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18 views

One Week U.S. GC REPO Bid Rate Exceeds Ask Rate

I have recently downloaded a time-series of one-week U.S. Generalized Collateral Repurchase Agreement Rates from Bloomberg (Ticker: USRGCY1Z CURNCY). While looking through the data, I noticed that the ...
-1
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2answers
168 views

Opportunity profits vs. opportunity costs

Having learned that Opportunity costs = the costs for avoided profits are a well established and quite useful economic concept, I wonder how its counterpart is officially called and investigated: ...
6
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2answers
82 views

Why is the Australian dollar, often viewed by traders as a proxy for the Chinese economy?

The Australian dollar, often viewed by traders as a proxy for the Chinese economy, gained 0.3 per cent against its US counterpart. From: https://www.ft.com/content/b18d1c56-cf75-11e9-b018-...
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0answers
16 views

Recapitalization of Banks

If a government decides to recapitalize banks then will that come under government expenditure and show up in GDP or will it be a transfer payment and stay outside the GDP? and why? In short, Is the ...
0
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0answers
17 views

What are the statistical tests I need to perform before I regress GDP on multiple variables?

I'm using data over 10 countries for the period 1975 to 2010. My objective is to check if the chosen regressors have significant effect on GDP. I have very basic knowledge of econometrics which I ...
0
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0answers
15 views

What happens to net assets in case of increasing NPAs(Non-Performing assets)?

The bank's profit is measured as Return on Assets which is the ratio of Bank’s net profits and Net assets. In case of increasing NPAs, the bank's net profits will decrease, but what will happen to ...
1
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0answers
30 views

Log differentiation of aggregate production function [closed]

Suppose we have an aggregate production function $Y = A F(K, L)$. I'm following some slides which then states that we if log differentiate we get the following: $\frac{\dot{Y}}{Y} = \frac{\dot{A}}{A} +...
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0answers
13 views

Is there a term for revenue related to total accumulated revenue?

In a quarterly/annual report, revenue is measured per reporting period, and often there's a comparison to the previous quarter or year-over-year. Is there a more specific term for a) the total ...
0
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2answers
21 views

what can be the proxy variable for measure of product innovation?

My objective is to prove that international trade leads human capital formation which leads to economic growth. I am regressing GDP on multiple variables among which Human capital is one. According to ...
2
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0answers
19 views

Going from DRMs to Indirect Mechanisms

I have recently started studying mechanism design (after having taken a basic graduate micro course) through Borgers' 'Introduction to the theory of mechanism design'. I was wondering if people are ...
0
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1answer
38 views

Why are bond yields so low when Fed is cutting rates?

Fed cut its rates for the first time in 10 years in July and it is about to cut the rates at least by 25 basis points during its September meeting. Usually, when Fed cuts the rates the bond yields ...
0
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1answer
51 views

Has there ever been a first world recession where inequality didn't fall? [closed]

Gini index fell everywhere in great depression, great recession, the 80s recession, and so on. Has this ever not been the case? Have any countries not seen inequality fall in recession?
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2answers
36 views

Papers on International Trade and Environment

everyone. As a requirement to get my bachelor's in economics, I have to write a paper. The theme I picked is something along the lines of "the impact of environmental crimes and regulation on ...
2
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0answers
41 views

Simulating a simple economy with … price-makers? arriving at competitive equilibrium

I'm new to economics and thinking about graduate study. My background is mathematics. I started reading a book on microeconomics by Mas-Colell, Whinston and Green. My goal is to understand how ...
0
votes
1answer
16 views

What does it mean when we talk about “same basket” exactly for both GDP and CPI?

When we say about "the basket used for calculating the CPI is the same as the composition of GDP" What does it mean the "same basket"? Does it just mean the goods and service are the same but the ...
0
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0answers
25 views

How to show that a leontief utility function is homothetic?

usually what i do to show that a utility function is homothetic is by either showing that the function is homogeneous or if the MRS is homogeneous of degree 0. However the MRS is not defined. So im ...
0
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1answer
26 views

What is the difference between Common Goods and Common Pool Resources?

