# Tag Info

7

One interpretation: Think about the equation above in GDP accounting terms. We know that in an economy, Total Savings ($S(t)$) = Total Investment ($I(t)$) (standard GDP accounting exercise). How is this relevant here? The right hand side is the Total savings in the economy: $\underbrace{s}_{\text{savings rate}}\times\underbrace{Y(t)}_{\text{total output}}$....

4

This is done in order to make the solution more general. If you use specific utility function you prove your result only for that specific utility function and not for other ones. You can still derive Euler equation. For example in a simple 2-period consumption model where agents maximize their expected utility $$E[u]=E[\sum_{t=1}^T u(C)_t]$$ where $t=1,2$. ...

4

I will assume that you are talking about the Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), 65-94. as to my best knowledge Solow did not published paper entitled the "Theory of Economic Growth" in 1956 and the first equation you use in your question is from the paper. Moreover, I also think ...

2

Revised: The sale of the old house is not counted toward GDP as GDP is intended to measure the value of currently produced goods and services in the economy. Used goods are not currently produced, and were already counted the year they were newly produced. However, the services provided this year by real estate agents are in the current year, so the market ...

2

This diagram actually communicates simply what economists do when thinking about General Equilibrium Theory. Though The image dosen't embody all details of whats going on the picture is captured. To get feel of whats going on here more technically usually in intermediate macroeconomics II/intermediate microeconomics II courses we work through examples of ...

2

Quarterly GDP seasonally adjusted source: https://aneconomicsense.org/category/econ-data/gdp-productivity/ AnEconomicSense.org by Frank Lysy Monthly unemployment rate seasonally adjusted Source: https://www.researchgate.net/figure/Seasonal-adjustment-of-US-unemployment-using-the-defaults-of-seasonal-The-result-is_fig2_329822239 by Christoph Sax and ...

2

First, important thing to note here is that $K/Y$ is not the capital income to labor income ratio, but ratio of capital to total income (or output which is macro-economically equivalent to income). $K$ is not an income derived from capital it is the stock of capital. Wars destroy the stock of capital so even though returns to capital $r$ indeed increase ...

2

That frequency is very hard to come by for GDP and employment, especially in many countries. The only thing I know that allows that level of measurement is prices: check https://www.pricestats.com/ for daily measures of inflation, purchasing power parity and real exchange rate. It's available for many countries, both in developed and emerging economies.

2

The intuition is simply that there is an excess of savings on the market and consequently the market gives people a signal to save less. You can see the situation visualized below in a tikz picture of IS-LM model I drew shown below. The $y$ axis measures interest rates both real and nominal and $x$ axis output. The IS curve gives all the combinations of ...

2

I do not think this question can be answered. Firstly, the statement “ For example, entrusting asset management companies to take care of NPLs and free up bank resources so they may lend more.” does not follow. There are some administrative advantages to having concentrated borrowers, but this statement does not capture them. We cannot choose the ...

2

Getting the facts straight First before addressing the question, lets get the facts straight as arguing based on incorrect premises is not good and in this case this is also relevant to the answer. In government, the revenue is fixed (most of the time) This is completely incorrect. In fact government revenue varies quite significantly most of the time. ...

1

I find the question as written to be confusing. I am going to respond to some fundamental issues that I see, based on my interpretation of the question. One premise of this question is that revenues = taxes, i.e., the budget is balanced. The probability of this happening in practice is nearly zero, as the amount of income and sales taxes are based on nominal ...

1

Somewhat straying from the historical question, but I think it's important to discuss the premise of the question: So, overall, the government doesn't have any real incentive to operate in a cost-effective manner. I don't think this is a fair characterization of government - this certainly could describe officials in power, but many street-level ...

1

In the classic RBC model you don't need intermediate good producers. They are introduced, for instance, in the New Keynesian model so that firms have some amount of monopoly power and don't always have to price their goods at the marginal cost of production.

1

The shortest possible answer to the question in the title (as stated now): “Yes.” However, based on the comments, there are questions about definitions. I will attempt to answer them. A fixed income instrument is anything that pays the owner cashflows on a fixed legal schedule, and the owner is not obligated to make any payments (other than the initial ...

1

First of all, just because there is an economic cycle in a data that does not imply that data is non-stationary. For example, consider the completely stationary process simulated in R below, which is based on $x_t = \phi x_{t-1} +e_t$ with $\phi=0.9$ which is stationary by construction yet it exhibits something like economic cycle. So the first thing you ...

1

In the profits of the businesses selling fixed assets and raw materials.

1

so in theory reducing the monetary supply and causing deflation. This statement is too simplistic, as it assumes there is a direct link between the money supply and the price level. Whatever relationship exists is far more complex than suggested by quantity of money theories. Considering that every time someone pays back a loan, the asset and liability ...

1

It is true that paying back loans causes contraction of money supply (if not offset by faster creation of new loans). However, it is not correct to say that this generally happen when debt is forgiven and it does not need to lead to deflation. First, debt forgiveness can actually be thought of as a permanent expansion of money supply not contraction. An ...

1

Check this resource https://fred.stlouisfed.org/, I think is one of the best free repository for economic data. It includes gdp growth and unemployment for many different countries (at monthly or quaterly frequency, which I think is the best you can find with this kind of data)

1

Trading Economics https://tradingeconomics.com/ has copious data on various markets for various countries and has tools for downloading datasets in full as well as dashboards for analyzing trends on the site. It seems like it has most everything you would be looking for and is updated quite regularly Hope this helps! Good luck :) EDIT: As a possible ...

1

an economic bubble happens when too much money was chasing after too little goods This is not correct statement. When too much money chases too little goods you get inflation including asset prices inflation but asset prices inflation or inflation in general does not necessarily leads to bubbles. Bubbles are often thought to be behavioral in origin, see for ...

1

There is no necessary relationship. Canada is a major trading partner of the United States, and the Fed can increase its balance sheet without Canada increasing its official reserve holdings. Why should China be different?

Only top voted, non community-wiki answers of a minimum length are eligible