All Questions
3,768
questions with no upvoted or accepted answers
4
votes
1
answer
31
views
Is there a descriptive / axiomatic approach to barriers to entry? If so, who are the most prominent authors?
I have been trying to understand what makes something a barrier to entry in precise terms. I ideally would like some kind of "theory of barriers to entry." Not just examples, which are easy ...
4
votes
1
answer
120
views
Does brain drain really affect a nation's growth trajectory?
Take India as an example. India has been losing most of its bright minds to the west. India also ranks low in development. I would like to get a definitive answer to this cause-effect type question.
...
4
votes
1
answer
159
views
Effects of ACA individual mandate vs AHCA surcharge
The US Congress is currently considering a new healthcare bill, the AHCA, which would replace the existing healthcare bill, the ACA.
One of the major changes is the way each bill encourages people to ...
4
votes
1
answer
177
views
Did a similar property boom take place in another country or throughout history like we have seen in London? If so how did it effect the economy?
The London property market has seen a sharp increase in the average house price. If we go back to the 70's the average UK and average London price were almost the same, however since than the gap has ...
4
votes
1
answer
105
views
If the economy is not always on the Price setting curve, can the Central Bank target unemployment?
In the usual textbook model, in which there's imperfect competition, the economy is always on the Price-Setting(PS) curve, and to have a target unemployment level, above equilibrium unemployment, will ...
4
votes
1
answer
44
views
Easterlin hypothesis
In my understanding, the seminal contribution of Easterlin (1974) showed that within a single cross section, both within and across countries, happiness correlates positively with income. However, ...
4
votes
1
answer
483
views
Papers on Game Theory and the Housing Market
Professor George Fallis in his book "Housing Economics" writes:
(Chapter 4 pg. 78)
The (home)owners will establish a pricing strategy depending on how they believe demanders are behaving; ...
4
votes
3
answers
640
views
Is the labor force participation rate related more to labour supply or to labour demand? Or both?
I have read several Labor Economics books, but I am stuck. Is the labor force participation rate related more to the labour supply or to the labour demand?
If the labor force participation rate ...
3
votes
0
answers
46
views
When is a value function twice differentiable?
Consider the optimization problem
$$
V(\gamma) \ \equiv \ \max_x \ f(x,\gamma) \quad \text{s.t.} \quad g(x,\gamma) \leq 0
$$
Roughly, the Benveniste-Scheinkman theorem implies that if $f$ and $g$ are ...
3
votes
0
answers
41
views
Are higher income people subsidized by the contributions of low income people in pay-as-you-go pension systems
In some countries the main financing of the state pension system is pay-as-you-go. It is my understanding that in these systems the money you pay to the government while you work is not stored in ...
3
votes
0
answers
23
views
Elasticity of job-finding rate
The job-finding rate is
$ f(\theta) = \omega \theta^{1-\eta} $
Then the elasticity wrt to tightness is
$\epsilon= \frac{d f}{d \theta} \frac{\theta}{f} = \frac{d ln(f)}{d ln(\theta)} = \frac{d ln(\...
3
votes
0
answers
64
views
Share of empirical papers
In their answer to the question Why economics does not believe in data/empirical evidence? SE main user/mod/dog emperor 1muflon1 linked this image from Angrist et al (2017):
My question is whether ...
3
votes
0
answers
127
views
What is the most general category-theoretic description of a market?
In the history of economic theories, various formalisms of "a market" or "the marketplace" have been used to explain various facets of economic behavior, starting roughly with Nash ...
3
votes
0
answers
65
views
In Debreu's representation theorem of ordinal utility, is the assumption of "second countability" necessary?
Debreu's representation theorems
Debreu 1959 states that: second countability, continuity, and weak ordering sufficiently implies the existence of real (continuous) utility function. The second and ...
3
votes
0
answers
50
views
How to get a Certain Consumption Equivalent using Epstein-Zin preferences?
In many asset pricing models we use CRRA preferences and Epstein-Zin preferences.
Let's say I have an agent that lives $T$ periods with CRRA preferences:
$$ V_0 = \sum_{t=0}^{T} \beta^t \frac{C_t^{1-\...
3
votes
0
answers
38
views
Experiments on expectations formation
I was reading about the debate between rational expectations and adaptive expectations in some intermediate macro notes. One of the arguments given to discard the adaptive expectations hypothesis drew ...
3
votes
0
answers
101
views
Generalization of Debreu's additive utility function $\sum_nu_n(x_n)$ with infinite number of commodities
I want to generalize: $\sum_nu_n(x_n)$.
