4
votes
Accepted
Why not just tax monopolies instead of implementing antitrust policy?
One issue of monopolies is that they produce less than the optimal amount, because they artificially restrict supply to keep prices above marginal cost and make more profit.
Taxing them can reduce ...
- 6,108
4
votes
Accepted
Do I have a correct understanding of what a measure is?
The things mentioned in your question are not entirely correct.
First, there are various definitions of measure in science. There are at least 5 important schools of thought on this issue. Following ...
- 53k
3
votes
CRS assumption in solow model
From an economic point of view, the assumption of Constant Returns to Scale can have several reasons, and they are not specific of the Solow model.
I can quote what Solow himself says about Constant ...
- 3,037
3
votes
Solow Model in disrectly and continuously
The discrete time law of motion is given by
$k(t+1) = (1-\delta)k(t) + s f(k(t))$
This can be rewritten as:
$$
(k(t+1)-k(t)) = s f(k(t)) - \delta k(t).
$$
Now, take a Taylor expansion of order 1 of $k(...
- 9,802
2
votes
Accepted
A question about real value of assets of firm when price level decreases
A real asset has some physical characteristics that determine what real output it will produce. E.g.; an orchard produces apples, a construction company creates buildings, etc.
Say my real asset has ...
- 28.4k
2
votes
The Solow growth model
The answer: it is an assumption
Solow-models usually assume that $f$ fulfills the Inada conditions, points 3. and 4. of which state
$$
\begin{equation*}
\lim_{k \to 0} f'(k) = \infty \\
\lim_{k \to \...
- 28.4k
2
votes
The Solow growth model
Because $\delta k$ is linear function, so the slope of the function is always constant, whereas $sf(k)$ is typically nonlinear function exponential function like $f(k)=k^\alpha$ with $0<\alpha<1$...
- 53k
2
votes
Accepted
what to learn to write a comprehensive strong paper?
This depends on exact subfield or even topic you are interested in. For example, there are people who only work on theory, and there you only need strong math background and nothing else. If you work ...
- 53k
1
vote
Economic models that are useful to understand macroeconomics
If you look just for a simple mathematical models you can have a look at Blanchard et al Macroeconomics European Perspective. It covers all the concepts you mention perhaps with exception of ...
- 53k
1
vote
Accepted
Relationship between bonds and interest rates
The yield paid out on Government bonds is determined by a number of factors.
Firstly, at the issuance of the bond in an auction, primary dealers (eg. commercial banks) bid a certain amount of currency ...
- 61
1
vote
Accepted
Where is the central bank in the circular flow of income?
First some of the statements in your question are not correct so let me correct them:
If I understand correctly from the IS-LM model (which I know is very simplified), the central bank "prints&...
- 53k
1
vote
Accepted
$H$ is a constant? Maximizing: $\int _0^Te^{-t}f(x,u)dt$ st $x_t=g(t,x,u)$ and $g$ is independent of $t$
Consider the problem:
$$
\begin{align*}
\max_{u} \int_0^T f(x(t), u(t)) dt& \\
\text{ s.t. } &\dot x = g(x(t), u(t)),\\
&\text{ + boundary conditions}
\end{align*}
$$
Assume that $g(x,u)$ ...
- 9,802
1
vote
Process of Printing Bills
Brief answer: the impetus to print physical money does not come from the FOMC. When the FOMC decides on a policy like QE, which is colloquially referred to as ‘printing money’, this is actually ...
- 1,143
1
vote
Accepted
Is the GDP artificially increased by repeatedly buying and selling the same product?
No.
GDP only records spending on final goods and services. When firms trade things between each other it is not generally included in GDP.
Expenditure on second hand sales between regular people are ...
- 53k
1
vote
CRS assumption in solow model
One way to conceptualize constant returns to scale is by envisioning multiple plants employing the same technology, where it is feasible to initiate as many plants as desired to produce the desired ...
- 7,583
1
vote
Why not just tax monopolies instead of implementing antitrust policy?
Because economic growth depends partly upon innovation. The spender of taxes, that is the government, is viewed as a non-diversified source of innovation if at all innovative. Government funded basic ...
- 920
1
vote
Instead of quantitative easing why wouldn’t Stimulus at Checkout (SAC) work?
The SAC is a direct fiscal stimulus. The Fed is not allowed to do that- fiscal policy is controlled by Congress. The Fed is only allowed to take monetary action, such as lowering rates or buying ...
- 1,143
1
vote
How is the GINI coefficient half the relative mean absolute difference?
The proof provided in my opinion is right, maybe some of the definition is not clear and fully explained. However, the idea of the proof is exactly right.
Let's start defining Lorentz curve from ...
- 11
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