All Questions
15,486
questions
3
votes
1
answer
24
views
How to measure changes in consumer surplus empirically?
I am familiar with various ways of measuring consumer surplus "on the blackboard" (Compensating Variation, Equivalent Variation and simply measuring from the ordinary demand curve). Im ...
- 8,295
1
vote
1
answer
59
views
Proving the existence of mixed-strategy NE for 2-player zero-sum symmetric game
I am trying to prove the existence of mixed-strategy NE for 2-player zero-sum symmetric game, under the condition that given they have $I$ pure strategies and for the pay-off matrix $A$, $\exists x\in ...
- 31
0
votes
0
answers
28
views
What is a rational bubble? What are some well known models for rational bubble?
Rational bubble is a situation in which price of asset exceeds its fundamental value and people are buying the overpriced asset because they think that they can sell it for higher in the future. Is ...
- 157
1
vote
1
answer
123
views
The sufficient condition for unique interior solution in utility maximization problem
Suppose the utility function is continuous, differentiable, strictly increasing and strictly quasiconcave. Whether the utility maximization problem has unique interior solution? If not, is there any ...
- 23
3
votes
5
answers
9k
views
How is Italy so rich, given its high corruption and crime?
Much of Italy's territory is de facto controlled by organized crime, rather than the State.
The corruption of its long time leader, Silvio Berlusconi, was all but record breaking.
Given the above one ...
- 197
0
votes
0
answers
2
views
How can I learn about the availability of daily or higher frequency data?
I am interested in the process of nowcasting--updating forecasts of economic activity based on data at the daily frequency or higher Several of the Feds produce daily nowcasts of the GDP. But the only ...
- 315
3
votes
1
answer
40
views
Social Welfare Function (Pareto Efficiency)
What is the Pareto efficiency compensation criterion?
Can you give me an example?
1
vote
0
answers
7
views
Is there a good catalogue of time serries available from the Federal government?
I have two closely related questions that I will present here in separate postings. It seems that lately I have spent a great deal of time looking for particular time series that may or may not exist. ...
- 315
0
votes
2
answers
70
views
Would it work? A tax that automatically toggles on-off
Could we create a tax that automatically toggles on or off depending on the state of the economy taking into consideration that the revenues would be saved for further use, either to stimulate the ...
0
votes
1
answer
104
views
Determine Whether A Preference Relation Satisfies The Continuity Axiom - from Exercise 1.1 in Game Theory: Analysis of Conflict by Roger Myerson
I am self-studying game theory using Game Theory: Analysis of Conflict by Roger Myerson. Here is an exercise from the textbook. I tried it myself, but I am not sure if it is correct. I would really ...
- 251
1
vote
1
answer
118
views
A generations funds to reduce the debt
In Canada, the Province of Quebec created a generations fund in 2006 in order to reduce the debt.
As of March 2023, Québec’s net debt stands at $206.8 billion, or 37.4% of GDP..
Do you know if any ...
0
votes
1
answer
21
views
Stable Outcomes and Matching Models for the Labor Market
I am reading a paper that discusses mathcing of workers to firms in the labor market (see the excerpt below). Here an outcome $(\mu,\pi,w)$ consists of a matching function pairing workers to firms, a ...
- 1
1
vote
1
answer
83
views
y is weakly preferred over x if and only if x+y ≤ 4 defines a preference relation on {0,1,2,3} why is this incomplete?
y is weakly preferred over x if and only if x+y ≤ 4 defines a preference relation on {0,1,2,3}. True or False?. I can see why it's not transitive but I was told it was incomplete if we take 2 and 3. ...
- 31
0
votes
1
answer
143
views
Are all allocations on UPF pareto optimal?
Are all allocations on UPF pareto optimal?
Was studying this in context of Public and Private goods. If someone can help.
- 3
2
votes
2
answers
79
views
Microeconomics exercise on returns to scale
I have an exercise in microeconomics that exhibits the following function
Y = L^(1/2) * (W^(1/2) + K^(1/2))
With L = labor, K = capital, W = water
In a first question, we are asked to find what the ...
- 21
2
votes
1
answer
86
views
Help with a proof for an quite intuitive Utility optimization problem
Assume $U(x,y,a,c )= - c x + B(x,y,a)$, with $\frac{\partial B(x,y,a)}{\partial c }=0$, and with $a$ and $c\geq 0$ being parameters, and with $x$ and $y$ being variables. Further, $B(x,y,a)$ is ...
- 95
1
vote
0
answers
18
views
Gopinath et al (2019)
I am looking for explanation and demonstration on the Gopinath model:
The per-period utility function is separable in consumption and labor and given by:
$$U(C_{j;t};N_{j;t})= \frac{1}{1-\sigma_c}C^{1-...
