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2,136 questions with no upvoted or accepted answers
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25 views

Software used for solving demands of different functions

I'm currently doing some research on demand systems and have been experimenting with different underlying utility functions which will generate different systems of demands. However I've been doing ...
2
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0answers
25 views

Why would expanding fiat paper issue lead to decreased exports?

I'm reading "A History of Money and Banking in the United States" by Murray Rothbard, and I'm having trouble understanding this one piece of history. Basically, the Massachusetts government issues ...
2
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0answers
28 views

First order condition of the sequence problem

Consider the standard permanent income model: $$\max_{\{c_t\}_{t=0}^\infty, \{b_{t+1}\}_{t=0}^\infty} \mathbb{E}_0 \left\{ \sum_{t=0}^\infty \beta^t u(c_t)\right\}$$ s.t. $$c_t + b_t = R^{-1} b_{t+1} +...
2
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0answers
43 views

What's the advantage of DSGE relative to BVARs?

DSGE models and BVARs are commonly used in academia and policy circles. They generate different performances (e.g., in forecasting) and perhaps serve different purposes. Notwithstanding, they have a ...
2
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1answer
50 views

Signaling in zero-sum games?

The foundation of this question is a bit vague (based on something overheard at a conference) but I'm hoping someone here can provide some clarification. I overheard a conversation between two ...
2
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0answers
50 views

Neoclassical Economic Growth Model Shadow Price for Discrete vs Continuous Time

I recently learned about the neoclassical growth model in both discrete and continuous time. The intuitive meaning of the shadow price for both cases is that it represents the value of one additional ...
2
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0answers
15 views

What is the privilege of a primary dealer?

Primary dealers have a privileged position, so there is value in being registered as a primary dealer. - https://economics.stackexchange.com/a/13450/8387 I was previously under the assumption that ...
2
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0answers
19 views

Is there a widely accepted definition of “asset [price] inflation”?

A bit of googling found some conflicting ones... Capel and Houben (BIS) Asset inflation occurs when the prices of financial assets are rising even though they are already above their intrinsic or ...
2
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2answers
88 views

Calculating the amount paid for a loan in today's dollars

So I was trying to figure out the amount paid for a loan in today's dollars using two different methods but they give me different results. I was hoping that someone could explain which method is ...
2
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0answers
22 views

Going from DRMs to Indirect Mechanisms

I have recently started studying mechanism design (after having taken a basic graduate micro course) through Borgers' 'Introduction to the theory of mechanism design'. I was wondering if people are ...
2
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0answers
43 views

Simulating a simple economy with … price-makers? arriving at competitive equilibrium

I'm new to economics and thinking about graduate study. My background is mathematics. I started reading a book on microeconomics by Mas-Colell, Whinston and Green. My goal is to understand how ...
2
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1answer
42 views

The Household Production Function

I was wondering whether someone can explain the household production function. Specifically, the variant presented in Patanayak et al 2005. The paper uses the HPF to determine household willingness to ...
2
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1answer
34 views

Data analysis with GARCH modeling

I'm currently analyzing the relationship between stock, bonds, and real estate returns in Germany. I've gathered my data and am planning on estimating this equation: $\sigma_t = \beta_0 + \beta_1 R_{...
2
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0answers
40 views

What do game theorists think of behavioural economics?

Though behavioural economics has been popularized over the past decade in both industry and pop culture, it seems that not much has changed with regard to the standard economic definition of ...
2
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0answers
33 views

How far must one reason up the belief hierarchy?

In games of imperfect information, one must reason about the belief on the state of nature, the beliefs of other player's beliefs of their beliefs, and so on. This is referred to as the belief ...
2
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0answers
54 views

Fixes of quadratic utility when probability of decreasing utility is large

In finance and specifically portfolio theory, a popular utility function is quadratic utility $$ u(x)=x-\frac{\lambda}{2}(x-\mu_x)^2 $$ where $x$ is wealth and $\lambda$ is the parameter of risk ...
2
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0answers
24 views

Net saving as a percentage of net income

In "Is Piketty's Second Law of capital fundamental?" by Per Krusell and Anthony A. Smith Jr the authors say, in a footnote: Specifically, from the FRED database, we use series A023RX1A020NBEA on ...
2
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1answer
53 views

What is the graphic intuition behind Marginal rate of subsitution

So I think I understand the math, but I don't understand the intuition on a 3d graph. Why does the ratio of partial derivatives give us a tangent line on a level curve(indifference curve)? My ...
2
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0answers
25 views

What do the excess supply and demand numbers in this chart mean?

