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1answer
48 views

Solving Euler Equation for standard DSGE Models

I am studying a rather standard DSGE Model with a standard Utility function $U = f(c_t, n_t, M_t)$ subject to a budget constraint. Now, tosolve the intertemporal optimization problem I have, or ...
0
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0answers
11 views

calculating quarterly rates from

What is the "normal" way to calculate quarterly rates OR Prices. E.g. calculate the quarterly Oil Price, if I have the monthly data? I suppose simply taking the average of the three months isn't the ...
0
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0answers
13 views

Interest rate in the Ramsay-Cass-Koopmans model in a closed economy

I am struggling to understand the optimal choices of firms in the Ramsey-Cass-Koopmans model. Specifically, everywhere I see there is the following optimality condition for the interest rate, $r_{t}$, ...
1
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0answers
29 views

Two different definitions for a Complete Relation

Many sources show this definition for completeness of a relation $$ \forall a, b \in A, a \neq b, (aRb) \text{ or } (bRa) \tag{1} $$ Others show only $$ \forall a, b \in A, (aRb) \text{ or } (bRa) \...
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0answers
14 views

Handling large percentage of zero-valued observations in the dependent variable in a panel dataset

I am writing a paper using a panel dataset in which my depepent variable has an large percentage amount of zero values observations. Those zero values are real zeros, I mean they are not missing data ...
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0answers
10 views

Is it allowed to reduce a dataset of moving averages to run an AR(1) model properly?

I run a simple AR(1) and AR(2) model with the following code: ar.ols(df$y, order.max = 1) ar.ols(df$y, order.max =2) My dataset is as follows: I do have yearly ...
0
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3answers
79 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. ...
0
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0answers
21 views

Change in Consumer Surplus with two goods

Suppose we have two goods, price changes in the two are independent; having seen this question I am considering why the change in total Consumer Surplus is the sum of the change in Consumer Surplus ...
0
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0answers
14 views

Testing the Marshall-Lerner Condition

Assuming initially £1=$2 Exports Px £100 QDx1 500 Export Revenue £50,000 Imports Pm1 £50 QDm1 1000 Import Spending £50,000 Trade Balance = £0 After a 10% depreciation of the £ Assuming PEDx = -0....
4
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5answers
641 views

Is it possible to have a preference relation that is complete but not transitive?

I've been doing my own reading on non-rational preference relations. Im currently under the impression that transitivity follows as a direct result of completeness of preferences. However my (much ...
0
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1answer
32 views

When will the reserves be exhausted?

A rough estimate of the oil and gas reserves in some country at the beginning of 2010 was 15 billion tons. production that year was approximately 250 million tons. when will the reserves be exhausted ...
0
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0answers
16 views

Why would creditors accept a comfort letter that can't be legally enforced, from borrowers that refuses to guarantee?

Prof Richard Taylor, Damian Taylor. Contract Law Directions (6 edn, 2019). p 65. Para 1. You might be wondering why businessmen bother to make an agreement if it has no legal effect—is it worth ...
1
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1answer
53 views

A question about the property of quasi-linear preference

In case of quasi-linear preference, why would one unit more of the numeraire good (good 1) give the same additional utility as spending an additional amount of wealth equal to the cost of one unit of ...
1
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2answers
47 views

Why is the nature of graph of utility function different from indifference curve?

I am new to Economics, but I have this doubt. The indifference curve and utility function both have the same equation, so their graph must also be similar, which is true I guess. Then why is it that ...
0
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1answer
36 views

What would be the shape of the Indifference curve with slope 1/xy? [closed]

Let the utility function be: $U(x,y) = \log x +y^2$. In this case, the MRS is coming out to be $\frac{1}{2xy}$. Thus, how will the shape look like?
-2
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0answers
29 views

Completely stuck on this algerba question to do with oligopoly [closed]

I have tried finding finding out the individual firm quantities using marginal revenue then solving the simultaneous equations. This leaves me with some complicated equations I am wondering if there ...
0
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0answers
26 views

Data for income distributions

Knowing the average income per capita or the median income is a rather poor economical indicator of a country, even when given in PPP\$. Knowing the (dimension-less) Gini index is somehow better, but ...
0
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1answer
52 views