All this time I was thinking that common-pool resources are common goods, until I read this excerpt from a book.
-1
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0answers
6 views

How to use CPI to create Real Prices (Currency) on DAILY frequency data?

I'm working with a dataset and need to devalue nominal currency in dollars to adjust for inflation. The only indices I've been able to find however, have been monthly or quarterly. The range of data ...
7
votes
2answers
341 views

Doesn't the concept of marginal utility speak to a cardinal utility function?

When we differentiate the utility function with respect to some input $x_i$, we get a number that tells us how "fast" the utility function is changing at some point with respect to $x_i$. Doesn't that ...
1
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1answer
30 views

Can I Upload my Preprint on Arxiv Before Submitting it to JPE

I wrote a paper relating the optimal deterrence strategy for crime to concepts on statistical physics, and I am considering submitting the paper to the Journal of Political Economy. I'm wondering if ...
0
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1answer
25 views

Why do the income and substitution effects cancel for log preferences? Trouble reconciling Slutsky decomposition

I've read (pg 10) in Gourinchas' notes on consumption that the income and substitution effects cancel for log preferences, and I tried to prove this to myself doing the Slutsky decomposition for the ...
2
votes
1answer
33 views

The Household Production Function

I was wondering whether someone can explain the household production function. Specifically, the variant presented in Patanayak et al 2005. The paper uses the HPF to determine household willingness to ...
1
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1answer
23 views

The equilibrium effects of a change in government purchases on consumption

I can't get a homework problem started due to wording. I desire to understand it, so I will only put down enough to show my line of thought. we have a utility function to maximize, say $u(c,\ell)$, ...
1
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1answer
30 views

Define structural unemployment

I am a bit confused regarding the actual definition of structural unemployment. Some places say that it is the permanent decline of a particular industry, leading to workers being unemployed as they ...
0
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0answers
41 views

Why are prices made available to the public?

Price in micro is the point at which demand and supply meet. But in real world no one knows about the actual demand curve or supply curve. yet prices are set, so in a way there is a lot of costs being ...
0
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0answers
7 views

how to subtract linear regression result from numerical values on rstudio?

i have found real exchange rate overvaluation or undervaluation by multiplying by purchasing power conversion factors(Nominal exchange rate*PPPUS/PPPUK).In the next level i found the balassa samuelson ...
1
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1answer
29 views

Overvaluation of a Currency

I am interested in knowing more about the valuation of a currency, and how the currency is determined to be 'overvalued' or indeed 'undervalued' in a floating/flexible exchange rate system. More ...
0
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1answer
18 views

is it possible to find PPP monthly data?

For most of the databases, monthly PPP data is not provided. How it can be possible to find monthly PPP data? i mean PPP(exchange rate) conversion factors. Thanks
0
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0answers
36 views

Who paid the bill for cheap Chinese exports?

We have all enjoyed the flow of cheap Chinese imported goods, whether in the shops, or online. The shipping costs from China have always seemed very low. Now I see this note: Got notification ...
1
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1answer
31 views

'One Unit Change in the Explanatory Variable'

I have a conceptual question in terms of econometrics. I understand for example that the primary goal of econometrics is to use estimated parameters to calculate the average change in the dependent ...
-1
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0answers
24 views

What is the purpose of a central bank holding interest rates to curb inflation?

I would like to know why a central bank would keep the interest rates unchanged to curb inflation. I do not know what the outcome would be. Thank you.
1
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0answers
29 views

What is the exact difference between Income Effect and Wealth Effect?

I’m aware that in basic economics class one of the explanations for the downward-sloping Aggregate Demand Curve is the wealth effect or Pigou effect, which means that as price level goes down, your ...
0
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0answers
15 views

Is it just as profitable for a brokerage to service investments in 401k plans as opposed IRAs?