Here $x_1,x_2,..,x_n,...$ are commodities. There are infinite number of commodities: $n\in\mathbb N$ or $n\in \mathbb R_+$
The following not a candidate: $\...
3
votes
2
answers
132
views
Why doesn't the government subsidize firms on the condition that they lower prices?
Lets pretend that all production is contingent on fixed cost capital, the good or service made from this capital is sold at a price that means that demand is below what the capital has the capacity to ...
3
votes
0
answers
38
views
Is there a labor vs leisure model with work experience?
I find the labor-leisure model with utility functions interesting, but I find it lacks the factor of work experience, which is very important in the real life labor market.
This is a reason people why ...
3
votes
0
answers
50
views
some derivation in Alvarez and Jermann (2000)
(Alvarez and Jermann (2000)) For each $i \in I$ there is a constant $\xi_i$ such that for all $t, z^t$,
$$|u(c_{i,t}(z^t))| \le \xi_i u'(c_{i,t}(z^t)) c_{i,t}(z^t).$$
$\cdots$. This condition holds if ...
3
votes
0
answers
81
views
Orthogonality of two Subspaces
Note: This is a Linear Algebra Question. I'm posting here because I find this community more helpful than maths stack! And ofc linear algebra is fundamental to econometrics, as well!
Martin Anthony ...
3
votes
0
answers
20
views
Game With Natural Disruptions
Consider a static game with complete information, where each player makes a decision $a_i$ and receives a payoff $\pi_i(a_i,a_{-i})$.
Now suppose there is a natural disaster modeled by a binary random ...
3
votes
0
answers
18
views
Is it possible to run a regression discontinuity design (RDD) with different treatment intensities?
My question arises from an arbitrary assignment rule which gives monetary transfers to cities in Colombia with a population of less than 25,000 inhabitants. However, the transfer varies between cities ...
3
votes
0
answers
109
views
Three types of Neutral technological Change
Can you tell me why the isoquants changes as per pic below in the three cases of neutral technological change: i) Hicks neutral, ii) Solow neutral, iii) Harrod neutral
3
votes
0
answers
39
views
Do t-stats created with robust standard errors follow a t-distribution in finite samples?
I am creating econometrics notes and proved that, with normally distributed errors, homoskedasticity, and no serial correlation, t-stats based on baseline OLS standard errors do in fact follow a t-...
3
votes
0
answers
80
views
Open Economy IS-LM with Perfect Capital Immobility
As a part of self-study for entrance exams I was trying to solve the following problem:
The problem with this question is that I feel like the equation for $TB$ is incorrect, because we are given ...
3
votes
0
answers
33
views
Screening models with multiple goods and interacting costs
I'm looking for a reference in the literature on monopolistic screening/mechanism design, where there are multiple allocative variables and these interact in the agent's utility function.
For example, ...
3
votes
1
answer
86
views
Simulation of a dynamic search and matching model
I want to simulate a search and matching model very close to the canonical model developed by Pissarides. I am interested in representing the trajectory of the unemployment rate when the unemployment ...
3
votes
0
answers
295
views
How to solve the Bertrand model when marginal costs are different and not constant?
Find the equilibrium in the Bertrand model with two firms, with total costs given by:
$TC_1(q_1) = \alpha q_{1}^2$
$TC_2(q_2) = \beta q_{2}^2$
Inverse demand is given by
$P = A - Q$,
where $Q = q_1 + ...
3
votes
0
answers
54
views
Different elasticities of substitution
I have been reading into generalizations of the concept of elasticity of substitution for more goods/inputs and three main possibilities emerged:
Hicksian EOS
Allen-Uzawa EOS
Morishima EOS
HICKS
As ...
3
votes
0
answers
42
views
Dispersion of housing prices in Hsieh And Moretti (2018)
I have been reading 'Housing Constraints and Spatial Misallocation', by Moretti and Hsieh, AEJ Macro 2018, https://www.aeaweb.org/articles?id=10.1257/mac.20170388
In their equation (7), they derive a ...
3
votes
0
answers
15
views
Is there good primer for distributional macroeconomics?
Distributional macroeconomics (for example; works of Ben Moll) seems to be more and more popular these days.
Is there any good primer for student that wants to try to get into this new field? I am ...
3
votes
0
answers
27
views
Should business cycles be included in a growth accounting exercise that is focused on the long run?
I have been tasked with a long-run analysis of the Japanese and Brazilian economies, and as part of this, I have decomposed GDP growth into the contributions from capital, labour and TFP (following ...
3
votes
0
answers
55
views
How to model the payoff (or utility function) of the information provider?
