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

How to control for population in Difference-in-Difference?

Random example, but let's say I'm examining the effect of a health program on influenza cases in India. They just randomly start the program in 7 of the 29 states. I have data on the number of flu ...
2
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0answers
23 views

Why is underpayment so prevalent? (23% of those who are 25 and are entitled to the UK's National Living Wage are underpaid!)?

Context: https://www.theguardian.com/uk-news/2018/nov/27/one-in-four-uk-workers-covered-national-living-wage-underpaid-low-pay-commission Why is it that employers can seemingly get away without ...
2
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0answers
34 views

Demand equation with demographics

I am trying to reconcile the derivation of a demand equation with what I actually run in an OLS model. After solving $$max_{x_1,x_2}U(x_1,x_2)= \alpha ln(x_1) + \beta ln(x_2)$$ subject to $$p_1x_1+...
2
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0answers
10 views

How is the level of full employment in an economy determined?

Is this a statistical thing or...? It seems very abstract to me, haha!
2
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0answers
15 views

How much precious metals prices come from their use as investement vs practical use

Some precious metal price come almost exclusively from their value as an investement, as gold, while some others like palladium or osmium have important uses in industries. But lately those metals ...
2
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0answers
16 views

Does the WTO have a mechanism to accommodate states transitioning trade regimes?

If the UK were to leave the EU without a Withdrawal Agreement in place it defaults to WTO trading terms. Does the WTO have a mechanism to accommodate such a transition?
2
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0answers
54 views

Difference-in-differences with long time horizon and repeated treatments

I have a high-frequency panel dataset on the order of $i=150$ and $t=5000$. I am interested in studying the causal impact of a treatment with the following characteristics: The same unit can be ...
2
votes
1answer
76 views

Best-responding to a stochastically higher distribution of bids

In Auction Theory, Krishna writes that: a bidder who faces a stochastically higher distribution of bids–in the sense of reverse hazard rate dominance–will bid higher (This follows the proof of ...
2
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1answer
54 views

Multiple Forgone Job Opportunities and Economic Profit

I'm told that forgone job opportunities are implicit costs, to be included in calculating economic profit, but I can't seem to see how I could list and consider many different forgone opportunities. ...
2
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0answers
42 views

Positive effects of a Tunisia-EU free trade agreement?

Tunisia might be signing a free trade agreement with the EU very soon. It's called ALECA or DCFTA. Many activists and labor unions are opposing such an agreement because it would result in losing ...
2
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0answers
70 views

Why do higher real interest rates increase land value?

I'm using this equation to calculate market value of land based on the levied land value tax: y = market land value x = land value tax r = real interest rate a = real time-independent land value i = ...
2
votes
1answer
62 views

The Difference between investment and savings in CA identity

Mathematically speaking the current account is defined as: $$\text{CA}=S-I$$ where $S$ is savings and $I$ is investment. We know for a closed economy $S=I$ so $CA=0$. practically speaking for an ...
2
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0answers
80 views

How is Aggregate Supply(Willing) equal to National Income(Actual)?

Acc. to definition of Aggregate Supply It is the total value of final goods and services that the producers are willing to supply in country . Definition of National Income It is the value of ...
2
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2answers
51 views

Change in money supply

Suppose a bank makes a loan of $1M to someone taking out a mortgage to buy a house by crediting that person's bank account with a deposit equal to the size of the mortgage. Suppose the required ...
2
votes
2answers
77 views

Can Autonomous Consumption be Greater than Income of individual?

Autonomous consumption is done either through past savings or by borrowing money or selling asset to have minimum consumption in order to survive. So can autonomous consumption be greater than our ...
2
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0answers
27 views

Showing that a market model has arbitrage and describing martingales

This is an exercise which I came upon while studying an introduction to financial mathematics. Exercise : Consider the finite sample space $\Omega = \{\omega_1,\omega_2,\omega_3\}$ and let $\...
2
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0answers
93 views

Helping in understaing new Pesaran and Timmermann test (and R code validation)

I am currently working with Pesaran & Timmermann test version from year 2009. Since I could not find any R package that contains function to calculate it (...
2
votes
1answer
120 views

Can $u(x) = \sqrt{x_1 x_2} + \sqrt{x_3 x_4}$ be solved by Kuhn–Tucker conditions?

