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### What is it about certain business types that seem to restrict how much large they can grow?

For example, I've never heard of a large lawn-mowing corporation. Phone and computer repairers seem to consist mostly of 1 or two man operations. Wedding planners and photographers seem exclusively to ...
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I am working on a model of optimal payout percentages in the gambling industry. Because the nominal price of a \$1 ticket is always \$1, we use an effective price strategy where Q = \1 in won ... 4answers 7k views ### Why does any treasury / central bank hold gold? I know the US treasury is slowly selling its gold reserves, but what is the actual mission and purpose when it comes to the holdings? What is the reasoning behind the slow rate of liquidation? I have ... 2answers 4k views ### Larry Summers on the causes of secular stagnation In an influential speech on November 8, 2013 at the IMF Annual Research Conference, Larry Summers suggested that slow economic growth in the years following the 2007–2008 financial crisis might be due ... 2answers 5k views ### Where can I find data on income and social mobility over time? How far back is data available? I'm interested in income and social mobility. I understand that Piketty's research deals with the the distribution of income over a long time period. I have also seen some of Chetty and Saez's ... 1answer 337 views ### Barro's (2009) rare disaster model in the AER: How to derive equation (10)? In Barro (2009) Rare disasters, asset prices and welfare costs Barro develops a Lucas tree model with Epstein-Zin preferences. My question concerns the paper's equation (10). In this equation Barro ... 1answer 444 views ### Stochastic growth in continuous time Literature: See Chang (1988) for theoretical part and Achdou et al. (2015) for numerical part respectively. Model Consider the following stochastic optimal growth problem in per capita notation. \... 1answer 1k views ### Solving the Hamilton-Jacobi-Bellman equation; necessary and sufficient for optimality? Consider the following differential equation \begin{align} \dot x(t)=f(x(t),u(t)) \end{align} wherex$is the state and$uthe control variable. The solution is given by \begin{align} x(t)=x_0 + \... 0answers 287 views ### How accurate is duality? In economic theory we know that with the use of some calculus, Hotellings Lemma and Sheppards lemma we can derive a given firms supply function and in term its Profit function. With data of a given ... 7answers 3k views ### Textbook for macroeconomics (advanced undergrad) I find that many contemporary macroeconomics textbooks are too applied, filled with examples, case studies and intuitive illustrations, often at the expense of quantitative rigour and therefore the ... 6answers 4k views ### Why must the rate of GDP growth be positive? There are always expectations that GDP should be growing at a certain rate. This is what I see in the newspapers. I am not an economics major and this is a very basic student question. After adjusting ... 4answers 8k views ### Is complex analysis used in economics? It's frequently useful in physics and engineering applications; are there any applications in theoretical economics? (If not, were there any attempts at incorporating CA that just never caught on?) ... 4answers 746 views ### R in econ departments? According to my personal observation the majority of (prominent) economists prefer use Stata for their statistical analysis and Matlab for other mathematical work. SAS and Excel are also used (... 4answers 6k views ### Does the US stock market tend to rise after natural disasters? It seems counter intuitive that markets would rise after a huge disaster that probably affects multiple industries like oil or produce. For example, can someone explain why the US markets actually ... 5answers 867 views ### What are is the reasoning behind the sharp fall of oil prices starting in mid 2014? Things I have considered: Poor economic conditions around the world could have caused an unpredicted decrease in demand. The resulting surplus has begun driving prices down. This could be ... 4answers 6k views ### Why do lenders dislike early loan repayments? I've frequently seen references in blogs and articles about how banks and other lending agencies like to refer to people who repay loans on an accelerated schedule as "deadbeats", because they get ... 4answers 682 views ### What are the empirical techniques to show causation? A simple linear regression only shows correlation between two variables. To establish causation, two commonly taught methods are IV regression and natural experiments. What are the other methods ... 2answers 2k views ### Why in most macro models technology is labor-augmenting? Take Romer's advanced macro book as reference. In it the Solow model,the Ramsey model and the Diamond OLG all contain the fundamentalA_t$variable representing technological progress. In all these ... 4answers 832 views ### Osborne, Nash equilibria and the correctness of beliefs In Osborne's An Introduction to Game Theory Nash equilibrium is described as follows (p. 21–22): First, each player chooses her action according to the model of rational choice, given her beliefs ... 3answers 863 views ### Consumer optimum in an economy with a continuum of commodities Consider an economy with a continuum of commodities, with one commodity for each point in$[0,1]$. Suppose a consumer wants to maximise $$U = \int_0^1 c_i^\theta\,di\qquad 0<\theta<1$$ subject ... 3answers 20k views ### What is the definition of “First Best”, “Second Best”, etc. in contract theory? What is the definition of "First Best", "Second Best", etc. in contract theory? Especially, what is the difference between "First Best" in contract theory and "ex-post efficient" in mechanism design? 2answers 2k views ### Monopolies are just a mathematical misunderstanding A little head-scratcher (and a good example why we should be careful with notation). Consider a profit maximizing monopoly, that solves over price $$\max \pi = PQ(P) - C(Q(P)) \tag{1}$$ Following ... 2answers 986 views ### How is freelancing viewed under Marxism? How does Marxism view freelance workers? Since a freelancer is the owner of their means of production, are they still viewed as exploited by the bourgeoisie? Could freelancing exist in a Marxist ... 1answer 260 views ### Quality of French wine in the US vs French wine in France I remember reading a study/paper saying that the AVERAGE bottle of french wine drunk in the US is better than the average bottle of french wine drunk in France, due to the fact that nobody bothers to ... 4answers 75k views ### What is the definition of exogenous and endogenous preferences? Wikipedia states: Exogenous Preference -- one that comes from outside the model and is unexplained by the model. Endogenous Preference -- preferences then cannot be taken as given, but are ... 2answers 398 views ### The Case for Basic Income in developed and underdeveloped countries From what I can tell, the idea of the basic income guarantee is very popular in some circles as an excellent alternative to a lot of modern welfare systems. Has anybody developed a theoretic or ... 2answers 186 views ### How could the Euro zone be broken up in an ordered way? Let’s assume that the members of Euro zone all agreed that it would end in 18 months time with each country getting its own currency. What process could be put in place to allow this to happen ... 3answers 293 views ### What have been the main developments in macroeconomics and financial economics since the 2008 financial crisis? In the aftermath of 2008 economists were, fairly or not, blamed for a failure to foresee the coming crisis. Ideas such as "The Great Moderation" and market efficiency were openly ridiculed as ... 2answers 3k views ### What is the definition of a “Stackelberg leader-leader equilibrium”? I have encountered the equilibrium concept of "Stackelberg leader-leader equilibrium" while reading Product Line Rivalry (AER, Brander and Eaton (1984). They say "we define a Stackelberg strategy as ... 2answers 266 views ### Economics of forgetting I'm interested to know economic justifications of forgetting in various fields. On example is Green and Porter(1984). To sustain a Cartel, Cartel members have incentive to forget deviations in a ... 2answers 2k views ### What is the difference between “aggregation” and a “representative agent?” What is the difference between "aggregation" and a "representative agent?" I'm sorry if I'm not entirely clear on this question, but that's why I ask. It seems to me as if a representative agent is ... 3answers 958 views ### Why does China buy so much US treasury debt? What is the reason that China buys so much US debt in form of Treasuries? How does this help the Chinese economy? It seems they are willing to give money to USA so USA economy can function better (... 3answers 140 views ### Economics of Homelessness: Are housing prices to blame? Lots has been written in terms of the social context of homelessness. Often attributing the causes due to mental illness, previous criminal activity and addiction. I've been wondering, how much of a ... 2answers 230 views ### Why use empirical macroeconomic models when they are not policy invariant (Lucas Critique)? With high probability this question is duplicate, and I tried to find one already in the community, but I was unsuccessful. According to the Lucas Critique, in its more general terms, the problem ... 1answer 693 views ### What are estimates of the elasticity of demand for credit with respect to interest rates? When interest rates go up one percent (not one percentage point), what happens to demand for credit? I've only been able to find two papers in this area: Gross and Souleles (2001) study credit cards ... 1answer 578 views ### When does the Divine Equilibrium refinement coincide with that of Perfect Sequential Equilibrium? In signaling games, it seems that the Cho Kreps refinement (intuitive criterion) is the go to refinement for eliminating bad sequential equilibria. Divine equilibrium and perfect sequential ... 6answers 730 views ### Does land value tax create an incentive to merge land ownerships? LVT is "a tax on the unimproved value of land", and "in theory, it does not distort decision making". But if I own land then improvements such as buildings on my neighbour's land can easily increase ... 2answers 794 views ###$1.25 PPP per day poverty threshold - What precisely does it mean?

