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43 views

How to find right MRP_L in this economic problem?

Economic problem from my textbook (here is my translation from Russian): There is a firm that is both monopoly and monopsony. It's monopoly on market of its product and it's monopsony on labor market ...
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2answers
139 views

Balance of Trade ( Surplus and Deficit)

I'm new to economics. I want to ask that what remedies that the government can actually employ to address the deficit/surplus in the fish trade balances over time? My attempt, Trade deficit (i) The ...
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49 views

What caused the increased market trading since late 2016?

I was looking at the market (DOW) performance today and noticed an oddity: Beginning late in 2016 trading activity roughly tripled. The change was sudden and remarkably consistent. What would cause ...
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55 views

Why are some natural monopolies protected by the law from competition?

It just doesn't make sense. Any try to challenge a natural monopoly is fruitless (at the best) or an economic suicide (at the worst). Why would you forbid companies from doing such stupid move? It's ...
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173 views

Consolidated budget constraint

This is an excerpt from a data source that I am using. According to the authors it has been created from accounting identities such that it matches theoretical variables used in macroeconomics. For ...
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2answers
171 views

Balanced budget and change in taxes

Consider a simple Keynesian economy in which the government expenditure (G) exactly equals its total tax revenue: G = tY where t is the tax rate and Y is the national income. Suppose that the ...
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68 views

Good book/article that goes into depth about transversality conditions?

I know how to derive the transversality condition in simple models like the Ramsey model. However, I am looking to develop a deeper understanding of transversality conditions in more complex models. ...
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1answer
140 views

Why can we see the Current account as variation in NIIP?

Let's designate the Net International Investment Position(NIIP:it's the net international wealth of a country), as $B_t$. Why can we see the current account at time t, as $CA_t=B_{t+1}-B_t$ , when we ...
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31 views

How does the bank of Canada define “output”

Im trying to replicate the forecasts of this VECM model presented by the bank of canada in The M1 Vector-Error-Correction Model: Some Extensions and Applications Context (from page 24 in the pdf). ...
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22 views

What would be the possible effect on a country's economy if private banks are declared as non-profit?

Suppose, there are 100 banks in a country. 50 of them are government owned. What would be the possible effect on a country's economy if private banks are declared as non-profit? I.e. they can not ...
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26 views

When is the pegged price equal to the market price

Suppose the government pegs an exhaustible resource, at a price $P^*$. I found out that the shadow price (initial price of the resource if government didn't peg) would be $$Q_t = ( \sigma i S_t )^\...
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38 views

What was the impact of the Great Recession on the economics curriculum

O. Blanchard claims that the discipline needs at least 5 types of models. Did the Great Recession have an impact on the economics curriculum? What are the discipline areas that were affected/'reformed'...
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412 views

Euler equation - Intuition behind setting $\beta(1+r)=1$ if the economy is closed

The Euler equation is: $$u(C_{t})=\beta(1+r)U(C_{t+1})$$ In my lecture notes, I noted that my prof. said something like: Since our economy is closed, we are going to assume that $\beta(1+r)=1$ ...
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40 views

Inflation-adjusted units of account

In Chile, most of prices are measured in the local currency, the peso (currency code CLP). However, there are two other units of account. These are the UF and the UTM. These keep track of the real ...
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38 views

Which way is the pendulum swinging with regards to “Access to Capital”

The premise is said best by the economist George Magnus in 2015: "Advances in technological productivity gains are benefiting a limited number of people. The principal rewards of modern technology ...
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74 views

Chicago Fed National Activity Index: underlying data download

Is there quick way to download the 85 time series (already transformed, i.e., seasonally adjusted and stationarized, if necessary) that are used to construct the Chicago Fed National Activity Index (...
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2answers
507 views

Price optimization with demand forecast

I have one year sales data of a retail company and lets say I am forecasting the next month sales for the product. I have got the sales using time series in R. Now I want to forecast the price as well....
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89 views

Do changes in the interest rates affect the supply of currency?

