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24 views

Need Clarification of Terms: Innovation v.s. Disturbance

I have been reading some econometrics paper and came across terms "innovation" and "disturbance" of regression models. Can someone please explain to me what they are? I have ...
3
votes
0answers
15 views

Modeling GARCH in R with other factors

I am new to GARCH model. I want to build a GARCH-in-mean model with the following forms $$ r_t = \mu + \lambda \cdot h_t + \sum_{i=1}^n \alpha_i \cdot X_{i}(t) + \epsilon_t$$ where $\epsilon_t$ ...
1
vote
0answers
34 views

Stable roommates problem: returning a list of ideal matches, even when stable matching doesn't exist

I am trying to find a way to return a list of ideal matches based on preferences. This is similar to the Stable Roommate Problem. I have a list of people, and each person has ranked everyone else from ...
5
votes
1answer
153 views

What are some important papers using difference-in-difference in economics?

I'm new to difference-in-difference method and wanted to familiarize myself with the literature. I'm familiar with Mostly Harmless Econometrics and the papers on DiD discussed in the book. I would ...
3
votes
1answer
37 views

Was there any currency backed by other metals than gold, silver or copper?

Was any other metal than gold, silver or copper ever in history used to back a currency?
0
votes
2answers
62 views

When was the last time printing money involved actual printing?

A common term used when the money supply is being increased is "printing money". Presumably at some point in the distant past, currency was actually printed to increase the money supply. Of ...
5
votes
0answers
33 views

Comparing voting methods when there are only two voters

Consider the Schulze, Kemeny-Young, Ranked Pairs and Borda count voting methods. (The last is obviously the odd one out in this list!) Suppose that there are only two voters. Each voter gives a ...
5
votes
1answer
63 views

Nonlinear Least-Squares Estimation in Practice

I am reading Jeong, Kim, Manovskii 2015 and in the paper they apply "a nonlinear least-squares method" to estimate a log-wage equation, , where $D, \Pi$, all $\lambda$s $\theta$s, and $\...
3
votes
0answers
38 views

Kleibergen Paap F-statistic

I have commonly seen references to a Kleibergen and Paap F-statistic. In their paper, I see a derivation of a chi-squared statistic, but don't see any references to the F-distribution or F-stat. In ...
0
votes
1answer
50 views

What are the hypothesis and results explaination of joint null test?

When trying to satisfying the paralell assumption in Difference-in-Differences setting, I have the equation: $$ y_{kt} = \alpha_k + \lambda_t + + \delta_{-4} d_{k,t-4} + \delta_{-3} d_{k,t-3} + \...
0
votes
2answers
40 views

Percentage increase of the price of a good if there is a pay raise

I have a question about the percentage increase of the price of a good if there is a pay raise given to the firm's workers. I am reading economics for my own personal interest so I apologise if there ...
0
votes
1answer
14 views

Theoretical equivalence, experimental distinction between GDI and GDP

Forgive me if this is a naïve or redundant question, I'm about 24h into my study of economics--but I've been trying to research this question and can't figure it out. Why does the national spending ...
2
votes
1answer
79 views

Analyzing a Gambling Race Paradox

Suppose a number of players are given $100$ points each, and repeatedly engage in a gamble having positive expected value, with the goals of being the first player to reach $100000$ points. Solving ...
0
votes
1answer
37 views

Relationship between capital and decreasing marginal prodcutivity

In Capital by Thomas Piketty ( chapter The capital - labor spit in the twenty first century - page 271) we have below quote The evolution of the rate of return on capita, r, significantly reduces the ...
1
vote
2answers
30 views

What is the proper way to read and/or express "price elasticity of demand"?

The natural language phrase such as square root of x for a function $Sqrt(x)$ precedes the input with the word of. When we talk of a bivariate function, such as $x/y$ aka $Ratio(x,y)$, we say simply ...
4
votes
1answer
36 views

Error while estimating a production function with prodest package in R

I have an unbalanced panel with 15063 firms between 2012 and 2018. I am using this code to estimate the production function with Levinsohn & Petrin method: ...
1
vote
0answers
12 views

Are there intermodal tramp freight carriers?