Expected Utility and Jensen's Inequality

Consider two random variables (costs and valuations) distributed $v\backsim G(.)$ and $c \backsim F(.)$ with pdfs $g(.)$ and $f(.)$. Let the supports of $c$ and $v$ be $[x,y]$. Let $x<a=E(v)<b&...
0
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0answers
28 views

Heckscher-Ohlin with non homothetic preferences [duplicate]

Can someone tell me how I can show with an example that the Heckscher-Ohlin result does not necessarily hold when preferences are not homothetic. I was asked if it similar as a case in which the ...
0
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0answers
41 views

Heckscher-Ohlin with heterogeneous preferences

could someone really help me out I would need to show a situation in which the Heckscher-Ohlin result does not necessarily hold when preferences are heterogeneous. Does someone have an idea how I ...
3
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0answers
48 views

Existence of symmetric trembling hand perfect equilibria

Consider symmetric and finite game. By Nash (1950), the game must have at least one symmetric equilibrium (proof). Also, it must have at least one trembling hand perfect equilibrium (proof). ...
3
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0answers
26 views

How to go from demand elasticities to a demand function? (merger simulation)

I am reading this paper: https://econpapers.repec.org/article/oupjleorg/v_3a10_3ay_3a1994_3ai_3a2_3ap_3a407-26.htm (Werden and Froeb 1994) about merger simulation. The paper is above my level, so I'...
0
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1answer
34 views

how to explain the term “Compensated law of demand” in a plain way?

The term “compensated law of demand” I met in advanced microeconomics textbook, which appeared in “revealed Preference “
1
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1answer
33 views

Question on Human Capital Accumulation Model by Acemoglu/Autor

I was reading the lecture notes by Acemoglu and Autor on Labour Economics. https://economics.mit.edu/files/4689 I was able to understand equations 1.1 to 1.8 of the notes; however, I am unable to ...
0
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1answer
19 views

Velocity of M1 versus M2 money

According to Pablo Kurlat's textbook on Macroeconomics, the graph of Ch 13 compares the velocity of M1 and M2 over the years. I don't understand why M1 velocity exceeds M2 even though M2 includes more ...
0
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0answers
17 views

Markov Switching Models CHP Test in Hamilton's paper

In Hamilton's paper "What is real about business cycles?" (2005) I have three questions: How do we calculate $C(p; \theta)$ on page 451 if we do not know "nuisance" parameter values of $p$? What was ...
5
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1answer
377 views

Example of Law of One Price holds but No Arbitrage Fails

I have been told that no arbitrage is a stronger assumption than than the law of one price. In particular, Law of One Price is equivalent to the existence of a stochastic discount factor, whereas no ...
0
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2answers
20 views

Merging Panel data with two different splits. Is it possible?

I have two data frames with panel data. The first contains data on companies on a yearly basis. The layout is as below: ...
0
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0answers
21 views

Why hipothesis of perfect competition market implies fixed price of a product in every transaction?

My book says that from the axioms of perfect competition follows that the price is fixed in every transaction but it doesn't specify in which way it is possible to prove it. Besides, are all the ...
2
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2answers
104 views

Optimal Production Input in Relation to Cost Minimization Problem

I was doing my homework and got really confused about how to approach the optimal levels of inputs when there are three variables. My current understanding is that the problem is to solve the ...
-1
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0answers
49 views

Pure strategies in Game theory

im really lost and spent ages trying to understand this: what is the exact definition of a pure strategy in game theory? how can one find/identify a pure strategy in a pay-off matrix? i.e. what ...
0
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1answer
65 views

Can government just print a little of money to purchase some foreign resources?

We know that government shouldn't just print money, because it's gonna be bad. Bad what if to do it in a small scale, just a little, for example to hire some scientist (probably nothing gonna happen ...
1
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1answer
14 views

Why salaries counted under Government expenditure in GDP

In the expenditure approach of GDP calculation, why are government employee's salary counted under Government approach while for private firms, we don't count salaries. I am unable to understand if ...
2
votes
1answer
56 views

Regular annual pension

I am supposed to solve the problem: A 24-year-old man decides to invest 200,000 euros at a 7% annual interest rate to bring him a regular annual pension from 31 to 50 years inclusive. What will be ...
0
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2answers
47 views

price, currency rate and quantities effects on sales revenues [closed]

I am interpreting the august dashboard of our company In fact, the problem is the interpretation of sales revenue ,because, it depends from three factors with different changes In fact: Sales ...
4
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0answers
27 views

Estimates of magnitude of externalities generated by education?

