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0answers
21 views

Determinants of inflation expectation

What are the most important factors that determine inflation expectation in a country, both based on theoretical models and on empirical evidence? If an answer is too lengthy for the site, reference ...
1
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1answer
32 views

Economic growth in a DSGE model, despite mean-zero shocks

The DSGEs I've seen have steady-states, and mean-zero shocks. Can these predict growth in GDP / capital etc? Is this possible despite them being equilibrium models, or do you have to completely change ...
5
votes
1answer
40 views

C-statistic when one estimation is just identified

My question is motivated by Do, Joshi, and Stopler's paper "Can Environmental Policy Reduce Infant Mortality? Evidence from the Ganga Pollution Cases". A simplified form of their models that ...
1
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1answer
29 views

Splitting GDP between population

When looking at the average incomes in a country it is necessary to distinguish between mean income and median income. Mean income tends to be distorted by high earners, so typically median income is ...
0
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1answer
23 views

Any difference between the DWL results from tax and binding price ceiling, what makes govenment choose one over another?

Same as the title. From the Graphs, I cannot see any difference or what makes policymakers to distinguished those two? Here is the capture from Perloff's textbook. Now compare this with the case that ...
2
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1answer
137 views

Black Market Resilience

In many countries drugs like marijuana are being increasingly legalized or at least decriminalized. In such circumstances, you would expect the previously illegal or bootleg marijuana producers to ...
1
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1answer
62 views

Why supply is more elastic at lower prices and more inelastic at higher prices?

In my economics book*, in the lesson explaining what price elasticity of supply is, it's written: In reality, supply curves are likely to be non-linear, so will have a different PES value at ...
1
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0answers
38 views

Why do supply curves that start at the origin have a PES value of 1?

In my economics book*, in the lesson explaining what price elasticity of supply is, it's written: Any supply curve that starts at the origin has a PES value equal to 1. The theoretical outcome means ...
1
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0answers
32 views

Deflating value series in currency A with CPI based on prices in currency B?

Say we have time series data on the annual value of imports in the UK from the US (in US dollars). Would it be appropriate to deflate the latter using the UK Consumer Price Index (which is based on ...
0
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1answer
44 views

Why West Virginia is one of the least-vaccinated states in the country due to cash giveaway announcement?

In a newspaper, I saw the paragraph In some U.S. states that held lotteries for vaccine recipients, with some prizes reaching the million-dollar mark, leaders reported upticks in interest, but it’s ...
1
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2answers
112 views

Curiousity the validity of an example of normative, positive and consumer surplus?

Following up a pretty long but very informative discussion with 1muflon1, I want to expand and merge with consumer surplus to have a big picture. In research of Dasgupta, 2019 about that after ...
2
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1answer
106 views

Is there any overlap between Rawlsian approach and uncertainty avoidance?

From the definition of the Rawlsian approach The Rawlsian approach to social welfare, built on the foundation of the “veil of ignorance” (Rawls, 1999, p. 118) where "veil of ignorance" is ...
1
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1answer
90 views

Is there any example to see the differences among Rawlsian ethics, Utilitarianism or (classical) liberalism ethics in policy economics?

From a decent answer and comment here of 1muflon1, I am motivated to know more about Rawlsian ethics, Utilitarianism, or (classical) liberalism ethics in policy economics. However, so far, I still not ...
0
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1answer
31 views

Cash flow of a loan (perspective of a bank)

if you receive a loan from a bank, how does the cash flow of the bank look like? I found the following: https://fincomplete.com/ratgeber/artikel/wie-berechnet-die-bank-meine-kreditzinsen-2 (...
1
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1answer
116 views

Can making everyone in a country rich be detrimental to the economy?

Let's say that everyone in the nation of Tigerville is given US$1,000,000. People would want to buy more goods since they have become considerably more wealthy. However, the sellers of the goods may ...
0
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2answers
227 views

Why "positive theory" is important in discussions of how antitrust law achieve "normative goal"?

In this description regarding positive theory and normative theory, from what I understand, positive theory is based on fact and cannot be approved or disapproved (e.g., explain how the economy ...
1
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1answer
58 views

Is Google Street View profitable?