I understand how changes in interest rates affect the demand for currency (i.e. foreign exchange), but was wondering whether there is also an effect on its supply. I am hypothesising the following: ...
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27 views

Corporate use of offshore cash

Recently Microsoft floated a \$17 billion bond to finance the purchase of LinkedIn (remind me to delete my account). Some might wonder why a company with nearly \$100 billion in cash would need to ...
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43 views

Is it true that the eight richest men have more wealth than the bottom 50% of world population?

This statistic from Oxfam, an anti-poverty consortium, has been reported in prominent media outlets (example). Other articles dispute this statistic as misleading due to flimsy assumptions about debt (...
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25 views

Vector Autoregression - Resource request

I am looking for resources that give a self-contained introduction to vector autoregression. To be a bit more specific, I am interested in VAR models and their application to isolating and ...
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0answers
49 views

Does only enough money exist to pay the principal on all debts, and none for the interest or for anything else?

This is reported to be the testimony of Marriner Eccles, Governor of the Federal Reserve Board, before the House Committee on Banking and Currency, on September 30, 1941. Does this mean that only ...
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1answer
285 views

Log linearization of the technology dynamic

I am still dealing with DSGE models and with log-linearization of characteristic equations of the model. The one that creates me more doubts is the technology shock, that is usually modeled as an AR(1)...
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47 views

Effect of trade on voting

It is a common conception these days that exposure to international trade and its adverse effects is a major factor in the rise of protectionist parties or candidates in the most advanced economies (...
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32 views

Helicopter Money: a tax on banks?

In this text of voxEU, the author are trying to explain why helicopter money will not have it's expected effect. For that conclusion they try to explain the different schemes on how Central Banks pay ...
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116 views

Graphing Volunteer labour Supply

I'm wondering if there is a method by which we can visualize a firms decision to rely on volunteer labour. I have an idea but I'm unsure if it is correct, please tell me if there is an issue with my ...
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16 views

Are there examples of businesses that profit from helping consumers coordinate better?

In economics, its often assumed that individuals are unable to coordinate. Moreover, its often assumed that one of the roles for the government is to help consumers coordinate. However, its also ...
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106 views

Seigniorage, or monetary financing of fiscal policy

In reading a textbook on seigniorage, the authors define seigniorage as $\frac{\Delta H}{P}$, where $\Delta H$ is the change of high-powered money, and $P$ is the price level. In the IS-LM model, and ...
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720 views

Binding and slack constraints in adverse selection problem

When I am dealing with a constrained maximization, once I face constraints with inequality sign, I have to understand which one are binding and which others are slack. If I find that a constraint is ...
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409 views

Capital - augmenting and energy-augmenting technical progress

I've read a number of papers on factor - augmenting technical progress and directed technical change. Authors do not note about the implications of factor - augmentation in sufficient details. Assume ...
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25 views

Multi-way clustering

I want to understand when and why multi-way clustering is necessary. Could anyone give a good example that provides intuition of when and why to use multi-way clustering that also illustrates why ...
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97 views

Interpretation of Incidence Rate Ratio for a Poisson Regression With a Non-Binomial Dependent Variable

Well, the name pretty much says it all. I have searched high and low, but I cannot find a concrete answer to the following question(s): How would one interpret the incidence rate ratio for a poisson ...
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290 views

How does Joseph Stiglitz and Greenwald explain why markets with imperfect information fail to have a pareto efficient equilibrium?

How does Joseph Stiglitz and Greenwald explain why markets with imperfect information fail to have a pareto efficient equilibrium? What premises do they use to come to that conclusion? For example, ...
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83 views

Is utility function used in customer data/profile analysis? What alternatives in practice?

Utility function is great theoretical concept but is it used in customer data analysis or in building customer profile (e.g. from Big data or cash register/checkout data, ecommerce history) or in ...
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494 views

Why does only relative price and not absolute price matter in international trade models?

