
1
166 167
168
169 170
191