New answers tagged

0 votes
Accepted

Is a balanced BOP (without taking the official reserves account into consideration, desirable in the real world?

I think you are thinking of the current account? Neither direction of imbalance is generally desirable. A current account deficit means you owe goods and services to other countries, which is bad ...
0 votes
Accepted

Production economy general equilibrium

Only the households. Constructing the maximization problems for equilibrium: Feasibility conditions: The amount of total labor used by industries $x$ and $y$ is not more than the amount of total ...
  • 27.2k
3 votes
Accepted

Question on the conditions for the existence of a Walrasian equilibrium

When confronted with situations like this its always nice to remember the key statement of the Sonnenschein Matel Debreu Theorem which is: Any function $z(p)$ which satisfies homogeneity, continuity ...
  • 7,880
2 votes
Accepted

Find the set of Pareto efficient allocations

We'll consider three cases: For $\alpha \in [\frac{1}{2}, 2]$, there are only two Pareto efficient allocations: $\big\{\big((2,0),(0,2\alpha)\big), \big((0,2\alpha),(2,0)\big) \big\}$ For $\alpha >...
  • 5,452
2 votes
Accepted

A question on the simple Keynesian model

In Keynesian model investment is saving. By definition saving is (assuming no government taxes or spending to simplify math): $$S=Y-C \tag{*}$$ Next GDP in a close economy with no government spending ...
  • 45.1k

Top 50 recent answers are included