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94 views

Linearization of VES production funtions

I know that the linearization of a CES (constant elasticity of substitution) funtion is a bit complicated. There is even an R package dedicated just for that - the econometric estimation and ...
2
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0answers
42 views

Eaton & Kortum - Technology, Geography, and Trade - How theta impacts geographical barrier

The paper says: Smaller $\theta$ implies more heterogeneity, and thus larger comparative advantage, and hence stronger force for trade relative to resistance $d_{ni}$. Would it be correct to ...
2
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0answers
15 views

What drives the Idiosyncratic Volatility puzzle?

I am currently analyzing the IVOL puzzle and I find in a single sort that the higher the IVOL the lower the return. Additionally I do a double sort, first sorting on skew and then on IVOL. I find that ...
2
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0answers
56 views

Static and Dynamic models: Testing the Quantity Theory of Money

The quantity theory of money is stated as a simple equation which states that the general price level of goods and services is directly proportional to the amount of money in circulation. This is ...
2
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0answers
99 views

Kiyotaki-Moore v.s. Bernanke-Gertler-Gilchrist - what's the difference?

What are the key differences between (i) a model which features a "Kiyotaki-Moore collateral constraint"; and (ii) a model which incorporates a "financial accelerator" (a la Bernanke-Gertler-Gilchrist)...
2
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1answer
48 views

Net Neutrality and Recent Telecom Projects

It has come to my attention that the big telecom providers are launching some big infrastructural projects recently (at the time of post, Jan. 2018). I presume by that they mean talking laying cables ...
2
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0answers
210 views

Friedman's version of money multiplier formula

In his Quantity Theory of Money article M. Friedman uses the following formula for the money multiplier: $$ M = H \times \frac{\frac{D}{R}(1 + \frac{D}{C})}{\frac{D}{R}+\frac{D}{C}} $$ where $M = $ ...
2
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0answers
2k views

Has Trickle-Down economics ever worked?

With "trickle-down economics" on the tongue of Americans this year, I wanted to do some research. The prevailing opinion is "trickle-down economics doesn't work." I can find many resources which ...
2
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0answers
386 views

Second order condition for symmetric game

Denote by $i \in \{1, \ldots, n\}$ an economic agent. Let $\mathbf x \in \mathbb R^n$ denote a vector of actions and $x_i \in \mathbf x$ a typical element. Let further $f_i : \mathbb R^n \to \mathbb ...
2
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0answers
19 views

Theoretical - Direct Money Supply model

The following question is based on a hypothetical scenario, in which the goal(s) is/are to identify how system participants may use/abuse the system to their benefit. You are in the fortunate ...
2
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0answers
50 views

Has Germany’s migrant policy improved the economy?

What causal relationship is there, if any, between the country’s 2015-17 migrant policy and its economic growth?
2
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0answers
382 views

Money Neutrality and Real Interest Rate

I learned from the Fischer Effect that Real Interest Rate = Nominal Interest Rate - Inflation Rate . But in today's class the professor told us that due to money neutrality, an increase in money ...
2
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0answers
29 views

Price Synchronization in the Calvo Model

In the paper Gorodnichenko, Sheremirov and Talavera (2014) the authors compute empirically the degree of price synchronization across different goods. In a nutshell their definition of synchronization ...
2
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0answers
257 views

What are some good video lectures on DSGE modeling?

Are there any online resources on Dynamic Stochastic General Equilibrium models supplied with video lectures, which include theory and some practical examples of fitting models as well? I did not find ...
2
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0answers
62 views

Government spending dynamics

I am currently reading Woodford (2010) and I have understood it for the most part. However, as I am new to solving these kind of models I have a question regarding a specific type of monetary policy ...
2
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0answers
138 views

First Welfare theorem proof for local nonsatiation

I know that the First Welfare theorem holds for pure exchange economies for strict monotonicity of preferences, and logically it should also hold for local nonsatiation, but does anyone have a simple ...
2
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0answers
31 views