As Wikipedia states: In 2008, the World Bank came out with a revised figure of $1.25 at 2005 purchasing-power parity (PPP). (Update: In 2015, this was updated to$\$1.90$ at 2015 PPP.) Wikipedia ...
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### Can I refine the set of equilibria in a signaling game to the sender-optimal outcome?

Main question: I've been reading about communication games a lot, and I'm wondering if there are good criteria to select between two separating-ish equilibria. I think of a separating equilibria as ...
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### What metrics would indicate a house bubble rather than genuine market values?

There are concerns that Auckland, New Zealand, is currently experiencing a housing bubble. Auckland is one of the top 10 cities in the world on a housing unaffordability index. The question is - ...
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### References to learn continuous-time dynamic programming

Does anyone know of good references to learn continuous-time dynamic programming? The references don't have to be books. They could be links to online resources as well. Links to clear, concise ...
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### Price discrimination- how much is optimal?

I am of the understanding that as a general rule, price discrimination does not benefit consumers. Yet I can think of a situation where it does. Look at two countries, Australia and India. The price ...
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### Can econometrics test for correlation or causality between prices and corruption?

This week there was news that some prices are rising. I heard that in some countries where corruption is high the prices are also higher. I wonder if there is causaility or just both at same. It would ...
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### Self-selection bias during the course of experiments

Suppose you are running a randomized experiment to assess the effect of $X$, say some training program for unemployed people, on $Y$, say the chance of finding a job in the coming year. Suppose also ...
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### Is scalping tickets harmful?

IMHO, scalping tickets is no different from legitimate arbitrage unless manipulative. Iirc, arbitrage increases surplus and hindering scalping is setting a price ceiling which leads to deadweight ...
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### Influential Theory in the Economics of Poverty

As far as I can tell, research on the economics of poverty is very empirically driven, and this is probably appropriate. What kind of economic theory has been developed though? I'd also be interested ...
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### Visualization tools for game theory: Game trees

There are many ways to draw a sequential game 'by hand'. By drawing the game I mean this: Displaying players' decision points, available actions and payoffs. Is there any way I can do this in R or a ...
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### Solow Model: Steady State v Balanced Growth Path

Okay, so I'm having real problems distinguishing between the Steady State concept and the balanced growth path in this model: $$Y = K^\beta (AL)^{1-\beta}$$ I have been asked to derive the steady ...