From Econ 101, I thought markets are supposed to equilibrate so that there isn't any excess supply or excess demand. But from a WSJ story, we have the chart below. I believe it says, for example, ...
2
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0answers
39 views

How does the Fed choose its asset purchase rate in an ample reserves era?

The St. Louis Fed's article "A New Frontier: Monetary Policy with Ample Reserves" states that the Fed now uses the IOER and ON RRP rates to set the FFR, instead of open market operations, which are no ...
2
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0answers
42 views

If an endogenous explanatory variable is serially correlated does it mean that its lags are also endogenous?

in panel data when examining economic growth determinants lags are often used to account for endogeneity of explanatory variables. However if the explanatory variable is serially correlated, does it ...
2
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0answers
24 views

What is the relationship between economic growth and equality?

Does economic growth create more or less equality?
2
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2answers
76 views

The purpose of advertising for Pepsi

What is the purpose of advertising for companies like Pepsi who advertise the same product and every person in the modern world knows about it? Why waste money?
2
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0answers
30 views

Regression analysis with interaction and decomposed main effect

I'm trying to figure out if I need to include the main effect in a regression analysis with an interaction if I am already including a decomposed version of the main effect. For example, let: ...
2
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0answers
36 views

Estimating CES utility (not production) function parameters

The CES utility function has the form \begin{equation} u(x_1,\dots,x_n)=\left[\sum_{i=1}^n\alpha_ix_i^\rho\right]^{1/\rho}, \end{equation} where $\alpha_i$ is the consumption share parameter and $\...
2
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0answers
14 views

The range of subsidies that underpin China’s economic model

I was watching the news the other day and the reporter said that America was complaining about "the range of subsidies that underpin China’s economic model". What exactly are those subsidies?
2
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0answers
15 views

Was there a time when economists “generally described” the 1920s “as being years of increasing protectionism”?

In Paul Bairoch's Economics & World History - Myths and Paradoxes (1993), the very first myth he tackles is this: the 1920s are generally described as being years of increasing protectionism. ...
2
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0answers
22 views

In Korea, violations of foreign exchange controls were punished with the death penalty?

According to Chang Ha-Joon (2007), in (South) Korea, violation of foreign exchange controls could be punished with the death penalty. Is this true? What was/were the exact law(s)? Did anyone ...
2
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0answers
25 views

I have a dataset. How do I convert this data into Indifference Curves?

This is all hypothetical. I understand indifference curves. However, I don't understand how they are produced. I read this question, and the survey answer made sense to me... Research Design: ...
2
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0answers
26 views

Economics of Education

I would like to ask two questions. What are decent schools to study Economics of Education for a PhD? My second question is if there is anybody who could recommend me a good book or research papers ...
2
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0answers
53 views

Are there any studies, academic papers or articles that defy “common” knowledge", i.e that patents give an incentive for R&D to private business?

In Economic Growth and particularly dynamic optimization. My professor taught us that an intertemporal allocation is a dynamic optimum(Pareto Optimum) only if(necessary condition) at any given ...
2
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0answers
28 views

How to know when survivorship bias is a problem

I have panel data where firms disappear from failure and mergers. Conditional on existing as a stand alone firm, I observe all firms. However, I am differencing two periods (Late - Early), and the ...
2
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0answers
39 views

Steady State in Korinek and Simsek (2014)

I was reading a paper by Korinek and Simsek (published in the AER in 2016). The version I cite is an IMF Working paper from 2014. The authors essentially describe an economy which has two types of ...
2
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0answers
104 views

Derivation of demand function

Hello. I'm graduate student in Japan. This time, what I want to ask is how to solve the profit maximization problem using the image production function and derive the demand function. This ...
2
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0answers
45 views

Effect of Import Tariff on Supply of Currency on Foreign Exchange Market

I'm struggling with this question below for my macroeconomics course. If Argentina were to impose a tariff on its imports, how will the supply of Argentina's currency and its exchange rate be ...
2
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0answers
36 views

Why is there a Lagrangian Multiplier in the Dynamic Programming Problem of the RBC model?

