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17 views

Do any social welfare functionals meet all of Arrow’s conditions, plus absolute-scale full-comparability, but no other informational condition?

I’ve been trying to think of social welfare functionals which meet all of Arrow’s conditions–––unrestricted domain, weak Pareto, independence of irrelevant utilities, and non-dictatorship (see this ...
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20 views

Would households rather live in a world with or without the unemployment insurance?

Would households rather live in a world with or without the unemployment insurance? What is a good example of world in which unemployment insurance is seen as a benefit, and not a hindrance?
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1answer
29 views

Banks and Stock Market in Germany

My question is: ** Why does Germany have such a small stock market, but very large powerful banks? **
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0answers
18 views

Effect of Agricultural products on GDP/capita

What is the best way to regress this effect. I would like to show the effect of the production of different agricultural products (Rice, maize, wheat etc..) have on the gdp of a country (India in this ...
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22 views

Incomplete markets vs complete markets in permanent income model

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} +...
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41 views

How to prove that the walrasian demand function $x(p,w)$ is continuous in $p$ and $w$?

If the utility function $u$ is continuous and satisfies local nonsatiation, and walrasian demand function $x(p, w)$ is a function (i.e. always map to only single values), how to prove that $x(p,w)$ is ...
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9 views

Overlapping Generations Model Pension System Question

Part 1 Pension System OLG Model with pension system: Each individual lives up to two periods. The surviving probability at period 2 is p. At period 1, the young household consumes c1, saves s1, and ...
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12 views

Economic Regulation using Price caps

Based on my understanding both the equations are price caps, for firm A real decrease must be 8% and for B real increase must be 1%. But I don't understand how will I choose between the 2 as an ...
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36 views

Interpretation of coefficients in ECM for consumption

Say that we are regressing consumption $C_t$ on time $Y_t$. Furthermore, suppose that both series are $I(1)$ and are co-integrated. Given this, we set up the error correction model (ECM) as follows: $...
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17 views

Kreps Porteus Certainty Equivalent Intuition

In Epstein-Zin recursive preferences, the Kreps-Porteus certainty equivalent is defined by \begin{equation} \mathcal{R}_t(V_{t+1}) = (\mathbb{E}_t V_{t+1}^{1 - \gamma})^{1 /(1 - \gamma)}. \end{...
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1answer
70 views

Check if a utility function represents a monotone preference

Given a function $u(x_1, x_2) = x_1 +x_2 + \min(2x_1, x_2)$, how do we mathematically prove that it monotonic or not? Is there is a general algebraic technique to show monotonicity of suchlike ...
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14 views

Measuring economic growth in GDP (in USD) vs Real GDP (domestic currency)

I've noticed that a lot of data online seems to measure a non-US country in USD. This seems odd to me, because doesn't that mean that US fiscal/monetary policies, politics, and economics would affect ...
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15 views

Numerical Solution Using Excel about optimal consumption of households

I'm not sure how to solve this problem. I'm given the discount factor, interest rate, probability of high income shock, and various income shock sizes that I need to use to compute optimal consumption....
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2answers
111 views

Algebraic approach towards convexity

I have a function: $ u(x) = x_{1} + x_{2} + \min\{x_{1}, x_{2}\}$. How do we algebraically show if it's convex or not? Also, what would be the general way to show if any given function is convex.
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17 views

What insights can be gleaned from examining inflation spreads?

I was reading through some econ articles and there was much discussion on various measures of inflation. Though I'm not narrowing the scope to this article, I'll include the excerpt here for context: ...
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13 views

Would deflation further stress the Federal Government's Balance Sheet? Would this put in peril Debt payments and Social Security benefits?