- 11
0
votes
0
answers
27
views
Principal agent problem with correlated output
I am a bit confused by one question I am working on since some of the questions seem to suggest a differnt answer from the one I get in the earlier question. Here is the exercise and my working.
One ...
- 648
1
vote
1
answer
60
views
Quasiconvexity of the indirect utility function for Cobb-Douglas utility
I've recently started Mas-Colell's, Green's and Whinston's Microeconomic Theory. In section 3.D, the authors define the indirect utility for a price vector $p$ and wealth $w$ as the utility derived ...
- 283
0
votes
0
answers
26
views
What is a correct way of writing conclusion based on a country's data
Suppose I use the US data and find that unanticipated increase in the interest rate reduces the stock prices. Then, do I conclude "Based on the US data, unanticipated increase in the interest ...
- 157
0
votes
3
answers
56
views
What happens to supply when a company can produce two different products
Let's suppose there is a company that can produce two goods: A or B. The price of good B increases. This will result in an increase in the quantity supplied of good B, but does this result in a ...
- 13
0
votes
2
answers
45
views
Doubt on Calculation of MR
So this is very beginner level doubt.
I know $ MR = \frac{\partial TR}{\partial q} $ . So TR need to be in terms of q to differentiate. This helps us to find Optimal Output level in Monopoly by ...
- 3
1
vote
1
answer
82
views
Ramsey model condition
Why are transversality conditions and no-ponzi game conditions needed in the Ramsey model? And why do we assume that is a CIES utility function?
- 111
0
votes
0
answers
37
views
how to Log-linear this equation?
I am working on my thesis, doing a model with energy price. I am following this paper "Energy Price Shocks and Financial Market Integration: Evidence from New Keynesian Model", Tarek ...
1
vote
0
answers
31
views
What is the relation between Blackwell's order and Stochastic Dominance order?
In Kamenica and Gentzkow (2017) as well as in Bergemann and Morris (2016) the notion of Blackwell comparioson of experiments is used to compare different information structures. I am trying to find ...
- 184
2
votes
1
answer
119
views
Information asymmetry and market failure
Markets with information asymmetry frequently result in a loss of efficiency relative to perfect information, see e.g.; moral hazard.
Yet I have seen the claim
Information asymmetry isn't a market ...
- 28.6k
1
vote
0
answers
75
views
How is it possible to have perfect balance of supply and demand?
How is it possible to have perfect balance of supply and demand?
That is, e.g. the right amount of workforce compared to the amount of work.
Background (as asked by Giskard in the comments):
It's ...
- 305
0
votes
2
answers
34
views
How does a bail bondsman make a profit?
I hope I'm asking this on the right site and used the right tags.
When looking into the concept of bail bonds on Google, I was told bail bondsmen are paid a fee to post a defendant's bail- but also ...
- 109
0
votes
1
answer
40
views
PER CAPITA SPENDING - IS THERE A MODEL?
In 1975 the world population reached 4 billion people.
In 2023 it reached 8 billion
In 1975 the US population was 211 million.
Today it is 340 million.
Considering that:
1- we now have more people, ...
0
votes
1
answer
38
views
Future value of a "future" investment
Consider the following well-known simple exercise :
You have a loan outstanding. It requires making three annual payments
at the end of the next three years of $1,000 each. Your bank has
offered to ...
- 119
0
votes
0
answers
52
views
Cobb Douglas Indirect Utility/Expenditure continuity proofs
How should I go about proving that the general Cobb Douglas indirect utility function and expenditure functions are continuous? There are many ways to prove continuity, but which would be the easiest? ...
- 31
0
votes
2
answers
58
views
Why is a greater than 10 year fixed rate mortgage typical in the U.S.?
A quote from the Economist on 2023 September 7...
If you are American or Danish, the answer may well be that you have a
fixed interest rate for the duration of your mortgage. As a result,
you may pay ...
- 915
0
votes
0
answers
33
views
Intertemporal consumption with heterogeneous/multiple goods
I'm currently trying to build a CGE, and I'm stuck at the household's problem which is about intertemporal utility maximisation. The household consumes multiple heterogeneous goods $C_i$ (I'm limiting ...
- 21
0
votes
0
answers
11
views
The equation for ad valorem or value tax is given by (1 + τ ) p1x1 + p2x2 = m. Does this imply that higher the p1 higher the tax?
In other words, do luxury goods get taxed more while cheaper goods are taxed less in the case of value tax?
Any insight would be appreciated. Thank you!
