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Alice consumes two goods, almond milk and granola. Let xm and xg be monthly consumption of milk and granola respectively

Alice consumes two goods, almond milk and granola. Let xm and xg be monthly consumption of milk and granola respectively, while pm and pg be the corresponding prices. Suppose that a granola vendor ...
2
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1answer
18 views

Cost Minimization of $f(x) = min(x_1,x_2) + x_3$

The following production function is given, $f(X) = min\{x_1,x_2\} + x_3$ There is a solution here https://math.stackexchange.com/questions/605925/constrained-maximization-of-leontif-utility-function-...
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0answers
3 views

Why do we need at least as many instrumental variables as endogenous regressors to identify parameters in 2SLS?

As the title says. Why do we need at least as many instrumental variables as endogenous regressors to identify parameters?
0
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0answers
6 views

Does the Fed/SEC have tools to address shock-propagation from correlation of fund flows?

Premise In 2017, passively invested assets totaled 37% of mutual funds and ETFs; by 2021 this number is closer to 50% if not more. After the market downturn in (March) 2020, the Fed updated their ...
1
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1answer
14 views

Accounting for household work in the GDP

It is often told that domestic work is not included in the GDP estimates due to difficulty in measuring them. I wanted to know if there are any advances in measuring this, or any alternatives that ...
0
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1answer
25 views

Assumptions on preference relation

This question is from Harvard seminar problem set (Q-3 part b) https://www.studocu.com/en-us/document/harvard-university/economics/mandatory-assignments/econ2020a-14-ps01-please-give-as-much-...
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2answers
22 views

Credit risk of interest rate on excess reserves vs fed funds rate?

I noticed that the interest rate on excess reserves and the fed funds rate are almost exactly the same at all times. Why is this the case? Shouldn't the credit risk of a bank be higher than the ...
0
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2answers
25 views

Why is the prime rate typically 3% higher than the fed funds rate?

What is the right framework to think about the prime rate in relation to the fed funds rate? Idea 1: A bank is safer to lend to than even trustworthy institutions so there's a premium on prime rates. ...
0
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1answer
24 views

Currency and GDP

USA's GDP (at this time) is ~21 trillion dollards, and UK's is ~2.8 trillion dollars, then how come UK's currency is more than USA's. By that I mean, 1 GBP gets you more than 1 USD.
2
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1answer
41 views

Graphics card shortage - why don't they just raise prices?

See e.g. Nvidia CEO: GeForce RTX 3080 and 3090 Shortages To Last Until 2021 (Tom's Hardware, 2020-10-05) The great graphics card shortage of 2020 (and 2021) (BBC, 2021-01-24) Why don't Nvidia and ...
0
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1answer
36 views

max{x1,x2} where P1not=p2

I have seen min{x1,x2} functions representing perfect compliments but have never seen a max{x1,x2} function anywhere in my book or lectures, I also have never seen anything about p1 not equaling p2. ...
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0answers
11 views

Name of scheme where two entities collude

Consider the following scheme that I remember from the sitcom Zach and Cody: One person is selling very spicy food in a hotel lobby, and another person is selling glasses of milk at exorbitant prices ...
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0answers
16 views

Micro economics , opportunity cost theory [closed]

How is the following equation derived? Please help ,why am I being downvoted (https://i.stack.imgur.com/pOF92.jpg)
0
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0answers
17 views

What is the problem of making an instrument valid on condition of a factor?

I suspect I have an instrument that is invalid on account of a specific factor. I read that I can control for that factor to make the instrument valid conditional on it. What would the issue of doing ...
-3
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0answers
24 views

Inflation and Interest rates in US. Is it in between a rock and a hard place?

There is no secret that our government(both republican and democrat) will need more money than they collect from taxes to pay their bills. The public debt is getting close to 30 TRILLION and the ...
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0answers
12 views

Marginal utility and convex utility function

If we have a convex utility function, like the quadratic one, does the law of diminishing amrgnial utility still apply or do we have that the partial derivative of utility with respect to, say ...
-1
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1answer
23 views

Negative Interest Rates and Pension Funds

How do negative interest rates impact the future prospect and business model of (defined benefit) pension funds? What could be winning investment strategies for pension funds in a negative interest ...
1
vote
1answer
33 views

How can difference equations with an infinite summation be represented in matrix form?