Consider $\max_{x_1, x_2, x_3, x_4} u(x) = \sqrt{x_1 x_2} + \sqrt{x_3 x_4}$ s.t. $\; p_1x_1 + p_2x_2 + p_3x_3 + p_4x_4 \le w$ I know we can solve the max problem through separately considering ...
2
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0answers
80 views

Convexity of profit function

The profit function is convex in prices. Are there any conditions under which it is linear in prices? (The property as written in most books doesn't mention strict convexity, so it seems to suggest ...
2
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0answers
31 views

Effect of Modified Utility Function on Initial and End Values of Capital, Labor and Production

I am trying to model a transition path of an economy exposed to a permanent shock to government spending on dynare via matlab. We start with these model equations (standard dynare code format). <...
2
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0answers
175 views

How to prove if production set Y satisfies free-disposal and CR of scale, then Y is convex, when there are only 2 commodities

Free-disposal and CR of scale can not imply convex production set. But it is true for single-input and single-output model. Therefore, I am wondering how to prove if production set Y satisfies free-...
2
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0answers
21 views

How did old international loans work?

On June 11, 1782, John Adams secured a much needed loan for the new Republic from Holland. How exactly did this work in the days of strictly paper currency? What did it mean to loan internationally ...
2
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0answers
44 views

How can the number of hairdressers in the UK be up 50% since 2010?

In this recent article, The Economist argues that one of the reasons behind the anaemic recent wage growth in Britain is that the recent job growth has been concentrated in lower-productivity jobs and ...
2
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0answers
335 views

Solow Model - criticism of Harrod model

I have started out reading seminal paper of Solow - Solow Growth model. It starts out with discussing weaknesses in Harrod Domar Model, a simple model of economic growth which featured prior to solow'...
2
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0answers
68 views

Afriat's number

I discovered the Afriat's theorem on the possible rationalization of a given data set of demand observations and would like to ask for your help in understanding how to compute Afriat numbers in ...
2
votes
1answer
118 views

Wages, capital: Substitution and Output Effects

Consider a CES production function $Y=f(K,L)$ with elasticity of factor substitution $\sigma>0$. The substitution effect of higher real wages naturally implies a shift along the isoquant to more $...
2
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0answers
40 views

Mean Field/Differential Game and Measurability

Consider the following scenario. There is a continuum of players in a population, with population measure normalized to $1$. Each player has a type $\theta \in [0,1]$ and we suppose that $\theta$ is ...
2
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0answers
39 views

Any examples of non-parallelism making Diff-in-Diff estimation biased?

The key assumption in a Differences in Differences design is that both the control and the treatment group have parallel tendencies, that is, they'd follow similar paths over time if there was no ...
2
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0answers
19 views

Understanding Boserup's theories on food and overpopulation

From what I understand about Boserup's theories, she claims that when populations grow and near the carrying capacity of whatever habitat they live in, businesses will have incentive to invest in new ...
2
votes
1answer
80 views

Consumer Utility Maximization equivalent of economies of scope

Economies of scope captures the idea of having efficiency in variety. I've come across this idea only in producer theory to capture the idea that companies may benefit from their ability to reduce ...
2
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0answers
28 views

How does the dollar value of all bitcoin compare with the total cost of the electricity required to generate it?

The world's Bitcoin mining in the aggregate uses surprisingly large amounts of electricity. Princeton computer scientist Arvind Narayanan estimates that Bitcoin mining now uses about five gigawatts ...
2
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0answers
22 views

Are there any experiments about financial games with just one player?

I was wondering if there are any experiments of financial games (laboratory games under controlled circumstances like Plott and Sunder's Rational Expectations and the Aggregation of Diverse ...
2
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0answers
39 views

How can protectionist policies keep wages low?

A German economist who also worked at the ECB notes that: Germany’s bilateral trade surplus with the US has barely changed, despite substantial swings in the euro-dollar exchange rate – which was ...
2
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0answers
24 views

Is there an income inequality metric which also considers the total income?