It is standard to claim that education generates positive externalities. For example, Mankiw (2017, Principles of Economics, p. 193): education also yields positive externalities. One externality ...
1
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1answer
44 views

Can we stabilise the price of a cryptocurrency?

Currently, the volatile price of cryptocurrencies such as Bitcoin means that they are currently poor stores of value and therefore are unlikely to achieve mass adoption. What can be done to stabilise ...
0
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1answer
75 views

A question about MWG Exercise 3.D.4

I'm doing exercises of Chapter3 of MWG, there's a problem that I don't understand (I didn't figure out the solution manual either...). It is about exercise 3.D.4, the full statement of the exercise ...
0
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1answer
35 views

Do all prices just reflect absence of information?

In information economics, information has economic value because it allows an agent to make better decisions. For example if an agent needs to buy some good, he will benefit from knowing about the ...
0
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1answer
62 views

Econometrics: why the i.i.d assumption and weak exogeneity assumption imply strict exogeneity?

The proposition is from lecture notes of advanced econometrics of Yongmiao Hong: A1: $\{Y_t,X_t'\}_{t=1}^n$ is an i.i.d. random sample. A2: $E(\varepsilon_t|X_t)=0$ almost surely with $E(\...
0
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0answers
11 views

Pricing Cross-Side Platform Mediated Markets

I have a question regarding the optimal pricing strategy for cross-side Platform Mediated Markets. Suppose we have two categories A and B, 100 potential customers each. How do I derive the optimal ...
1
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1answer
40 views

Short cuts to solve Cobb Douglas Utility function (minimization)

Say a Cobb Douglas like: $$\max_{X,Y\: s.t. X \cdot P_x+ Y \cdot P_y=I} U=X^\alpha Y^\beta$$ When it comes to maximization I would do the following way (for the fastest result): x: $\alpha/(\alpha +...
0
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1answer
50 views

How to prove that profit function is convex in price (with smaller price)?

According to this site, if output price increases from $p*$ to $p'$ and factor prices remain constant, then a new production bundle chosen must yield at least the same amount of profits as the old ...
1
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0answers
33 views

Does quasilinear preference contain rationality, monotonicity or other assumptions?

I have a question when I'm doing exercise 3.C.5(b) of MWG. The exercise asks to prove that a continuous preference on $(-\infty,\infty)\times R^{L-1}_+$ is quasilinear with respect to the first ...
0
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0answers
29 views

Deflation and Wealth Inequality

I've just seen an article where the author states that deflation has the possibility of reducing wealth inequality. His rationale is as follows: When deflation occurs, the prices of assets falls (he ...
1
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2answers
47 views

Price Elasticity of Demand - elastic demand and impact of price reductions on total revenue

A question in relation to Price Elasticity of Demand. My understanding is that when demand is elastic, a price reduction will increase total revenue. If the price of a product changes from \$100 to \...
0
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0answers
13 views

Why is the state variable in Brock-Mirman model bounded above?

as a beginner in macro, I'm trying to understand the Brock-Mirman model for one of my assignments and I am told (in the assignment) that there is a $k^*$ such that k is bounded. From the production ...
1
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3answers
78 views

How long can I live in the United States with my German monthly income?

I see different (more or less abstract resp. specific) approaches to compare wealth (of individuals, regions, and countries): by living standards by living expenses by incomes/salaries by purchasing ...
1
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1answer
18 views

How to calculate PPP$ from LCUs?

Is there one single formula which allows to calculate the income of a person in PPP\$ from her income in LCUs (local currency units), given for example the PPP conversion factor, GDP (LCU per ...
9
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1answer
76 views

Weakly monotone preferences with singleton indifference curves: do any of them admit a utility representation?

Inspired by this question. The original question was answered by Amit with some nice examples. I would like to know the generalized answer: Suppose we have a preference ordering $\succeq$, which is ...

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