I have derived the microeconomic foundations of a dsge model and I've obtained the IS and NKPC. I would like to represent them in matrix form to study the system. However the problem is that both ...
0
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0answers
13 views

Finding wage of two complementary labor sources [closed]

Domestic and immigrant labor is complementary in this problem (r= -1). There are 4 immigrants and 12 domestic workers. Find the equilibrium wages for both. Production function F(LI , LD) = 120(LI+LD)^(...
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0answers
11 views

Effects of a decrease of the policy rate on net exports

We've recently worked in class with the IS-LM-UIP model (where UIP stands for the uncovered interest rate parity). The central bank chooses the policy rate. Hence, the LM curve is horizontal. The IS ...
1
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1answer
37 views

Monte carlo simulation for macroeconomist

I would like to know if it is useful to learn Monte Carlo simulations if I want to focus on macroeconometrics ? Or even is it useful outside of academics ?
0
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1answer
38 views

Is it easier to borrow money during a recession or high inflation period?

During a recession the FED applies expansionary monetary policies while during high inflation periods it contracts the money supply which respectively lowers and raises interests rates. Given that ...
0
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1answer
23 views

LM-Curve formula question

An LM Curve can be described as following $M^d(Y,i) = M_0 + M_1Y – M_2i$ $M^d = M/P$ M and P are exogen I know that $i$ is interest rate, and Y is GDP. Why is $M_1$ and $M_2$ positive? And what does $...
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0answers
18 views

Dynamic Panel Data estimation…HELP!

Hi everybody and thanks for reading. I'm currently working on university research where my proposal is to find which are the fertility determinants. In the first instance, I made a balanced panel for ...
2
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0answers
10 views

Where in the BOP does the rental of a building appear?

Say a Japanese citizen (living and working in Japan) owns a house in the US and rents it out (to a US resident) for \$10,000 in 2020. (Assume the value of the land is negligible.) Where in the US BOP ...
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0answers
13 views

Why are NNP/GNP loosing there significance?

It is a well known fact that NNP and GNP are loosing their significance with time. I tried to find a solution to this issue and in a book I found the following statement: "NNP and GNP are ...
0
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0answers
15 views

Power System Economics Question

I'm not sure where should I post this under since it's both about Power Systems and Economics but I want to understand the economics aspect of it. This is the answer: This is my attempt, tabulated: ...
1
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0answers
20 views

Does GMM have any assumptions that you can't test empirically (and must instead argue qualitatively for)?

My understanding is that you can empirically test some of the main assumptions required for using a GMM estimator. Namely, I understand that you can test over-identifying restrictions with Hansen's J ...
0
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1answer
17 views

Derive IS-Curve (Y)

An Economy has a GDP described by the following: $Z=C(Y −T)+G+I(r)$ $C(Y −T)=C_0 +C_1(Y −T)$ $I(r) = I_0 − I_1r$ where Z is planned expenditure, Y is GDP, T is tax, G is public consumption, I is ...
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0answers
9 views

Renter exodus from London, what does this mean for specific companies?

Which companies derive most of their income for rentals in London? There is an exodus of renters from London and record buy to let houses being put up for sale. what does this mean for the London ...
0
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0answers
8 views

How to calculate how much the median income earner has to work to earn the country’s minimum wage?

I want to figure out how much time [hours/week] the 2017 median income earner for several countries had to work to earn the country's 2017 minimum wage. The best data I've found is: Median disposable ...
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1answer
41 views

What is the difference between “borrowing” money and “printing” money?

When a country's government has a budget shortfall, that country has to find some way to pay its contractors/emplooyees. Unlike a normal company, the government can't simply go to the bank and ask to ...
0
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0answers
8 views

How do I convert (this OECD data of) median disposable income to pre-tax income?

I want to convert the "Median disposable income (current prices)" found in the link below to Median pre-tax income (current prices). How do I do so? Are there for example any appropriate ...
1
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0answers
17 views

Does IMF consider the international reputation of a country?

Hi I have three question below which I tried searching on internet and read a lot of literature as well. Besides all the literature sources I need to know some practical knowledge of people out there. ...
1
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1answer
63 views

Why would a digital Yuan (or some other national currency turned into a CBDC) “help fast-track international settlements” in that currency?