For many years, Google offers this amazing service called Street View, where they show us full panorama photos taken by special cars that drive on a number of roads, even the most remote ones. It's ...
2
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0answers
59 views

Easy introduction to Markov processes and dynamic programming [closed]

I am taking advanced macro course in Fall. Could you please advise me a simple introduction to Markov processes and dynamic programming? I mean easy. Thanks!
1
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0answers
46 views

IS equation in a DSGE: interpretation

I am solving a DSGE model and I derived the following expression for the IS equation: However, I have some problems interpreting this equation. How would you interpret it? is the domestic output is ...
1
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1answer
29 views

Interpreting ACF Plot if all its variables exceed confindence interval

I have plotted an ACF plot and found all its lagged variables exceed the confidence interval range. I have tested again with Ljung box test on its residuals and most of the lagged variables have a ...
-1
votes
1answer
43 views

Curiousity about the accuracy of an example about consumer surplus

Consumer surplus is an economic measurement of consumer benefits. A consumer surplus happens when the price consumers pay for a product or service is less than the price they're willing to pay. It's a ...
5
votes
2answers
349 views

Correlated equilibrium intution

What is the difference between the correlated equilibrium with the mixed strategy Nash equilibrium? Even further, how is this related to the Bayesian correlated equilibrium with complete or incomplete ...
1
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0answers
28 views

How do currency boards maintain a 100% foreign reserve backing in the presence of fractional reserve banking?

Under a currency board system, money in circulation has to be 100% backed by foreign reserves. Suppose the domestic currency (A\$) is 100% backed by a foreign currency (B\$), with a fixed 1:1 ratio. ...
3
votes
1answer
41 views

Is there an empirical model for studying contemporaneous feedback relationships?

In a DSGE model, monetary policy shock (Taylor rule style) increases interest rate. So output and inflation falls, which feedback contemporaneously to the interest rate. Thus, interest rate ($i_t$) ...
1
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1answer
658 views

How can I prove this?

I was reading a book on econometrics and I found this algebraic transformation and I don't know how I can get there.I would appreciate some help. $\sum_{i=1}^n (X_i-\bar{X})\cdot (Y_i-\bar{Y})=\sum_{i=...
1
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1answer
29 views

Synthetic Control Asymptotics

I'm aware of the basics of the synthetic control method, and that permutation tests are commonly used for inference. Are there papers that develop asymptotic theory? i.e. if the regression approach to ...
1
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0answers
16 views

margins with option predict Stata 17

I used to run this code in Stata 15: ...
3
votes
2answers
644 views

Do governments have to pay interest on government debt held by the central bank?

Through open market operations, the central bank may buy government debt to increase the money supply. Does the government need to pay interest on the debt held by the central bank, or does the debt ...
0
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0answers
28 views

Asking for some research and application of Gini index in academic researches?

I am reading Gini index, which is a measure of the distribution of income across a population. It is often used as a gauge of economic inequality, measuring income distribution or, less commonly, ...
2
votes
1answer
30 views

Large National Debt by borrowing money from foreign sources

I have a question about the greater severity of large national debt caused by borrowing from foreign sources. I am reading a book about elementary Economics and am currently on a chapter discussing ...
1
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0answers
37 views

Will financial markets always heavily penalize the company if the CEO criticizes its products?

https://en.wikipedia.org/wiki/Stephen_Elop#%22Burning_Platform%22_memo https://communities-dominate.blogs.com/brands/2011/08/coining-term-elop-effect-when-you-combine-osborne-effect-and-ratner-effect....
1
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1answer
32 views

Is cost for "discount for early payment" is opportunity cost?

Deloof (2003) states that On the other hand, late payment of invoices can be very costly if the firm is offered a discount for early payment. This sentence means that if the firm cannot pay back ...
4
votes
2answers
459 views

What is the difference between money and currency?

Is money an intangible concept and currency a way to make it physically present? If not, then what is the difference?? Please dont duplicate it as i have read other answers and then asking.
2
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0answers
30 views

Where to update the data regarding "total criminal antitrust" fines globally in $US and days?