I'm working on a fictional system where shippers -- companies with bulk goods to ship -- post contracts stating an origin, destination, and number of cargo containers. Carriers -- whether by air, land ...
5
votes
1answer
51 views

Why are there so many small farm operations in the US?

Due to the economies of scale that I would expect a large farm operation could provide, I would think the US would be dominated by only a few farming companies. But in reality it's populated by a ...
1
vote
1answer
40 views

Algebra for two period forecasting in AR (3) Model

I wondered if some folks could help fill in a knowledge gap for me with some time-series algebra please regarding the following AR (3): $$x_t = \phi x_{t-1} + \phi_2 x_{t-2} + \phi x_{t-3} + \...
3
votes
1answer
86 views

Is chess both a game of complete and perfect information

It is known that chess is a game of perfect information as all the possible moves as well as the first moves are known to all the players, but is it a game of complete information? We know the final ...
3
votes
1answer
37 views

What would be the Dual Expected Utility function for an English Auction?

So the DEU function is $$V(p)= \Sigma \,x_i\pi_i(p),$$ and since an auction only has two outcomes for a bidder, failure (with probability $p$) or success (probability $1-p$) the function becomes $$V(p)...
0
votes
1answer
34 views

What is the difference between controlling for exchange rate change and inflation?

In a paper, I saw Dasgupta, 2019 control for the exchange rate change. Normally, I control for inflation. From my view, these two variables seem to play the same role, leading to a multicollinearity ...
0
votes
0answers
11 views

Why we need to control for import and exchange rate change when examining asset growth?

Dasgupta , 2019 examines the impact of antitrust laws on asset growth, total net external financing, debt-to-equity ratio. In his regression, I saw that he controls for imports as a percentage of GDP, ...
0
votes
1answer
24 views

Effect on price of sudden oil supply drop

If tomorrow the supply of oil dropped 5, 15, 25% … etc how much would the price per barrel increase? I would be happy with even a rough estimate but I would like some kind of justification. The ...
2
votes
1answer
110 views

GDP doesn't add up in FED data - why?

To visualise the formula: $$Y=C+I+G+NX$$ I downloaded the FED data and plotted it, only to discover the two curves progressively diverge (see chart below). What am I missing? thank you! $Y$ = https://...
2
votes
2answers
132 views

Why was Friedman so wrong about inflation?

In a famous 1977 lecture, Milton Friedman claims that inflation depends purely on the monetary policy and he proves it with a convincing chart (youtube video here) I have reproduced his chart using ...
0
votes
0answers
18 views

Event study on market revenue

I am interested in performing an event study. Can it be modified to assess the impact of an event/s on a market's revenue as opposed to the value of a firm? Thanks
5
votes
0answers
33 views

Controversy surrounding the Fiscal Theory of the Price Level (FTPL)

I recently started reading a draft of John Cochrane's book on the Fiscal Theory of the Price Level. In the preface he states that the "[...] theoretical controversies are over." However, ...
1
vote
0answers
11 views

Finding own price elasticity/cross pirice elastcity

I am looking for a source where I can find the own price elasticity/cross price elasticity of public and private transport for the European countries and each continent. Does somebody know a credible ...
1
vote
1answer
76 views

Is there any source talking about some stock behave similar to Gamestop from 12/2020 to 2/2021?

From 12/2020 to 2/2021 is the time that the price of Gamestop stocks drastically increases. I am wondering is there any US stock that also behaves the same (incidental increase) during this time ...
0
votes
1answer
61 views

Why are so many economists critical of central banks manipulating markets and creating artificial demand?

When demand for liquidity outstrips supply (rate increase in a credit crunch) then the law of supply states that quantity supplied also increases with price (rate decrease provided demand stays ...
0
votes
1answer
64 views

Why do we need independent central banks?

Why should we have an independent central bank? Why can not the govt itself do the job that central bank does? One logic people give is that governments are elected for short term and may take ...
10
votes
3answers
896 views

What is the consensus (if any) on Peters "The ergodicity problem in economics" (2019)?

Peters (2019) made a splash criticizing the theory of expected utility on the grounds that it implicitly assumes ergodicity where this is unwarranted. He stated this applies widely in economics, to ...
0
votes
0answers
15 views

In difference-in-difference method, should I code treatment exposure as 0 or missing for pre treatment rounds?