I'm trying to compare some data I have about two companies, and in order to do so I need to compare their income inequality, but also to take in consideration the total income of each. For example if ...
2
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0answers
44 views

Has any research found that automation will decrease inequality?

A paper by IMF researchers (but not an official position of the IMF) has found that automation will lead to higher inequality under all scenarios they considered. Even in the scenario where robots ...
2
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0answers
64 views

Research community around logistics micro-economic topics?

Is there the equivalent of a Rand Journal of Economics for the topic of logistics, focusing on the micro-economics of productivity gains via automation or disruptive technologies. There is the ...
2
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0answers
39 views

Finding savings in an Overlapping Generations model

I have not seen this question asked anywhere, so I'm posing it here in case anybody else (hopefully) can help me get to the answer. In a nutshell, my question is: how do we arrive at the saving ...
2
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0answers
87 views

Marginal propensity to consume and multiplier effect

Recently I had a conversation with a certain person (call her X) about the marginal propensity to consume (and about the multiplier effect). With marginal propensity to consume I mean $c_1$ as a part ...
2
votes
1answer
70 views

How to derive the measurement equation for the state-space representation of a DSGE model?

DSGE models, after log-linearisation, have a state-space representation. In this representation, in most papers, the measurement/observation equation is simply stated. I'm wondering how one deduces ...
2
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0answers
65 views

Simultaneous Equation Models for Estimating Demand for a Good

Suppose in an economy there are $G$ available goods $X_1,...,X_G$. We can formulate a system of $3G+1$ equations as below: $$Q^d_g = A_{g1}+A_{g2}P_g+\mathbf{A}_g\mathbf{Z}^d_g+u_g\quad(g = 1,...,G)\...
2
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0answers
54 views

Roosevelt’s Price Fixing in The Great Depression

Why didn’t Roosevelt’s method of fixing prices on labour and produce help the depression? If everyone was receiving a wage that allowed them to afford produce, wouldn’t that create a new equilibrium ...
2
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0answers
78 views

Comparing relative change for different base value

I need to compare change in employment size for a sample of companies. I could use percentage change, however, the problem with it is that when the base is small, a small absolute change result in a ...
2
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0answers
54 views

Cleaning data for DSGE model estimation: An and Schorfheide (2007)

In Herbst and Schorfheide "Bayesian Estimation of DSGE Models", in the appendix named "Data Sources", they show several formulas relating the empirical data which should be used for the model. Here's ...
2
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0answers
46 views

What are the linearised equations for the flexible economy in Smets and Wouters (2007)?

To solve the Smets and Wouters (2007) model, we need the linearised equation for the economy when wages and prices are flexible (monetary policy rule depends on the potential output). However, in ...
2
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0answers
26 views

How to deal with potential output in the Sims (2002) framework?

In Sims(2002), the author explains how one solves a linear rational expectations model. $$\Gamma_0S_t=\Gamma_1S_{t-1}+C+\Psi z_t + \Pi \mu_t$$ The only thing exogenously defined in the $z_t$ ...
2
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0answers
21 views

Government efforts in tacking the food crisis

I am a student taking H2 economics at the 'A' levels. Recently, in one of our case study questions in one of the tutorials on the price mechanism and its applications, we covered the food crisis. As I ...
2
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0answers
31 views

Dornbush model - relationship between i and S

In the Dornbush model, when we separate short and long run equilibrium. This is what I apparently have understood: SR1: an increase in Money Supply ($M_s$) leads to a fall in domestic interest rates (...
2
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0answers
502 views

Meaning of Transversality Conditions in Ramsey Problem

I'm working on a Ramsey problem for taxation, and am a little confused on the meaning/intuition behind the transversality conditions below: $\lim_{T \to \infty} \lambda_T b_{T+1} = 0$ $\lim_{T \to ...
2
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0answers
59 views

Size and influence of the regulatory/supervisory sector

I am interested in the size of what I call the regulatory/supervisory sector in Western economies. A regulatory/supervisory (R&S) activity involves either: Determining a set of rules economic ...
2
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0answers
50 views

Reference Request: Primer on Relationship Economic Growth and Science / Technology

I'm in the early stages of planning a research agenda in this area, which means studying the current literature with an eye for further research opportunities. The Economics of Science and ...

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