I would like to know if deflation would represent a risk to Debt (bond) payments and Social Security benefits. To my understanding, Social Security is only indexed when there is positive inflation. ...
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0answers
20 views

Private Income Sharing

How could one set up a shared income system among a small group - something similar to basic income, only without government involvement and funded by those participating. Perhaps set something up ...
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0answers
27 views

Analyse the influence of interior demand and trade on exports

I would like to have a primer on how the current slowdown of the German economy is affecting its partners, for instance France, Spain and Italy. More specifically, if it goes mainly through Germany's ...
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2answers
73 views

Aggregating individual demand curves

I'm aggregating individual demand curves but the demand curves are inelastic or elastic. Say, 20 people have an elastic demand for a product at price of $2. Another 40 people have an elastic demand ...
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0answers
30 views

income effect and substitution effect

Question:Assume no non-labor income, Alice's labor supply function is $h(w) =\frac{w}{16}$. Her preferences are given by $u(c, l) =\sqrt{c}+3l$. When the wage rate increases, Alice's labor supply ...
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11 views

Comparative cost of public transport

Is there a good database comparing the cost of public transport? I found this one and this one but they cite no sources so have no idea how they were constructed. Also, it is for a given period. ...
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0answers
134 views

Evolutionary stable strategies

I am new to evolutionary game theory so I can't figure out whether I'm looking at things correctly. I have the following payoff matrix: $$ A = \begin{matrix} 3 & 0 \\ 5 & 1 \end{matrix} $$ ...
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1answer
35 views

Running a regression to avoid multicollinearity

I have the following regression (pooled OLS; panel data): Y Treated Shock Shock*Treated {with industry and year fixed effects} Y is a continuous variable, “...
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0answers
8 views

Query regarding derivation of aggregate demand curve

What is the difference between AD curve derive from is-lm model and quantity theory of money.
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0answers
19 views

Regression estimators for an equation with three independent variables

I'm trying to find the estimators for a regression equation with three independent variables: $y_i = \beta_0 + \beta_1 x_{1i} + \beta_2 x_{2i} + \beta_3 x_{3i} + \mu_i$ What is the betas' estimator, ...
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1answer
23 views

Perfectly elastic supply

How would you algebraically write a perfectly elastic supply? Will it be infinite at price = 4? (The choice of the number 4 is completely arbitrary)
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1answer
22 views

Percentage/proportion of published papers with DSGE models

I remember reading a few years back an article that showed an interesting graphic with the percentage/proportion of published papers with DSGE models across time. I've tried searching, but I get so ...
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0answers
24 views

Balanced Growth Path Calculation

Consider an extension of Alesina - Rodrik paper 'Distributive politics and economic growth' (1994). Instead of wealth taxation, impose a labor income taxation with a slight change in the model ...
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0answers
23 views

Did Eisenhower, and his economic team, use a Keynesian economic policy, or a modified form, or not at all?

There is a big debate about this in my graduate political/economic history class. Any input will be appreciated, as well as suggested books or peer-reviewed journal articles. Thank you.
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0answers
24 views

Recommendation on economics books for a statistician

I have mainly an statistics/informatics background and i have basically not knowledge in economics. What some good books to star given my background? Edit: My principal interest is stock market ...
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0answers
32 views

Why is the opportunity cost 0 in this case?

My book says that the opportunity cost of purchase of a specialized equipment that has no alternative use is zero and hence such an expenditure is a sunk cost. However, while calculating the user cost ...
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0answers
20 views

Financial Economics and Corporate Finance

In pg 4 of Principles of Corporate finance (Allen et al, 2017), in the context of explaining financing decisions are less important that investment decisions, there is a line that says: "Financial ...
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0answers
20 views

Okun coefficient interpretation

I'm wondering how to interpret Okun’s coefficient. Say you have $y^c = -1*u^c$. This means that a 1% increase in the cyclical unemployment gap will produce a 1% decrease in the cyclical output gap. ...
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14 views

How do treasury bill auction work?

So i am having a couple of issues understanding the auctions of treasury bills. I know that the treausury accepts the bids offering the highest price. The treausury accepts the competitive bids in ...
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0answers
14 views

Under what conditions should I use a Social Accounting Matrix Model vs. Multimarket Model vs Computable General Equilibrium Models?

