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2,399 questions with no upvoted or accepted answers
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1answer
107 views

Anything written on the process behind “multiplicative” production function?

Intuitively, one might make a naive first guess that the production function of the economy, or of a firm, should be a "leontief" production function: "for example, you need both a factory and a ...
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1answer
205 views

Okun's law nominal GDP growth

Does Okun's law also work for nominal (not real) GDP growth?
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1answer
28 views

What is the government's ideal rate of growth for property prices?

If property prices raise too quickly, it can price people out of the market, cause mortgage stress and financial hardship and create a property bubble. If property prices fall too quickly, it can be ...
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1answer
67 views

Doesnt the fact that cash reserves go down in recessions contradict Keynesianism?

It seems cash reserve is procyclical. Also anyone have the financial cash reserve data?
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1answer
79 views

What would be the economic effects of a reduction in the general level of protectionism on the Australian economy?

Protectionism methods including: tariffs, subsidies, quotas, local contents rules and export incentives Would would be the effects of a reduction of these methods, not complete free trade.
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2answers
254 views

EMH: Difference between market price and fundamental value?

I am confused by the relation between stocks market prices and fundamental (or intrinsic) values stated by Efficient Market Hypothesis. How these deviates regarding to efficient market theory or are ...
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1answer
57 views

Strictly increasing function transformation

I have utility function given by: $U(x_1, x_2) = \begin{cases} x_1+x_2 & \text{if $x_1+x_2<6$} \\ 6 & \text{if $6\...
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2answers
96 views

Private Investment Impact on Bond Yields

From Japan to the US to Germany, we are currently seeing longer term bond yields falling at an alarming rate. I tune into a fair bit of economic commentary, and can often come to some sort of ...
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2answers
96 views

How are the price signals of stocks in the stock market centralized?

We can look up the price of a stock, like that of Google, and it gives a particular figure. I would like to know how the price signal is "centralized". What I mean is: if the trades happen between ...
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1answer
46 views

Extension on the suspension of national debt ceiling

So I just want to make sure i got this right, The national debt ceiling was suspended, i.e. the government can now freely spend until Dec.8, which they "say" was for providing $15bn in hurricane ...
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1answer
227 views

How does an elastic Money Demand affects the effectiveness of fiscal policy?

From my notes: 'The elasticity of Money Demand reduces the impact on the interest rate of the increase in government spending...' My question is: if the Money Supply is inelastic, the elasticity of ...
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1answer
42 views

Do the stock performances of various companies have a measurable correlation with exchange rate?

For example if the values of big companies in a country decrease, will the value of that country's currency measurably decrease?
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1answer
10 views

Does it really matter if the real estate prices change for the owners?

Assume the following: You buy 100m^2 somewhere at 150€/m2. Ten years later you want to sell it but the prices dropped and now the price is only 100€/m2. So, you lost 50€/m2. However, you can still buy ...
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1answer
63 views

To what extent can you proxy macroeconomics with broken down cars on highways?

Is there any empirical evidence that the number of broken cars can forecast macroeconomic activity? I won't define "macroeconomy" because I don't know how best define it. Some combination of ...
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0answers
25 views

Regarding imperfect market regulation

Theoretically, if a specific market isn't ~walrassian but is regulated by competition law that assumes that markets under its jurisdiction generally are walrassian... Is the regulation - and thus the ...
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2answers
68 views

How does high U.S. federal debt affect its citizens?

My apologies if this is a silly question. My background isn't in economics, though wish I had some. During the 2008-9 financial crisis, federal debt increased significantly and there was a small talk ...
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1answer
34 views

If Lebanon has a shortage of dollars, are USD donations meaningless?

I was reading about the dollar crisis in Yemen the other day, which mentioned that even people who owned dollars couldn’t withdraw them. If the situation with Lebanon’s currency is similar, what ...
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1answer
34 views

Economy with constant amount of money

A thought experiment: (Based on my understanding of economics) Suppose we are guaranteed that no natural calamity/war/pandemic happens for one year (from year $0$ to year $1$) in the world. Then the ...
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2answers
35 views

Bondholder vs purchaser of bond

Kindly clarify if the term bondholder refers to the bond issuing authority or the person who purchases the bond. Context: if there's inflation in the economy, bondholder will lose and the person who ...
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1answer
25 views

How does the Greenspan/Bernanke Put semantically relate to put options?

