New answers tagged investment
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We find that funds hold stocks that outperform the market by 1.3 percent per year, but their net returns underperform by one percent.
Source.
Seems they don't work very well.
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Does savings always equal investment?
If we are talking about national accounts then yes. Output of closed economy is given by:
$$Y = C+I+G \tag{1} $$
Private saving $S_p$ is by definition is disposable that is not consumed (see further explanation in Blanchard et al. Macroeconomics an European Perspective pp 55) so:
$$S_p= Y- T-C \tag{2}$$
Public saving $...
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$π = φ^{(σ−1)}*\frac{f_E+f_D}{φ^{(σ−1)}*(1+τ^{(1-σ)})}+φ^{(σ−1)}\frac{f_E+f_D}{φ^{(σ−1)}*(1+τ^{(1-σ)})}-f_E-2f_D$
$π = 2\frac{f_E+f_D}{(1+τ^{(1-σ)})}-f_E-2f_D$
$(1+τ^{(1-σ)})π = 2(f_E+f_D)-(1+τ^{(1-σ)})f_E-2(1+τ^{(1-σ)})f_D$
$(1+τ^{(1-σ)})π = 2f_E+2f_D-f_E-τ^{(1-σ)}f_E-2f_D-2τ^{(1-σ)}f_D$
$(1+τ^{(1-σ)})π = f_E-τ^{(1-σ)}f_E-2τ^{(1-σ)}f_D$
$(1+τ^{(1-σ)})π = ...
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