All Questions

Filter by
Sorted by
Tagged with
0
votes
1answer
25 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
votes
0answers
39 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
38 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
votes
1answer
39 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
15 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
43 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
192 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 ...
0
votes
1answer
37 views

Debt Held By The Public

Following off the back of this question on debt-to-GDP vs. debt held by public-to-GDP - Difference between "Debt Held by the Public" and "Total Public Debt Outstanding"?: So in ...
0
votes
1answer
24 views

Derive the growth rate of an equation

I have the following equation: $$\mu =\left [s_{\pi }-v(s_{\pi }-s_{W})+\zeta \right ]$$ And I have to derive its growth rate, which is: $$\dot \mu =-\frac{v}{\mu } (s_{\pi }-s_{W})\dot v$$ Do ...
1
vote
1answer
35 views

Why is increased productivity infinitely good

From investopedia: Supply rises with productivity, dropping real prices and increasing real wages; it lifts people out of poverty and allows them to focus on efforts beyond mere survival. I ...
2
votes
1answer
24 views

Rules of total differentials [closed]

What are the rules of total differentials? I. e., given an arbitrary expression of which to take the total differential, what rules can be applied to arrive at the desired result, and how does ...
0
votes
0answers
10 views

what is the methods to check the impact of regulation on gender pay gap

i have a data for for the top 5 manager of 100 companies from 2010-2018 and i want to check the impact of a regulation that limits the max salary of managers in the financial sector on the gender pay ...
0
votes
1answer
22 views

Hep with total differentiation of an AD function [closed]

Is there anyone who can help me with a total differentiation exercize. I am starting with the following formula for AD: $$x=\mu ^{-1}(g+i+e)$$ Where $\mu$ is the Keynesian multiplier. And have to ...
1
vote
1answer
42 views

Why is price dispersion from Inflation called relative price “distortion”?

I know what relative price is and that it fluctuates more frequently in times of Inflation. But what I don’t understand is why it is called “distortion” when relative price dispersion is caused by ...
1
vote
1answer
23 views

Rigorously Defining Newcomb's “Paradox”

I was surprised to find that we did not have a question on this Stack Exchange on this particular problem in decision theory. So I have chosen to add a question on Newcomb's Paradox, though I would ...
0
votes
1answer
35 views

How does interest rate impact exchange rate?

When I’m using the forward exchange rate formula based on non-arbitrage theory, it tells me that a positive interest rate spread (i_domestic > i_foreign)would cause the forward exchange rate(units of ...
0
votes
1answer
60 views

Derivation of aggregate demand function for Monopolistic Competition (based on Combes et. al, 2008)

A specialized question for those, who excel in monopolistic competition and modern trade theories. I am interested in a derivation of an aggregate demand function for a model of monopolistic ...
0
votes
0answers
7 views

Retained Earnings and the Income Approach to GDP calculation

One of the 3 approaches to calculating GDP is the so-called income approach, which states that total income (distributed as salary/wages, interest payments, and dividends) should equal total output. ...
1
vote
0answers
35 views

Does a trade union of YouTubers exist?

Would YouTubers see a sense in having a trade union? For example, to establish policies how much the value of their contribution is. The controversy here is, professional YouTubers make a bet for ...
0
votes
1answer
31 views

How is hyperinflation categorized, and how is it fixed?

I have a few questions about hyperinflation that I’m really curious about: I learned there are two types of inflation - demand pull and cost push. I was wondering if hyperinflation fits into the ...
1
vote
2answers
49 views

How is India able to increase its foreign exchange reserves despite historically running a trade deficit?

Balance of Trade: https://tradingeconomics.com/india/balance-of-trade Foreign Exchange Reserves: https://tradingeconomics.com/india/foreign-exchange-reserves Remittances do help (avg. \$4B/mo) but ...
0
votes
0answers
19 views

Performing good forecasts for the GDP

What forecasting models would you recommend to forecast the GDP? Through a quick research I have found that VEC, VAR, SVAR models are the most common. Are they though good forecasters? Or are they ...
5
votes
2answers
67 views

Why do some businesses choose scarcity as their business model instead of raising the price to meet the demand?

Here are some examples of what I'm talking about: Mass events such as Burning Man, the Olympics, and the World Cup sell out tickets very quickly which forces fans to resort to scalping or using bots ...
0
votes
0answers
29 views

Why is there a need for multiple cryptocurrencies?

Why can't all blockchains use the same cryptocurrency like Bitcoin? Why do each of them have to invent a new cryptocurrency?
3
votes
0answers
26 views

What changes do I, as an individual, experience during a recession?

There is a lot of talk about how we're approaching an economic recession. There is plenty of talk about how that would affect the world at large, but I haven't really found much on the level of ...
0
votes
0answers
8 views

What are the factors on which value of all resources ( good, silver, cash land etc. ) found in world changes over time?

And followed by, Does it right to say that, if any country become rich then other must become poor and vice-versa. If no, then Is it possible that, in certain conditions, all Nation in the world can ...
1
vote
0answers
25 views

Is Bayes correlated equilibrium relevant for dynamic games?

Consider the following classification of solution concepts ...
2
votes
0answers
32 views

How far must one reason up the belief hierarchy?

In games of imperfect information, one must reason about the belief on the state of nature, the beliefs of other player's beliefs of their beliefs, and so on. This is referred to as the belief ...
2
votes
2answers
62 views

Why is consumer surplus the area under the curve?