I'm trying to understand the basis of this claim As the main mode of transaction in the world's second biggest economy, China's currency should be a natural contender for the spot. However, the U.S. ...
1
vote
1answer
62 views

Offer curves in general equilibrium

I'm having trouble understanding how to find the offer curves in general equilibrium. Is there a general way that we can use to find it? I can understand the Pareto set and contract curve but when it ...
2
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0answers
14 views

An Extension to CES Demand

I am reading a paper with an extended CES final good setting: The representative household consists of a continuum of members, indexed by $k$ $C_{t}=\int C_{k, t} d k$ $C_{k, t}=\left(\int_{j \in \...
1
vote
2answers
41 views

Textbooks claim that the difference between GDP and GNP (or GNI) is about geography vs citizenship--is this correct?

Many textbooks claim that the difference between GDP and GNP is about geography vs citizenship. For example, Colander: GDP is output produced within a country’s borders; GNP is output produced by a ...
1
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0answers
29 views

Why does Dodd-Frank/Basel make large cash piles unattractive?

As several major banks disclosed their financial reports recently, there seems to be much interest in the financial community as to the implications of the large cash piles at US commercial banks. The ...
4
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0answers
21 views

In the BLP paper, why interacting consumer characteristic with product characteristic can generate more desirable substitution pattern

Got a question about the famous BLP paper (http://people.stern.nyu.edu/wgreene/Econometrics/BLP.pdf). When there is no interaction between product characteristic and consumer characteristic, the ...
0
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0answers
7 views

Is it unreasonable for me to be frustrated about an economics RA job process? [migrated]

I recently applied to an economics pre-doctoral RA opportunity at a North American research university. I was asked to do a 7-hour empirical exercise, which I did (took me closer to 10 hours). ...
1
vote
1answer
44 views

Do points inside the PPF curve always mean productive inefficiency?

If a firm produces combinations of goods along the PPF curve, it has achieved its productive efficiency. And when a firm reaches productive efficiency, it means that all factors of production have ...
1
vote
1answer
39 views

Cointegration in stock market between different market places

Hi guys im interested in cointegration in stock market between Brazil, USA, London, China, India, Argentina and Hong Kong. Since I want to compare each country’s index to the BR index, how do i do to ...
2
votes
1answer
27 views

State variable or jump variable

In my OLG model, I have two law of motions for capital and pollution \begin{align*} &K_{t+1} = s_t\\ &P_{t+1} = (1-\delta)P_t+\rho K_t \end{align*} where $K$ is capital, $s$ is the saving from ...
0
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0answers
17 views

2-person zero sum game [closed]

If there is a 2-person zero sum game with mixed strategies, A and B are maximin strategies of Player 1, C is a maximin strategy for Player 2. Strategy D is strongly dominated for player 2, while ...
0
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0answers
12 views

Relationship between HICP and GDP [duplicate]

the title says it all. What is the relation between HICP and GDP. And will there be a high inflation just before recessions? So the upper graph is the percentual change of the BNP from the last year, ...
1
vote
1answer
54 views

Find Pareto optimal allocations and the core for the following economies

Find Pareto optimal allocations and the core for the following economies. There are two consumers and two goods. Utility functions are $u_1(x_1,y_1)= 10x_1-(y_1-2)^2$ and $u_2(x_2,y_2) = 10y_2 − (x_2 −...
-1
votes
0answers
34 views

Relation between GDP and HICP (harmonised Index of Consumer Prices) [closed]

the title says it all. What is the relation between HICP and GDP. And will there be a high inflation just before recessions? So the upper graph is the percentual change of the BNP from the last year, ...
4
votes
1answer
81 views

Payoff from an option contract

In period 1 the consumer of type $\theta$ selects an option contract consisting of an up-front fee, $B>0$, and exercise price, $\bar{R}$. The consumer pays $B$ at the end of the first period. In ...
0
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0answers
17 views

What is “other shareholders funds” on a balance sheet? [closed]

I am trying to understand a balance sheet. Shareholders funds are divided into Capital and Other shareholders funds. However, I don't have a clear idea about what the difference between the two is. ...

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