# All Questions

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174 views

### Meaning of innovation in the wealth creation process

Is there a formal definition or measure of wealth that captures the notion that with improving technology "life gets better"? A stupid example of what I mean would be the invention of the iPhone. I ...
57 views

### Confusion regarding debt to GDP ratio

While looking at debt to GDP ratio of various countries, I had difficulty with different figures on different websites. Look at this which shows China's debt to GDP ratio as 43.9%: http://www....
63 views

### Positive interaction term with one negative component?

Say I have an augmented growth regression, where my Y is GDP growth, and my Xs are the classical MRW variables, + international aid + corruption + the interaction term between the two. Basically, I'm ...
700 views

### Taking the derivative of capital per effective unit of labor in the Solow model [closed]

I'm taking an intro macro course, and my calculus is pretty rusty. I'm going through some lectures notes right now where they derive the growth rate of capital in the Solow model like so: I'm ...
242 views

### What does the area defined by two different values for quantity under a supply curve represent?

Assume that a and b (b is greater than a) indicate the quantity of supply on a linearly increasing supply curve. How can be the area formed by those two points under the supply curve interpreted? The ...
26 views

### Question regarding demand schedule and equilibrium consumption [closed]

Please refer to the two images posted at this link: http://imgur.com/a/si3ko Referring to Page 2, I'm not quite sure what the author is trying to say regarding the two bracketed portions. Considering ...
184 views

### Are Terms of Trade reciprocal?

I am trying to learn the meaning of Terms of Trade, but I'm confused. From the wikipedia article, it says that TOT is the ratio of the value of exports over imports, and since for the other country ...
34 views

### Help in interpreting data - Deficit

I was looking at the deficit for different countries http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gov_10q_ggnfa&lang=en How shall they be read? For instance Greece had a -15% in Q4 ...
692 views

### Simple Keynesian model of income determination

When determining equilibrium, we take consumption equal to C= ¢ + c' y where ¢ is the autonomous consumption or minimum consumption that would take place even in absence of income. What could be the ...
41 views

### What happend to the dollar value in the time of the housing crisis

I am wondering what happens to the value of the coin in a country with an housing crisis. Take the USA as an example: They had a housing crisis and I wonder how it effected the value of the dollar and ...
139 views

### Terminal Condition for American Put Option

In a recent book I read the author mentioned the terminal condition: $$\mathop {\lim }\limits_{t \to T} V(S,t) = \max \left\{ {X - S,0} \right\}$$ This is intuitive to understand. Then, the ...
278 views

### Jordi Gali Euler Equation Beta

Derivation euler equation in gali book, I don't understand " β " transformation. Jordi Gali book, page 42 There is no explanation gali book the notes which are prepared by Drago Bergholt (Page 6) ...
68 views

### CDO & CDS on medical patients

As far as my knowledge goes, a "collateralized debt obligation" (CDO) restructures existing bonds into "layers" of debt whereby each layer has similar kinds of bonds with similar kinds of features in ...
54 views

### Maximum level of profit attainable when discount factor is too low

This is a question I encountered during my undergraduate studies in Industrial Economics. So the question goes like this: Consider two identical firms with constant marginal cost $c$ which ...
91 views

### How can trailing and forward P/E ratio of main stock markets show such huge difference

I've recently found this web page, listing the average P/E Ratios of main stock markets: http://www.zutosmoney.com/ Here I reproduce just a small extract: INDEX - Country - Trailing PER - Forward ...
2k views

909 views

### Calculating growth rate of capital when not in steady state

Given a Cobb-Douglas production function, the annual population growth rate, savings rate, alpha, annual depreciation rate, and annual technological progress rate, how would one calculate the growth ...
314 views

### Game theory vs Experimental economics

What are the main differences in the methods of game theory and experimental economics? Which method is better suited to analyze strategic behavior?
72 views

### How to find the discount rate at which two deals are equally attractive? [closed]

Dealer A will sell me a car for \$20,000 with \$2,000 down and the remaining $18,000 paid back over 36 months at a rate of 8% compounded monthly. Dealer B will sell me the same car for \$19,500 with \...
111 views

I know expected inflation plays a key role in both the Phillips curve equation and the Fisher equation, but does it also play a key role in Taylor's Monetary Policy Rule? I'm asking this as I have an ...
3k views

### Formula for Effective Discount Rate of Discount Rate Series

what is the formula to calculate an effective discount rate of Discount Series? For EX, If Price of Product A is \$X and Discount Series is given like 10%,20%,30%,5%,2%. How can we calculate effective ...
72 views

### Taking logarithms of variables [closed]

It is common to taking logs of variables when perform a regression analysis. But the observations will become negative after logs transformation when it is less than 1. Is this the possible concerns? (...
172 views

### Taxes and the economy as a whole

Does reducing taxes generally lead to better economic performance? Does it lead to slowdowns in the economy?
35 views

### Renminbi demand and CNY rates

I read something similar to here, http://www.businessinsider.com/onshore-and-offshore-renminbi-2014-2?IR=T, paragraph 6, that demand for renminbi drives down cny bond market? I can understand how ...
107 views

### Equilibrium in a labour market and price floors

I'm (very) new to economics, taking it as an introductory subject at the moment. I had a quick question regarding labour markets and minimum wages imposed as a form of government intervention. Is it ...
30 views

### Correct way to measure Defence budget of a country like India [closed]

I read that defence budget of the country is 2-3% of GDP, but isnt GDP irrelevant when we are talking about expenditure? Shouldn't it be in a ratio of military import/total import?
20 views

### Is there a good mechanism to incentivize leveraged firms to take less risks?

It seems that there are some circumstances, say when the government foresees a financial crisis, where it would like firms to hedge, take less riesk etc. However, leveraged agents benefit from risk, ...
24 views

### Basel affecting the bank behaviour?

In EU, Banks have changed their behaviour lately, e.g. as acting liquidity providers to certain markets like notes etc. Introduction of Basel III is probably one reason (tighter capital and ...
28 views

### Clarifying foreign direct investment and imports on International Transactions release

I would like to measure US corporations' investments in property, plants, and equipment abroad versus their spending on labor abroad. However, I'm unsure of the categorizations on the International ...
236 views

### Debt-to-GDP or Debt-to-Revenue?

Which is a better measure of the health of an economy between Debt-to-GDP and Debt-to-Revenue? Why?
57 views

### What is the formula for how many more I need to sell in order to justify raising cost?

I need to know the name and formula for this problem. I have widgets which have a certain lube content to them. We currently are selling the widgets for 3.00 each. The lube costs .50 cents for each ...