2
votes
1
answer
95
views
Transitivity of Preferences paper
I am going through some of my old grad school notes, and in my microeconomics notes on transitive preferences, the teacher made a note of a behavioral economics result where when presented with two ...
- 6,578
1
vote
3
answers
94
views
Is the supply and demand elasticity equal at the equilibrium?
I am working through homeowrk problems and we were asked to calculate the supply and demand at the equilibruim using either the point or arc method. I chose to use the point method and will provide a ...
- 21
0
votes
1
answer
101
views
Was must we invest in the highest NPV project?
I have this simple problem about Net Present Value (NPV) and I was wondering why should we maximise it.
Suppose you have a firm and you can either sell it now for $ \\\$ $ 200.000 or invest $ \\\$ $30....
- 119
0
votes
0
answers
15
views
How does Perfectly Competitive Output Level Compare to Cournot Output Level
So Let there be two firms with Output Level x1 and x2 .Inverse Demand Function $P=a-bX $ where $ X=x1+x2 $.Both firms have same MC denoted by $c$. Is the Perfectly Competitive O/t > Cournot O/t ...
- 3
3
votes
1
answer
45
views
Consumer theory with subproblem
Say the agent's problem is
$$\max_{c,\{h\}, N}\{U(c, v(\boldsymbol{h} ; \boldsymbol{\theta}))+\lambda(w N-c)\}$$, subject to $\sum_{i=1}^{I} h_{i}+N \leq 1, \quad N \in \mathcal{N}$.
Assume $U(c, v(\...
- 2,339
1
vote
1
answer
43
views
Proving Expected Utility Theorem
I am struggling to understand the proof of the second step in the Expected Utility Theorem, particularly the part that deals with preferences over weighted sums of lotteries. The statement I am trying ...
- 13
0
votes
1
answer
174
views
If the government subsidizes electric vehicle (EV) purchases , then we can predict a higher price for non-EV vehicles?
Hello this question came across on my homework. Here's what I know so far. I know the answer is false, but given we need to produce two graphs I am confused on how to represent my knowledge in two ...
- 21
0
votes
1
answer
27
views
Difference in Difference - how to choose the control group (difference with no clear trend, parallel series or cointegrated?)
I'd like to use difference in difference methodology to test the impact of a treatment. Being the formula of the regression:
...
- 101
0
votes
0
answers
22
views
Assessing multiple Treatment Effects in Overlapping Interventions for difference-in-difference
I am currently working on evaluating the impact of two sequential treatments, Treatment 1 and Treatment 2, on two distinct groups in our country: Group A and Group B. Treatment 1 is administered at ...
- 111
0
votes
1
answer
61
views
Does monetary policy render mathematical models for short-rates nearly useless?
Note: please do note that I am a tech person with no economics background.
I've been studying short-rate models so much for interview purposes and finally took a step out of the weeds to think about ...
- 101
0
votes
1
answer
60
views
How often (if ever) do currency exchange cross rates differ from actual rates?
Do major currencies' cross rates ever differ from their actual ('bilateral') exchange rates, and if so, how often does it happen in practice?
I guess it would never happen (beyond, say, the fourth ...
- 671
1
vote
1
answer
86
views
About Characterization of Homothetic Function - Mathematics for Economists by Simon and Blume Chapter 20 Exercise 18(3)
I am studying homothetic function and got the following problem:
Problem
Determine whether the function $x^3y^6 + 3x^2y^4 + 6xy^2 + 9$ is homothetic or not.
Here is my attempt.
My Attempt
I did it ...
- 251
0
votes
1
answer
71
views
Is there a name for adjusting bad regulation until its negative impact is no longer detectable?
Taking (a highly simplified view of) Minimum Wage as an example:
A standard "pro" argument is that an effective Minimum Wage increase improves the standard of living of the lowest-wage ...
- 101
0
votes
1
answer
64
views
Would a GDP measure be improved by excluding foreign interest paid?
The income method of calculating GDP is as follows:
GDP = wages + profits + rents + interest + depreciation + taxes + NFFI.
If an economy has high external debt, for instance, because it used external ...
- 3
0
votes
0
answers
16
views
Interpreting event study estimates
I am running an event study analysis (I am still very new to this method) and I tested the impact of belonging to a certain age cohort on vaccine uptake (conditional on belonging to a minority group). ...
- 103
0
votes
1
answer
44
views
Does it make sense to evaluate a country's debt in GDP based on PPP?
Consider a fictional country Gudzan-Tservijstan with a GDP of \$100bn USD, a total (public and private) debt of \$100bn USD, and a PPP conversion factor of 2.
Are there advantages to considering the ...
- 101