If rational investors reckon that "the Fed, under Alan Greenspan, its longtime chairman, would always bail stock investors out of their losing positions", then rational investors would buy ...
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1answer
40 views

Could someone help guide me on finding the players with perfect recall, and those without?

Could someone help guide me on finding the players with perfect recall, and those without? For those players that do not have perfect recall, what do they forget? Step-by-step guidance would be ...
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2answers
38 views

Transparent Fractional-reserve banking as an alternative to the current system

I come from a layman perspective, but I've been trying to understand macroeconomics and finance. Currently I'm struggling with the current topic. Here I'm not worried about the system transition just ...
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1answer
51 views

Shouldn't the total global debt amount to zero and not $253 trillion?

In Jan 2020, the Institute of International Finance (IIF) came out with a report (read summary here) that the total global debt is expected to climb to a new all-time high of more than $257 trillion ...
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1answer
47 views

Finding an instrumental variable for unemployment

I have the following regression model: Marijuana Usei = β0 + β1Unemployedi + β2Personal Incomei + β3Educational Attainmenti+ β4Sexi + β5Agei + β6Racei + εi The model is a probit model I need to ...
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1answer
27 views

How to calculate velocity of money when some people make long-term savings?

Bob gets paid every month and lives paycheck-to-paycheck, so for Bob's money velocity is 12 (assuming that there is nobody else in the economy). Al gets paid every two weeks and lives paycheck-to-...
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1answer
47 views

Minimizing consumption in a single market( Partial Equilibrium)

Let there be a good X where the optimal consumption is 0; i.e the social costs for any unit provided would always be greater than the utility surplus of the market. We know that prohibiting it( ...
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1answer
26 views

Which is more economical with resources, an e-tick or a paper ticket?

I always get an e-ticket on my mobile, to save the environment and so on. But then I thought well, am I really saving trees? I have to give my phone a full charge in order that it doesn't run out ...
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1answer
46 views

Why do some phones depreciate faster than other?

Based on evidence from reselling sites (eBay, Amazon etc.) we can observe a trend that iPhones on average depreciate far less and slower than for example Samsungs (or other phones that lose their ...
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1answer
59 views

Derive the asymptotic distribution

Let $x_1, ..., x_n$ and $y_1, ..., y_n$ be two independent random samples from $X$ and $Y$. We have $µ_X = E (X ) > 0, µ_Y = E (Y ) > 0$ and $σ^2_X = Var (X )$ and $σ^2_Y = Var (Y )$. Derive ...
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1answer
23 views

How to maximize total revenue on constant elasticy curve

So to maximize total revenue, we sell at the price on the demand elasticity curve where elasticity=1 right? Lets say on one curve, the elasticity throughout the curve is equal to 1.5? How much should ...
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2answers
86 views

How to derive the asymptotic variance from the sampling distribution of the OLS estimator?

The asymptotic sampling distribution, after taking plim, of the OLS estimator is given by $\sqrt{N}(\hat{\beta}-\beta) = E[X_iX_i^T]^{-1} \left(1/\sqrt{N} \sum_{I=1}^NX_ie_i \right) $ It must be ...
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1answer
58 views

A preference relation $\succ$ is defined as $(x_1,y_1)\succ (x_2,y_2)$ if $x_1>x_2$ and $y_1> y_2$

Does this satisfy completeness property? I need an intuitive explanation of this preference relation as well. I am confused about the way how this relation is defined. The commodity Y in the first ...
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1answer
46 views

Consumer's side and producer's side

GDP gives the picture from the consumers’ side, while GVA gives the picture from the producers’ side. By definitions of both GDP and GVA "the amount of goods and services PRODUCED in an economy in a ...
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1answer
28 views

The effect of financing of government debt on the yield curve

Is it reasonable to expect that the US govt's financing of the growing budget deficit and US debt by issuing long term treasury bonds will push long term interest rates higher in the future? Shouldn'...
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1answer
17 views

What is recession? Two quarters of -ve GDP or two quarters of slowing GDP?