Suppose I have two teachers: Adam and Bob. Suppose Adam takes 20 hours to lecture and 30 hours to grade, while Bob takes 100 hours to lecture and 60 hours to grade. In absolute terms, Adam is ...
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56 views

Reducing the working hours to 32 hours / week - how much it would affect the prices of commodities?

If the working hours would be reduced from 40 hours / week to 32 hours / week (4 days x 8 hours instead of 5 days x 8 hours), but maintaining the wages at the same levels, then I guess that the price ...
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67 views

Differentiating under integral sign, capital accumulation

I am reading a paper, the author takes the derivative of the following equation with respect to $t$: $$ q(t) = \int_t^\infty e^{-r(s-t)}c(s)e^{-\delta(s-t)}ds $$ $q$ price of capital goods $r$ ...
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16 views

How does the euro swap for Greek debt work?

As I understand it, some portion of the Greek sovereign debt has been converted into "Euro swaps". Can someone explain in simple terms what that means? What debt was given to whom?
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44 views

Bibliography International Macroeconomics/Finance

I'm looking for some bibliography for International Macroeconomics/Finance. Any suggestions? Any help would be appreciated.
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112 views

Second derivative of Capital stock per unit of effective labour

Let $K=$capital, $L=$ labour, $A=$ knowledge or effectiveness of labour. And put $\mathcal{K} = K/AL$ the capital stock per unit of effective labour. If the following is negative $$ \displaystyle \...
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69 views

Regression on default rates and backward extrapolation

Suppose that we have bankruptcy data representative for Small and Medium-sized enterprises in a country. We can therefore calculate default rates. Furthermore suppose that we found that GDP, ...
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52 views

More privileges to the rich and less rights for the poor in the Great Depression?

I would like to know if in the Great Depression (1930s) the government of US and other Western governments increased the taxes for the poor or if they reduced the incomes and the rights of the poor. ...
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68 views

Are things any better in what society considers “third world countries” as they were years ago? If things are better, how did they improve and why?

For years I've seen non-stop commercials of countries in the continent of Africa showing kids who live in sewage huts, parents are dead, war gangs and criminals rule their lives. Like in Captain ...
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35 views

Data source for a corporate bond yield curve?

Yield curves are a valuable tool for economic analysis. It is particularly interesting to analyse the difference between Government Debt yields and Corporate Debt yields (credit spreads). This gives ...
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51 views

How does supply and demand determine price for the following scenario?

Two individuals are stranded on an island. Bob and Jill. By themselves they can produce: Bob: 5 fish & 5 coconuts Jill: 5 fish & 5 coconuts If they specialize and trade, they can produce: ...
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69 views

Government Spending, Econimic Growth Correlation

A major problem when testing hypothesis in economics is the lack of historical data. Is there research into the correlation between long term economic growth and government spending, that is based on ...
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211 views

Finding Pareto efficiency from competitive equilibrium

So to my knowledge, the competitve equilibrium would be Marginal cost= Marginal private benefit. My question is, how would you determine what the pareto efficiency is from the Marginal social benefit ...
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251 views

Advice on upper and lower hemicontinuity?

Consider the correspondence f: $\mathbb{R}$ -> $\mathbb{R}$ defined by: f(a) = {x $\in$ $\mathbb{R}$:x2 + x $\leq$ a2} for all a $\in$ $\mathbb{R}$. Find the points where the correspondence is uhc ...
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30 views

Gross National Income for Personal Income?

is there such a thing as the measure that amounts to roughly the aggregate of personal income for a country (say: all salaries combined) and an aggregate of corporate income. But as separate figures, ...
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22 views

Which countries invest their state pension in their stock market and its effects?

I apologise in advance if this is not the right stack exchange site to ask this question. China has started investing its state pension fund in the stock market on full scale recently. I know Norway ...

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