# Questions tagged [macroeconomics]

Macroeconomics is a branch of economics dealing with the aggregate economy as a whole, rather than individual markets.

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### New Keynesian Phillips Curve: log-linearization

I am facing some problems in log-linearizing the following equation: which is the New Keynesian Phillips Curve (NKPC). The expected result, once log-linearized, is: which is described by equation 46 ...
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### In a deflationary recession, lower demand leads to lower prices. Does this contradict the law of demand?

In Principles of Macroeconomics (a free ebook available on openstax), the chapter on inflation says, regarding deflationary recessions: High levels of unemployment typically accompany recessions, and ...
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### Isn't Germany supposed to have more of a market based financial system? [closed]

I read in the book, Indian financial system by Bharti V Pathak that Demirguc-Kunt and Levine did a research on comparison of fin. system of 150 countries and found a pattern that countries with low ...
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### Difference between retail sales growth and consumption growth

In the comments in this article, professor Michael Pettis states that "By the way please do not assume that retail sales growth rates are a good proxy for consumption growth rates." I ...
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### If a poorer country's currency appreciates equal to the dollar would their minimum wage decrease?

Currently $1 = 31.5 Thai baht, and Thailand has a minimum wage of 336 Thai baht/day (42 baht/hr). If the baht appreciates to the point where it is$1 = 1 baht would that 42 baht/hr minimum wage ...
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### Why does the Silk Belt search for local concessions?

There are several examples of Chinese willingness to take control of harbours in foreign territories, with financial property as well as "landlordship": China gained concessions in the ...
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### Why do firms reduce both price and supply during a recession?

Could anyone explain why firms reduce both price and supply of goods and services during a recession with a practical real life example for better understanding ?
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### Market for loanable funds

Can anyone explain why in some textbooks a government deficit causes a shift to the left of the supply curve (Mankiw) and in others a shift to the right of the demand curve (Krugman). Furthermore,how ...
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### What are some negative/positive aspects from globalization in regard to developed countries?

I have read many articles on how globalization is helping developing countries, as more and more companies from developed countries have been moving their production oversees. However, as hard as I ...
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### Kaldor's Theory of Income Distribution

I am referring to Kaldor/Keynesian theory of income distribution and I am having trouble understanding why the model won't work if marginal propensity to save of workers (S(w)) is more than the ...
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### About the 9 tests on Index number theory to evaluate the efficency of the different types of price indexes

Correct me if I'm wrong, I've seen a section in Wikipedia about Index number theory and I've understand it as "if an index x (Laspeyres, Paasche, etc.) satisfies all of this test, then it's 100% ...
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### King–Plosser–Rebelo Preferences and Additively Separable

The wiki of King–Plosser–Rebelo preferences says that the utility function has the multiplicatively separable form $$u(C, L)=\frac{1}{1-\sigma_{c}} C^{1-\sigma_{c}} v(L)$$ and "in the limit case ...
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### what is 'mid-year estimate' in following chart?

If it is mid-year population then, why it is so less in comparison to 'total population'
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### Model specification of gravity model with Global Value Chains

I am trying to build a gravity model with the Global Value Chains indicator (backward and forward participation) as dependent variables. However, I wonder which are the diagnostic tests I should ...
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### Representative Agent and Maximization

If there's a maximization of utility subject to a budget constraint-would it be always a representative agent model? Can it be heterogenous in some cases?
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### India's exports and the rupee

There are several analyst asserting that a strong rupee would dampen India's exports, for example below article. Given that circa 80% of indian exports are invoiced in USD, why a strong local currency ...
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### What is the implication of perfectly reversible capital?

I am reading the lecture note in labor economics by Acemoglu and Autor. In the chapter of basic search model, they assume capital is perfectly reversible, and argue that "Perfect reversibility ...
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### What does it mean “non-Walrasian” or “quasi-Walrasian”?

In a recent NBER workshop, Robert Hall started a discussion with his first slide summarizing the macro literature. I am not very familiar with either DMP model or New Keynesian model and have no idea ...
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### Multivariate implicit differentiation (Samuelson, 1948)

I am studying "The Simple Mathematics of Income Determination", by Paul Samuelson (from book is called "Macroeconomia (artigos selecionados)", by APEC-CAEN. It is the 1st chapter ...
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### Can anyone explain why the Swiss balance of payments is not balanced (real data)?

While doing a little research I went to the Swiss National Bank's website and downloaded their data on the Swiss balance of payments. The data is here: https://data.snb.ch/en/topics/aube#!/cube/...
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### Economic Surveys for Japan other than the Quarterly Tankan?

I am doing a project that requires economic survey data. I have already finished for Europe (which has the European Commission survey that is released monthly) and for the US (ISM Reports, National ...
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### Does it make sense to talk about Bitcoin 'inflation' when little to no goods and services are listed in Bitcoin currency?

I think of inflation as a generalized increase in the price levels of a basket of goods and services. I should add that my understanding presumes that inflation should be measured in the same currency ...
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### What is meant by the sentence in the context of “Monetary Policy in India”? [closed]

To quote from the book, "Indian Economy by Nitin Singhania," this is what I found out,"It is a macroeconomic policy used by RBI to influence the supply of money." What is meant by ...
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### Why does a higher risk aversion leads to a lower intertemporal elasticity of substitution?

Mathematically, a higher risk aversion leads to a lower intertemporal elasticity of substitution (there is an inverse relationship). But why? If I become more risk-averse, I would like to smooth my ...
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### A differentiation step in a economic growth model

I started studying Olivier Blanchard and Stanley Fischer's Lectures on Macroeconomics, but I couldn't follow the reasoning behind a differentiation step (at least I think it is something involving ...
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### Are these two different cases when it comes to Forex Reserves?

In a forex reserve, what is the difference between "Buying US Dollars to pile up reserves" and "Using FPIs, remittances or exports to build up reserves" ? How differently do they ...
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### Derive the Demographic Structure in the Steady State

I am reading a paper with following description on the demographics in their model: "... each (representative) agent lives for $T$ periods ... We assume that each individual has $e^{f}$ children ...
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### External Commercial Borrowings in Indian Context

I was trying to understand ECB recently and while browsing through the RBI official page I have found that ECBs cannot be used for a) Real estate activities. b) Investment in capital market. c) Equity ...
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Consider the growth model with inelastic labor supply, full depreciation, log utility and CRS technology with the Bellman equation be defined as follows: $$V(k)=\max(log(k^\alpha-k')+\beta V(k'))$$ st ...
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### What are the justification of using 1990 or 2010 as benchmark in studies?

Normally, many international studies and documents using multiple-of-10 years (for example 1990, 2010) as the benchmark year. For example: Dong,2019, p.899 used 1990 as the benchmark to calculate the ...
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### Does savings always equal investment? Are there any cases where savings could be removed from the economic system altogether and break the balance?

Assuming a closed economy, does savings always have to equal investment? If an individual produces a certain amount of a resource and saves it, that becomes part of the savings of the economy. However,...
The equation for the GDP is: $$C+I+G+(X-M)$$ If consumers are buying new cars produced last year...would those still be included in the GDP?