So I understand that the definition of consumer surplus is the difference between what the consumer pays and what the consumer would have been willing to pay. I just don't understand why the consumer ...
1
vote
0answers
25 views

Regarding Macroeconomic Models

I've recently started my PhD and upon looking at my textbook (the sargent one) I found that it differed greatly from my Masters textbook (Romer) and in turn my undergraduate macro text (williamson). ...
0
votes
0answers
8 views

Acquiring a company :: How to treat working capital

I would like to know if you can help me in a valuation that I am currently working on. Problem framework: -I am valuating company A, which will acquire 100% company B with a 8x ebitda multiple (10M);...
1
vote
1answer
59 views

Is the set of optimal strategies convex in a single-agent decision choice problem?

EDITED with insights from the comment below. Consider a decision maker who has to choose an action among $\mathcal{Y}\equiv \{1,2,...,L\}$. The payoff from choosing action $y\in \mathcal{Y}$ depends ...
7
votes
0answers
79 views

Causes of trade deficit: Multiple views

I am trying to understand the causes and macroeconomic implications of running a trade deficit in the United States, and I came across a few different views on this topic. I'd like to know if there ...
1
vote
0answers
18 views

Difficulty Understanding CPI (Consumer Price Index)

Here's a question about CPI in my microeconomics text (Pindyck), which I don't seem to understand: The price of computers has fallen substantially over the past two decades. Use this drop in price ...
0
votes
0answers
11 views

Reference Request: The Effect of Wealth in Society

I am new to the subject and I am looking for some help. It goes without saying that the economy is the center of society, and the theory of economics deals with that, But I am especially interested ...
1
vote
1answer
45 views

Is it bad for the economy of a country if forreign firms buy companies?

If a forreign firm buys a company. For example a Russian firm buys a British company. Is this good or bad or neutral for the British economy? As I see it, the profits of the company will be going ...
1
vote
0answers
16 views

Is expensive private school a rational investment?

In Australia, successive conservative Federal governments have increased the share of public funding for non-government schools, and for the top schools the amounts of annual funding are many millions ...
3
votes
1answer
44 views

What is the difference between a power law exponent and the Pareto exponent?

I use the poweRlaw package in R to fit a power law to my data. I am trying to figure out what is the value of the Pareto exponent. Assume the probability mass function is defined by: $$ p(x) = \...
1
vote
1answer
48 views

How can the replacement level fertility be 2.1 everywhere in the world?

Common sense would indicate that the replacement level fertility of Norway ought to be lower than that of Sudan due to fewer children dying there. Why, then, is the replacement fertility rate ...
1
vote
0answers
15 views

Terminology for t statistics using cluster robust standard errors

When reporting regression results I typically have put "robust standard errors in parentheses" below or "cluster-robust standard errors in parentheses" when appropriate. In this particularly paper, we ...
2
votes
1answer
41 views

Trembling hand perfection and weakly dominated strategies

It is well known that players cannot use weakly dominated strategies in a trembling hand perfect equilibrium. My question, however, is a little different: does iterated deletion of weakly dominated ...
0
votes
0answers
54 views

Differences between GVA and NVA?

I have studied these 1) Gross value added= value of output- intermediate consumption. 2) Net value added= gross value added- depreciation. But how could we say "Net value added = Gross value of output ...
0
votes
0answers
4 views

Sources of data for GDP and BoP accounts

When an American buys a coffee within the US, how does that 3.50 dollars worth of consumption expenditure make it's way to the US GDP account? Is the information obtained from the company's tax ...
0
votes
0answers
29 views

In this price model, employment grows with higher wages. Makes no sense

Using a Sraffian price model we have that, $p=(1+r)(pA+wl)$ where w (nominal wage rate), r (average profit rate) are scalars; p (market prices), l (labor input coefficients) are vectors; A (producers' ...
0
votes
0answers
19 views

Why people set expectations for economic data beforehand?

For lots of economy/finance-related data, usually there is an expectation, and then people will compare the real data (when coming out) with the expectation, to see if it beats or misses the ...
1
vote
0answers
26 views

Why a Current Account deficit implies a Financial Account surplus [duplicate]

Every macro textbook out there states that if a country has a Current Account deficit, it must have a surplus in the Financial account, but I have not heard a convincing explanation. Imagine a ...
0
votes
0answers
26 views

Which assets beat the injection of money and why?

Suppose a world in which every year $1.03 ^ Y$ liquidity is injected. Which assets could perform better than 3% per year? Growth forecasts for these?
0
votes
0answers
12 views

Corporate finance - capm beta estimation

I want to solve the following problem as an exercise to test my understanding of the capm material: Assume that CAPM is valid. The market portfolio consists of 3 stocks such that $i = A, B, C$ with ...
1
vote
0answers
16 views

One Treated Unit That Becomes Untreated

Suppose I have a set of units $n_i, i = 1,...,N$. One unit was receiving a treatment $n_j = 1$ at times $t=1$ to $t=\tau$. All other units never received the treatment so $\forall t, n_i=0,i\neq j$. ...
0
votes
0answers
19 views

Understanding lognormal distribution of stock prices

I am trying to understand how to correctly use the lognormal distribution. Let's say I have a list of Adjusted Price of a stock, I know that its daily returns is ...

15 30 50 per page