Volume of trade covered by regional trade agreements

Is anyone aware of statistics about the total volume of trade that happens under regional trade agreements (RTAs)? It's easy to find figures for the number of agreements, but not so easy for their ...
2
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0answers
107 views

Is there an argument from first principles for the form of the no-ponzi condition?

in the ramsey model, we use the no ponzi condition $$\lim_{t\to\infty}e^{-R_t}a_t\geq 0$$ for assets $a_t$ that a household holds at time $t$. I understand intuitively what the reasoning behind ...
2
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0answers
27 views

modelling Inconsistent production functions

last year I asked How do we estimate production functions?. That answer provided was insightful from an econometric perspective and has helped me in applying such an understanding to the workplace. ...
2
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0answers
865 views

How to find the “cost function” given the production function *as well as* the cost per unit produced and the fixed costs?

I'm working on the following homework problem, transcribed verbatim: A firm has a production function defined as $y = 8L^{1/4}K^{3/4}$. The firm faces costs of \$20 wage, \$60 rental rate of ...
2
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0answers
61 views

Why division of labor or specialization boosts productivity

The three reasons given by Adam Smith were: Increased dexterity. Saving of the time which is commonly lost in passing from one species of work to another. The invention of a great number of machines ...
2
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0answers
41 views

Does Fannie Mae get money from the FED

Does Fannie Mae directly or indirectly get money that is printed from the federal reserve to buy mortgages, or have they ever? If so, when has this happened? How much money? What is the process by ...
2
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0answers
25 views

Panel data: When can I used random effects instead of fixed effects? Are control variables necessary?

I have panel data for individuals in an economy that experienced fluctuations in employment levels. I also have some health information for these individuals, BMI, self-rated health etc., My ...
2
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0answers
77 views

How would I assess Pesaran's «Time Series and Panel Data Econometrics»?

Has anyone ever read the book «Time Series and Panel Data Econometrics» by M. Hashem Pesaran? I'm trying to find a hardcopy near me, but I can't find it anywhere, even in libraries near where I live. ...
2
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0answers
42 views

How to pin down the bias and its/their sources in derived technical change indices?

Using the following CES function I backed out factor-augmenting indices $A_1$ and $A_2$ using OECD country level macro data. This process is akin to Solow's (1956) method for deriving technology ...
2
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0answers
85 views

A manifold of agents?

In contract theory and mechanism design, if the agents have one-dimensional characteristics, then they are usually considered as a contiuum on $\mathbb R$; if they have n-dimensional type, then they ...
2
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0answers
46 views

How many of the world's workers are producing luxury vs necessary goods?

Has there been any scholarship done on the proportion of producers producing high-end vs low-end goods? This could also be framed as the proportion of economic activity generated by wealth excess of a ...
2
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0answers
90 views

How does the Fed predict Economic Growth?

Which factors or formulas are used by the Fed to predict Economic Growth?
2
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0answers
320 views

Running Dynare from Matlab

I am new to Dynare++ and I have really quick question I cannot seem to find the answer too. What is the difference between these two commands and why is the output different? ...
2
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0answers
124 views

Money in New Keynesian models

I have been doing some reading on general equilibrium theory and it has made me highly confused regarding the logic behind NK models. If I have understood correctly, NK models are based on Walrasian ...
2
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0answers
166 views

How empirical was Adam Smith's The Wealth of Nations?

How empirical was Adam Smith's The Wealth of Nations? That is, how much empirical research does it contain? Motive: I want to understand whether books that are regarded as "standards" in political ...
2
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0answers
30 views

Microeconomic Modeling of Zero-Rated content

I'm currently writing my Bachelor Thesis which discusses the Question: Does Facebook's free Basics Programm (A website which lets people in poor countries access Internet Services without paying ...
2
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0answers
83 views

Visualising eigenvectors/values

This might seem like an odd question but seeing as I haven't had any formal education in solving ratex models yet, it is something I have been thinking about a lot recently. Consider the following ...
2
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0answers
187 views

Creative destruction and quality-adjusted inflation rate.