Why would a brokerage charge fees to the employer, if they could just charge fees to the individual, like they would do otherwise? If an employer wouldn't want to spend any extra money on 401k plans, ...
0
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1answer
17 views

Local vs. foreign currency denomination for Emerging Market Bonds

For emerging market governments, why is it safer to issue bonds in local currencies than in foreign currencies to raise money? Given that both are invested in by foreign investors, couldn't both ...
-1
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0answers
44 views

Does black scholes only work over an infinite time range?

Can the Black-Scholes modell be applied to settings with a finite time horizon?
3
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0answers
48 views

Mean Variance Optimization in a Utility Maximization Framework

I'm struggling to gain a broad understanding of Mean-Variance utility theory as it relates to finding the efficient frontier of a group of assets which each have some return and variance. The typical ...
1
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0answers
12 views

GARCH data modeling

I am analyzing three time series returns for stocks, bonds and real estate, and have done prelimanary tests including Engle's ARCH test which came back as not rejecting the null hypothesis. IF there ...
2
votes
1answer
27 views

Data analysis with GARCH modeling

I'm currently analyzing the relationship between stock, bonds, and real estate returns in Germany. I've gathered my data and am planning on estimating this equation: $\sigma_t = \beta_0 + \beta_1 R_{...
1
vote
2answers
43 views

How does buying more of a foreign currency devalue a nation's currency?

If a country wants to devalue their countries, why does buying more of a foreign countries currency devalue their currency? I was reading the top answer from this question How does a country devalue ...
0
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0answers
17 views

Where does overseas money from exports go?

I am a bit confused about foreign exchange reserves. I was reading this website (https://www.thebalance.com/foreign-exchange-reserves-3306258#targetText=Foreign%20exchange%20reserves%20are%20the,to%...
0
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0answers
12 views

What can we infer when a commodity has a high stock-to-flow ratio?

If one commodity has a higher stock-to-flow ratio than another, what does this market signal tell us about that commodity? If it makes a difference, I'm talking about when this is a long-term ...
1
vote
1answer
27 views

Why loans/debt can cause inflation?

I learned that inflation can be a result of more loans or debt. When there are too much borrowers in the country, people will have more money to spend and the amount of products is the same so prices ...
0
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0answers
15 views

Why growth of national income in current prices during inflation not measured in poor sections and poverty alleviation programs?

Here 1) dwindles means reduce, smaller. Here is my doubt: If inflation fluctuates how can we use the word 'dwindles', what it means here? 2) Why the growth rate during inflation not measured in poor ...
0
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1answer
24 views

Why do loans drive the economy?

Someone was saying: "Why is credit so important? Because when a borrower receives credit (loan), he's able to increase spending. Spending drives the economy. This is because one person's spending is ...
2
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0answers
35 views

What do game theorists think of behavioural economics?

Though behavioural economics has been popularized over the past decade in both industry and pop culture, it seems that not much has changed with regard to the standard economic definition of ...
2
votes
1answer
36 views

Principal component analysis interpretation

Suppose a wealth index is computed using information on a set of 14 assets that a household possesses. The index is generated using principal components, as the 14 individual asset variables are ...
0
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1answer
37 views

Can't we measure the growth in the income levels of poor?

Inflation has been a challenging aspect of policymaking. In such situations growth in the income levels of the population living below the poverty level can never be measured accurately (due to ...
1
vote
1answer
14 views

Implications for currencies pegged to USD of Chinese devaluation? [closed]

I get the general implications that exist for both US-Chinese exports/imports. However, considering that some currencies are pegged to the USD, would there be any effect and if so what? Thanks
1
vote
1answer
41 views

What would happen if fractional banking was phased out? [duplicate]

There are negative interest rates now and into the foreseeable future. This must mean there is too much money being offered compared to the demand for loans. Fractional banking acts as a multiplier on ...
1
vote
2answers
177 views

How to derive Hicksian demand?

How can I derive Hicksian demand, when from the FOC I only get $\frac{p_x}{p_y} = \frac13$ without the usual x & y. So they cannot be derived directly from FOC, but if I plug the price relation ...

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