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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 ...
Stan Shunpike's user avatar
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. ...
turdball2365's user avatar
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 ...
TTT's user avatar
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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 ...
Sharingan's user avatar
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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 ...
An old man in the sea.'s user avatar
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, ...
ChinG's user avatar
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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; ...
Bensstats's user avatar
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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 ...
MarkTi's user avatar
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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 ...
John Sturm's user avatar
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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 ...
Giskard's user avatar
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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(\...
Papayapap's user avatar
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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 ...
Giskard's user avatar
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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 ...
Corbin's user avatar
  • 141
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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 ...
High GPA's user avatar
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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-\...
phdstudent's user avatar
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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 ...
Ishan Kashyap Hazarika's user avatar
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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: $\...
High GPA's user avatar
  • 1,906
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 ...
J.D G's user avatar
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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 ...
Nicolas Torres's user avatar
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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 ...
shk910's user avatar
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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 ...
CormJack's user avatar
  • 901
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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 ...
Justin's user avatar
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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 ...
Luis Felipe Gaviria's user avatar
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
John M.'s user avatar
  • 255
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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-...
Michael Gmeiner's user avatar
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 ...
mynameparv's user avatar
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, ...
econ1324's user avatar
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 ...
mayo's user avatar
  • 31
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 + ...
Nicolas Torres's user avatar
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 ...
Athaeneus's user avatar
  • 802
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 ...
Student's user avatar
  • 31
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 ...
Lorenzo Pozzi's user avatar
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 ...
Cola's user avatar
  • 335
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/...
Oliver Queen's user avatar
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 ...
jrudd's user avatar
  • 155
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 ...
user37250's user avatar
  • 331
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 ...
Edward H's user avatar
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 ...
gfaster's user avatar
  • 31
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 ...
vonenzo's user avatar
  • 41
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 ...
user42955's user avatar
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,...
Richard Hardy's user avatar
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 ...
user10478's user avatar
  • 423
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 ...
Lassie Fair's user avatar
  • 1,718
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{...
Grunt's user avatar
  • 31
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 ...
Bob's user avatar
  • 81
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 ...
Athaeneus's user avatar
  • 802
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 ...
Ricardo's user avatar
  • 31
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 ...
Studi's user avatar
  • 385
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 ...
Oliver Queen's user avatar
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 ...
Arne's user avatar
  • 210

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