In my data, there are some pre-treatment rounds, and some post-treatment rounds. I use months of exposure to treatment in my analysis. So for post-treatment rounds, I have positive values for months ...
1
vote
0answers
14 views

Asking for reference to exclude firms belong to "NA", "UNCLS", “UQEQS”, “OTHEQ”, “SUSEQ” industries

I am looking for academic papers suggesting that we should exclude firms in some industries which is : "NA" (Not Avaialble), Unclear (UNCLS), "OTHEQ" (Other equity), "SUSEQ&...
0
votes
2answers
48 views

Does the exchange rate between 2 currencies NOT account for the cost of living (COL) in their respective countries? [closed]

Alice and Bob both live in a country that has a very low cost of living (like India). They are entry-level software engineers straight out of college. Alice works remotely for a US company that pays, ...
-1
votes
1answer
41 views

What does data at individual and aggregate mean? [closed]

When registering an datasource account, I saw the response as below "Will your research present data individually or in aggregate? I am wondering what does "data individually or in aggregate&...
2
votes
0answers
34 views

Deducing beliefs from choices when the Savage Axioms are true

We know, that given a set of possible outcomes $X$, a set of states of nature $\Omega$, and the set of all acts from $\Omega$ to $X$, if a DM has rational preferences over the acts and if the Savage ...
0
votes
1answer
22 views

can Unit Labour Cost > 100%?

I struggle to interpret this ECB chart: click here for the chart Several countries show consistently $Unit Labour Cost \gg 100%$. For example, Lithuania. Cost of labour $\gg$ Total Output, doesn't ...
2
votes
4answers
134 views

Are there any benefits of moderate devaluation of a currency?

The value of Indian rupee has decreased over the years. The government apparently makes no effort to stop or reverse it. Instead they focus on other aspects of development. Observation 1- I see that ...
3
votes
1answer
53 views

VCG mechanism and budget balance

I have a general question on how we state that in VCG (which doesn't balance the budget) we can't distribute the money as it will destroy incentives. I don't understand how for ex. this would affect ...
2
votes
1answer
25 views

Market Measures for Inflation Expectations for Euro zone

If I were to use a market measure for inflation expectations for the USA, I would look at the differential of yields between the conventional and inflation-indexed Treasuries. However, in the Euro ...
5
votes
2answers
98 views

Olivier Gossner - Secure Protocols or How Communication Generates Correlation

The paper of Olivier Gossner in Security Protocols in 1998 has some definitions that confuse me too much. I will cite here these definitions and my questions and I hope someone is familiar with these ...
2
votes
1answer
116 views

Asking for paper or data source mentioning the social restriction due to COVID-19 globally

Regarding COVID-19 response, we have the stringency index. But I am wondering is there any source that documented the first law implementation date or month regarding society restriction (social ...
2
votes
1answer
43 views

Non CES Production Functions

I know CES production functions dominate economics, but I was curious, why? I've never seen a research paper or presentation utilize any form of a production function that is not CES. My question is ...
9
votes
2answers
1k views

Why are utility functions typically assumed to be concave?

Why is it usually required that utility function be concave? Is it because concavity is a necessary (or sufficient?) assumption for a unique equilibrium? Can someone please spell this out for me? ...
3
votes
2answers
63 views

Game Theory exercise collection

I am looking essentially for a comprehensive collection of exercises of standard topics in Game Theory. Ideally, I would like to have a big manual organized by equilibrium concept, starting from the ...
8
votes
2answers
724 views

Did free markets cause the industrial revolution?

I want to know the justification for the posture that "free trade/liberalism caused the industrial revolution". I would like to get arguments, books and video conferences about it. I was ...
1
vote
2answers
81 views

Questions regarding DSGE model

Christiano,2017, abstract stated that Macroeconomic policy questions involve trade-offs between competing forces in the economy. The problem is how to assess the strength of those forces for the ...
6
votes
0answers
37 views

Solving Rational Expectation Models Linear vs. Nonlinear

Since I am coding some linear New Keynesian models in python and solving them under rational expectations (using the method of undetermined coefficients/linear time iteration), I was wondering whether ...

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