After a thorough look in the literature of information design like Bergemann and Morris and Kamenica and Gentzkow I am still not so sure how the utility gain or payoff of the information provider/...
3
votes
0
answers
121
views
Mathematical Prerequisites for Recursive Macroeconomic Theory (Thomas J Sargent, Lars Ljungqvist)
I'm a math grad who is interested in learning more about economics for fun.
Reading through RMT, I saw some interesting math (in chapter 2) around using "invariant functions" to determine ...
3
votes
0
answers
35
views
Stationarity concerns in typical monetary VAR
In monetary economics, I've seen the following 4-equation VAR with
log industrial production,
log consumer price index,
federal funds rate,
excess bond premium (a la Gilchrist and Zakrajšek)
what ...
3
votes
1
answer
225
views
Was the council bill system used in British India a wealth extraction mechanism?
Jason Hickel says that the council bill system used to pay exporters of Indian goods during the British Raj was a mechanism by which Britain extracted wealth from India without giving India anything ...
3
votes
0
answers
40
views
Does consumer demand in the secondhand market actually affect the firsthand market for high-cost goods
In the 21st Century, there is an increasing consumer awareness of the externalities of manufacturing and along with it a stronger consumer preference to buying used goods rather than new.
My question ...
3
votes
0
answers
84
views
How to prove that these level curves intersect
I have two functions:
$$F(x,y) = U_1'(c_1)(a_1-b_1)+U_2'(c_2) = 0$$
$$G(x,y) = U_1'(c_1)+U_2'(c_2)(a_2-b_2) = 0$$
where $c_i=a_i(x-y)+yb_i, i=1,2.$ the utility functions $U_1,U_2$ are twice ...
3
votes
1
answer
81
views
Explain the definition of a primal shifter versus an input shifter parameters in the standard CES function
I have run into a CES function that seems to be very closer to standard but with a small disaggregation of the share parameter into two parameters (primal share) and (input shift). I am hoping someone ...
3
votes
0
answers
40
views
Covered interest rate parity: the forward contract is not risk free
Covered interest rate parity (CIRP or CIP) can be formulated as:
$$
(1+r_{f,Home})=\frac{S_0}{F_{0\rightarrow 1}} (1+r_{f,Foreign})
$$
where $r_f$ are risk-free rates in the home and foreign countries,...
3
votes
0
answers
90
views
Forward Induction Procedure
Does a mechanical set of rules or algorithm exist for doing forward induction on a game tree, or is it an "every problem is too unique and requires its own reasoning" type of situation? I ...
3
votes
0
answers
71
views
How can there be a "lack" of workers? The Vanishing American Worker
I don't understand the current economic situation. The savings rate is at a long-time low. Something like 30% of Americans failed to pay mortgage or rent in June, inflation is signficantly increasing ...
3
votes
0
answers
58
views
Compensating wage differentials for risk
Question:
The utility from daily income $(x)$ of an individual is given by $$U(x) = 100x - 0.5x^2$$ The only source of income is his earnings. Hence, $x = wl$ where $w = \text{wage}$ and $l = \text{...
3
votes
0
answers
185
views
TFP and the residual with prodest() package in r
I am estimating a firm level production function in R and I am using the prodest() package, which is the equivalent of the prodest package in Stata, written by the ...
3
votes
0
answers
503
views
Utility function distinguishing between complements/substitutes
Distinguish between complements/substitutes in utility function or production function
Hello everyone,
I would like to know if there exists some utility function $U(x)$ for $n$ goods that is able to ...
3
votes
0
answers
48
views
Ramsey Optimal Tax
Suppose there are $n$ goods ($x_i$ with prices $p_i$) to be taxed with a sequence of ad valorem taxes whose rates are given by $t_i$. The total tax revenue is $T = \sum_{i=1}^{n} t_ip_ix_i$. For a ...
3
votes
0
answers
29
views
Does anyone have any references relating to supermarkets pricing goods to keep CPI down?
On BBC Radio 4's Today programme during the Business News on the 31st August 22, I heard an ex-buyer for a major UK supermarket saying that they always kept a list of CPI goods and they made sure that ...
3
votes
0
answers
64
views
Dynamic Information Provision model setup - It generalizes Dirk Bergemann and Stephen Morris
The following model setup is from the paper Dynamic Information Provision: Rewarding the Past and Guiding the Future by Ian Ball. It generalizes both the ideas of strategic information transmission of ...
3
votes
0
answers
54
views
History of Education Economics
I am looking for an historical overview about education economics covering especially the 20th century, e.g. the randomized experiments beginning in the 1960s or the early as well as recent attempts ...