Dasgupta, 2019 have the data for Total criminal antitrust fines from 1990 up to 2012 Total criminal antitrust fines increased from $107 million in 2003 to $1.1 billion in 2012, and total prison ...
4
votes
1answer
149 views

Pigouvian tax equivalent to Coasian payments

Consider an economy with two goods, $x$ and $y$. Suppose person a's consumption of good $y$ imposes a negative externality on person b. Person a's utility maximisation problem is $$\max_{x_a,y_a} \ ...
2
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3answers
61 views

Krugman article - Government debt helps avoid a destructive scramble for cash?

I was just reading this Krugman article which contains the words... I’ve already mentioned that having at least some government debt outstanding helps the economy function better. How so? The answer, ...
1
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1answer
45 views

Speculating about causal effects

Let's say I have some mechanism that theoretically says $a_t$ positively affects $b_t$ and $b_t$ positively affects $c_t$. I have data on $a_t$ and $c_t$ but not $b_t$. Thus, $b_t$ is unobserved. I ...
0
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0answers
32 views

Definition of Gini coefficient

I am reading the definition of Gini coefficient. The Gini coefficient is a single number that demonstrates a degree of inequality in a distribution of income/wealth. It is used to estimate how far a ...
2
votes
1answer
29 views

The link between economic growth, inflation, interest rates and fiscal deficit

I want to ask a question about how economic growth, inflation, interest rates is linked to fiscal deficit. I was reading a book on introductory economics and the following passage came up: If a ...
6
votes
3answers
273 views

Does I(1) imply a process is cointegrated with its lag?

My question is about the definition of cointegrated. $y_t =y_{t-1}+u_t$ $u_t =\eta_t +0.5\eta_{t-1}$ where $\eta_t\sim N(0,1)$ is i.i.d. white noise. I claim that $y_t$ and $y_{t-1}$ are cointegrated ...
0
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1answer
29 views

How to convert non-annual interest rate to annual interest rate?

If a student makes monthly deposits of 1,200 into an account with a nominal annual interest rate of 4.5% compounded monthly, will he have enough after 5 years to purchase a $105,000 property in cash? ...
8
votes
1answer
64 views

Is "avoiding being the bearer of bad news" an example of the "principal-agent problem"?

For example: A king designs a bridge, and he unknowingly does a bad job. He asks an engineer for her opinion, but the engineer fears that if she tells the truth, the dictator will be angry with her. ...
1
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0answers
24 views

Are there any state-level data on US banking regulation stringency?

In Barth, Caprio, and Levine (2008) Rethinking bank regulation: Till angels govern. Cambridge University Press, authors assemble and showcase large dataset on stringency of banking regulation and ...
4
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0answers
36 views

CES utility with negative values

We know that the CES utility function approximates a Leontief utility function as in the following: $$u(x_1,x_2) = (x_1^{-r}+x_2^{-r})^{-1/r}\overset{r\rightarrow\infty}{\longrightarrow}\min\{x_1, x_2\...
4
votes
2answers
85 views

Relation between budget deficit and inflation?

In Iran we have had a high inflation rate for several decades (usually above 20 percent). Some of the top economists of the country say that it is mainly because the government spending is ...
5
votes
1answer
68 views

Pigouvian tax with general utility function

Suppose person a's consumption of good $y$ imposes a negative externality on person b. Person a's utility maximisation problem is $$\max_{x_a,y_a} \ u_a(x_a,y_a),$$ subject to $$p_x x_a+p_y y_a=e_a.$$ ...
0
votes
1answer
26 views

Aggregate demand and Real GDP

I understand that aggregate demand is the demand for all goods and services in an economy. However, I later found out that aggregate demand and real GDP are calculated using the same formula, so does ...
0
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2answers
55 views

The geometry of cities (reference request)

I am interested in reading up on the geometry of cities: what explains their ‘shape’ (e.g. why is the population often distributed in a rough circle)? I imagine that this is a question with some ...
1
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0answers
35 views

My microeconomics question [closed]

What is the case in which consumer surplus decreases despite increasing demand? And in terms of supply, when certain conditions are met, is this more likely to happen?
1
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1answer
53 views

Does this model of housing economy have a name, and if so, what are the common critiques?

I've been thinking about housing and the problem of rent recently and I came up with a simple idea that I'd like to explore further: what if renting a property transferred some ownership over time? ...

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