What are the differences between the SAM, multimarket and CGE models. When should I use one over the others?
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0answers
11 views

How can I model the impacts of improved agriculture technologies and food aid in a multimarket model?

Given a multimarket model for staple agricultural commodities wheat, rice, maize and sorghum, in a low-income economy, Im trying to figure out how I can use the multimarket framework to look at the ...
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0answers
19 views

Is oil supply really inelastic in the short term

Is oil supply really inelastic in the short run? Though it remains evident that in the short run, the known capacities of oil can't be increased and hence we can assume that there remains a upper cap ...
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0answers
21 views

discount function with logarithm

I have a function f(x) in which there is log function $f(x)=log(1+ax)-bxg(x)$ I need a discount function g(x) with which the function f(x) is concave and the value of x is not too complex. I ...
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0answers
21 views

what is exactly total bid quantity and total ask quantity?

this is the definition formulated by me: Quantity total bid: It’s the sum of currently open (remaining untraded and active) orders on the bid side. Quantity total ask: It’s the sum of currently open ...
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0answers
21 views

Please help to create an interest rate swap

I'm trying to solve Hull's 7.2 problem for swaps. The problem says that: Well, my question is why Company X would need to make a swap contract if it has a good 9.6% interest rate in dollars (and it ...
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0answers
25 views

What impact does deficit spending have on economic inequality?

Taxation schemes can be classified as progressive (the tax rate is higher for higher income brackets), regressive (the tax rate is lower for higher income brackets), or neutral (the tax rate is the ...
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0answers
36 views

Difference between 2 ways of measuring sales against inflation (Compare Variation and Deflate)

Let's say we have these data: $p_{t-1}$, price index at time $t - 1$ = 100 $p_t$, price index at time $t$ = 120 $s_{t-1}$, sales at period $t - 1$ = 110 $s_t$, sales at period $t$ = 154 Then which ...
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0answers
8 views

Effects of Passive/Active market allocations on liquidity and Bid/Ask spread

In The Paradox of Active Management, the author argues that in the event of a shift from Active to Passive management, Bid/Ask spreads and market liquidity will be affected, In our scenario, the ...
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0answers
15 views

CPI Bias with consumers using computers extensively

I was studying Microeconomics from Microeconomics by Pindyck and Rubinfeld where it was written that CPI calculated on Laspeyres index has overstated the cost of living for consumers who use computers ...
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0answers
26 views

Can a progressive policy be solely funded by a regressive or even proportional tax?

Under what criteria a regressive or proportional tax can be used to fully fund a welfare program or policy that it's progressive (i.e., one that benefits lower-income people more) in nature? Are there ...
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0answers
22 views

Forecasting in Real and Nominal Prices

I have a question about how to a create price forecast for a good in nominal and real terms. Using crop prices as an simple example where you believe the price of a crop is related to a stock-to-use ...
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0answers
20 views

Are foreign currency exchange rate transitive?

For a given period, if USD strengthened against EUR by 5%, and EUR strengthened against GBP by 3%, does that imply that USD must have strengthened against GBP by ~8%?
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0answers
12 views

Is there a specific term to define costs “internal” & “external” to an industry?

I'm not referring to the typical definitions of industry (internal) & societal (external) costs but rather the costs that can be reduced by a member within an industry (to be competitive) and the ...
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0answers
21 views

What are the possible consequences of the Thomas Cook collapse regarding the world economy?

As reported by the media, Thomas Cook financially collapsed last week. Since then, hotels in tourist countries like greece or spain also collapsed, leaving several hundred to thousand people ...
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0answers
34 views

Economics of corruption

I am planning to do a paper on economics of corrpution, on the effects of corruption on public goods in developing countries. I wanted to know some authors or papers that I could refer to, since I am ...

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