I'm reading this article in VoxEU.org, and there's the following paragraph: If the statistical office is correct to assume that the quality-adjusted inflation rate is the same for creatively ...
2
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1answer
80 views

Political theories of inflation

A recent op-ed (paywall) in the Financial Times about inflation stated that (emphasis mine): Across the developed economies, the Phillips curve has gone ignominiously flat. The world's leading ...
2
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0answers
72 views

Forums to discuss and learn hot topics of economics research

Math Overflow is the best forum to learn about pure math researches. Does there exist a similar website or forum for economics researches? The econ stack exchange seems quiet.
2
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0answers
42 views

Using Stata to perform power calculations

I want to use simulation in Stata to help me determine whether or not I will have sufficient statistical power to detect meaningful effects (should they exist) in a given data set using generalized ...
2
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0answers
43 views

Why did the rate of money supply growth increase from 1993-96 in the United States?

Even though the rate of growth in the monetary base decelerated — and the money multiplier decreased for the most part — from 1993-96 in the United States, the growth rate of the M2 money stock still ...
2
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0answers
39 views

Question on a sufficient condition of contractiveness of best reply functions in Vives (1999)

I have trouble in understanding why a sufficient condition that a best reply function is a contraction. The following is a screenshot of Xavier Vives's Oligopoly Pricing: Old Ideas and New Tools from ...
2
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0answers
43 views

Which type of work is actually Software Development?

Inspired by this question on DevOps Stack Exchange, here is a question to economists: For long time being, software engineering and IT operations have been - and I guess they still are - considered ...
2
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0answers
76 views

Simulating the economy - is it an active field of research?

The question revolves around another motivating question: How does economics become more effective at predicting the behavior of the macro economy? For example, how does economics develop methods that ...
2
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0answers
199 views

Bayes Nash Equilibrium in a game with continuous actions

I am attempting to think through a particular type of game with continuous strategies, with Bayes Nash equilibrium as the solution concept. I first describe the game below, followed by questions. ...
2
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0answers
22 views

Oil prices and data frequency

Does higher frequency data have a larger effect on next day crude oil prices than data with lower periodicity? Looking at demand and supply indicators for crude oil, such as opec / non-opec ...
2
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0answers
39 views

How to estimate signifcance of price difference?

I am trying to estimate how significant is a difference between two prices. Preface It seems to not be percentage, as price difference of \$0.10 vs \$0.09 wouldn't make me go for the cheaper shop ...
2
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0answers
40 views

Trade pattern in Krugman 1991

Studying the model of Krugman, 1991: the one in which good varieties are country-specific so that there is trade because in presence of increasing returns, each good is produced in only one country, I ...
2
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0answers
1k views

Breaking down components of GDP per capita

GDP per capita can be broken down into 4 smaller components: Labor productivity, Average hours worked, Employment rate and Participation rate as can be deduced from the following formula: What I'd ...
2
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0answers
84 views

Employment coding in the SIPP

The US Census Bureau's survey of income and program participation (SIPP) has, among others, the following variables: epdtbhn: Paid job during the reference period <...
2
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0answers
27 views

Is there a centralised subscription system for new and forthcoming economic books?

Many publishers (e.g. MIT Press, Oxford University Press, Harvard Press, Norton, et cetera) are constantly releasing new economic books. I could subscribe to email alerts for each of them (for example,...
2
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1answer
280 views

Serial correlation and clustered correlation in FE and FD estimators

I'm running a regression on panel data, one time with Fixed Effects and one time with First Differences. The estimators are really different (the FE estimator is statistically significant and the FD ...
2
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0answers
48 views

Welfare function in General Capital model (Search and Matching)?

i'm working on a model from the Mortensen textbook: "Wage dispersion why are similar workers paid differently?". To be precise, i'm working on the model about general capital. In this case, capital is ...

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