I'm confused with the definition of recession. Is it two quarters of negative GDP growth , meaning GDP growing at -1% and -2% or GDP slowing to 2% and 1.5%.
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1answer
60 views

US Real GDP Growth Rate

I am interested in finding the quarterly real GDP growth rate of US and have found the following two measures from IMF International Financial Statistics: Which one should I choose (Dark Green or ...
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1answer
141 views

why pound is more overvalued than euro and usd?

Why British pound is more overvalued than euro and usd, even though these currencies(euro and usd dollar) are more traded than British pound?
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1answer
265 views

Why do interest rates move together?

Why do interest rates (mortgage, LIBOR, Treasury yields, etc.) move together? What is the fundamental reason behind that? From my understanding, what drives it is the Federal Funds Rate, which is the ...
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1answer
28 views

Can there exist something that subsidises that is not a subsidy

Is the set of subsidies exactly the same as the set of things that subsidise? Put another way: can there exist something that subsidises that is not a subsidy? Or are there two definitions of a ...
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1answer
41 views

Ceo hobbies and company stock price index in S&P 500

Where can I obtain data on hobbies of CEOs of S&P 500 companies?
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1answer
84 views

Computing the competitive equilibrium given initial allocation

Suppose that there are two agents, 1 and 2, and two goods, honey (h) and lemon (l), and that the agents' preferences over these goods are defined by the following utility functions: $$u^1(x_h^1, x_l^...
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1answer
34 views

Is deprecation included in the value added approach?

I have been asked this question: "Folt Industries in 2017: It sold 1000 in sweaters, it imported 200 in wool from abroad, and purchased 200 in wool from domestic suppliers, it purchased a sewing ...
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1answer
80 views

why doesn't every country scale up the prices to the international level?

I live in an Asian country in which the average monthly salary is maybe 300-400 dollars but things (apart from exported goods like laptops or smartphones) are reasonably cheap compared to their price ...
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2answers
55 views

What's the market equilibrium price for the used good?

On a perfectly competitive market, a buyer wants to buy a used good. He is willing to pay $30$ for a badly used good, and $60$ for a nicely used good. The seller is willing to sell a badly used good ...
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1answer
517 views

Marginal rate of substitution(yx) question

For utility function U= ln(x)+Y How do I determine if MRS(yx) is diminishing or not for this question? I got Mu(x)=1/x and Mu(y)= 1 MRS(yx)=Mu(y)/Mu(x)= 1/1/x = x Does this mean that MRS(yx) is ...
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1answer
686 views

Budget lines and Indifference curves: How do you figure where exactly you should draw the IC tangent to a budget line?

In Consumer Choice, we frequently encounter budget lines and indifference curves. For a given budget line, the optimization point is at the point where the indifference curve is just tangent to the ...
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2answers
43 views

Mixed Strategies — Does this lead to Nash equilibrium?

I have a simple payoff matrix defined here: https://prnt.sc/m6rp5m My question is: If both players play all 4 strategies with 1/4 probability, does that lead to nash equilibrium? I can't quite ...
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1answer
128 views

Would taxing money owned (as a share of purchasing power) be a better form of taxation?

Consider a nation whose money is entirely digital (like Bitcoin), but centralized (unlike Bitcoin). Furthermore, the total money supply is fixed, i.e. money cannot be created nor destroyed. To be ...
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1answer
35 views

Imperfect Price Discrimination profit per group

During imperfect price discrimination is it possible to determine profit per group. For example: Aggregated Cost function: C(Q) = 18*Q + 5; where Q = q1 + q2 Aggregated Demand (AD) for group 1: q1(...
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2answers
194 views

Evolution of GDP to debt ratio

Is it possible for an entity (say a state, e.g. USA) to keep a constant GDP/debt ratio with a monotonically increasing debt. I should probably mention that I am not an economist (physics and c.s ...

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