Suppose that the household faces the following problem: $\underset{ c_t , k_{t+1}, n_t } \max \mathbb{E}_0 \sum_{t=0}^{\infty} \beta^t \ln c_t + \ln (1 - n_t)$ subjected to $ k_{t+1} = A_t k_t ^{\...
2
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0answers
64 views

Why was the Bank of England nationalized after World War 2?

After the Second World War the new Labour government nationalised the Bank of England. Did this give the British Government any new capabilities? For example, could the Government print money before ...
2
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0answers
14 views

Are there agreements in place between the EU and the US to facilitate trade in services?

What agreements are in place between the EU and the US to facilitate trade in services?
2
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0answers
9 views

Discrepancy of GDP and International Transaction Releases for Exports

The Bureau of Economic Analysis ("BEA") provides consolidated data from several different government agencies. Currently they provide exports under both a Gross Domestic Product ("GDP") release as ...
2
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0answers
22 views

The maximum sustainable yield model: clarifications

I would like your help to understand the Maximum sustainable yield model. This is what I understood with some questions. We consider a population of individuals who are born, possibly reproduce ...
2
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0answers
14 views

Lifeboat vs bailout

I have encountered the term lifeboat in these two contexts: Floating a “lifeboat”: The Banque de France and the crisis of 1889 The 1974 rescue in the UK's secondary-banking crisis. Is the term ...
2
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0answers
55 views

Relationship between Elasticity of substitution of sectoral outputs and elasticity of substitution of inputs

There are two sectors Y1 and Y2. Composite output is given by CES form - Each sector employs Capital and Labor in combination through Cobb-Douglas Production Technology. The paper mentions that ...
2
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0answers
59 views

Greek mathematics' application in the early economic theories

I am writing about the development of mathematics in the Ancient Greece as an assigment and I have to include its relation with economics. However, I lack of sources for this topic and I only found ...
2
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0answers
21 views

Global stability in a ramsey growth model with multiple equilibria

Let's say that we have a model with multiple equilibria. $c$ refers to consumption and $S$ refers to natural capital stock. The dynamics that describe the economy are as follows: $$\dot{S}\left(t\...
2
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0answers
18 views

Decomposition of stock index movements

I want to decompose stock index movements. I know the estimated 12 months earnings growth rate ($g_1$), estimated long run earnings growth rate ($g_2$) and the index value. I am about to use two-...
2
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0answers
401 views

Finding long run equilibrium price, quantity and number of firms with a linear average cost function

I've been been brushing up on my micoreocnomics lately and I came across a question in Perloff that looked really simple, but for some reason I am struggling to answer: Assume we are in the long run ...
2
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0answers
29 views

Can State Owned Enterprises compete with each other without a private enterprise in a market? Examples

In a domestic market, there exist multiple (around 5) multi-product state-owned enterprises. In a few products, SOEs compete with private enterprises while in the majority of products, the SOEs share ...
2
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0answers
138 views

When is the PPF convex to the origin?

Given a 2X2 model (2 goods, 2 inputs), if the factor intensities (capital/labour ratio) of the two goods along the Pareto set are unequal, then we get a concave PPF. Can we get a convex PPF in some ...
2
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0answers
22 views

Since the financial crisis, what measures have been taken to solve the too-big-to-fail problem?

Ben Bernanke (2010): If the crisis has a single lesson, it is that the too-big-to-fail problem must be solved. So, what measures have been taken to solve the too-big-to-fail problem? To what ...
2
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0answers
15 views

Data source for the relative frequency of different kinds of expiration date by retailers? (use by, sell by, best by)

I'm not sure if this is the correct Stackexchange site for this question, but I am interested in the economic and environmental effects of food waste reduction. A common policy proposal to reduce food ...

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