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He was in favor of a central bank for the exact opposite reason it currently exists. Here is a paper. Currently, fractional reserves are the basis of central banking. Smith implied this wouldn't be allowed. Smith begins by discussing the value of bank money versus hard currency: “What is called bank money is always of more value than the same nominal sum of ...


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One of the most important differences between Adam smith and libs is he was all about resource depletion. The idea he was some kind of lib is absurd and totally ahistorical. So make sure you notice that and aren't just holding the book for status signaling. example From Adam Smith and onwards, economists in the classical period of economic theorising ...


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Yes there is. For example: The Wealth of Nations: A Translation into Modern English by Industrial Systems Research However, you should be warned that that a lot of nuance gets lost in these modern translations that's why they are not used for serious scholarship done on Smith's work (I am not sure if you intent to read it for some serious study or just as a ...


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Does Adam Smith ... support a Central Bank/Federal Reserve? Adam Smith was firmly in favor of central banking (although not necessarily in the same way as understood today). In the Wealth of Nations chapter 3 part I Adam Smith writes “In order to remedy the inconvenience to which this disadvantageous exchange must have subjected their merchants, such small ...


2

Economists have come up with a multitude of reasons why marriages form. For a good overview of the literature see the book of Browning, Chiappori & Weiss (2014), Economics of the Family, Cambridge University Press. To name a few. As you mentioned there is the specialisation benefit. If, for example, one of the members is (relatively) better in household ...


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As DoubleBass says basic New-Keysian model with fully flexible prices is RBC model, I'd just add that if you have already the set-up of Calvo and want to convert it to fully flexible prices you need to set the share of firms that cannot change prices to zero (i.e. if $\lambda$ is the share of firms that cannot change their prices in $t$ then set it to zero). ...


0

I am not sure what you mean by proxy for the financial shock of 2008. If you simply want to control for the 2008 recession, or estimate its effect why don't you simply include dummy following the NBER recession indicator. Shocks are part of the error term. If you would run naive OLS model: $$\ln Y_ = \beta_0 + \beta_1 \ln C_t + \beta_2 \ln I_t + \beta_3 \ln ...


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Aside the solutions mentioned in the other answer you can also estimate it in: Julia Matlab Octave (this is just free version of matlab with some small changes)


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EViews can do SVARs with custom restrictions, including some presets. You may check out their online documentation. Btw, this one is the only one to my knowledge that also does long-term restrictions on the residuals. Pretty sure that JMulti can also do the kind of restrictions you are after. You can get it here for free. It's quite old so I am not sure ...


4

According to the paper (equations $(31)$ and $(32)$) we have: $$ \begin{align*} &k^d = \ln(\overline{l} \alpha^{\frac{1}{1-\alpha}})- \frac{1}{1-\alpha}\tilde{R},\\ &k^s = \ln(\bar l(1-\tau)(1-\alpha)\alpha^{\frac{\alpha}{1-\alpha}}) + \ln\left(\frac{\beta}{1 + \beta}\right) - \frac{\alpha}{1- \alpha}\tilde R + \tilde A \end{align*} $$ You made 2 ...


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[Not a full solution] Unlike what the name suggests, log-linearization does not involve taking logs of individual terms in an equation. Otherwise, the equation t wouldn't hold. The general approach is to take logs of both sides as a whole, and then do a Taylor expansion of these two log-functions. However, this doesn't seem to be necessary here. You can just ...


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How you call your shocks should not be based alone on which variable they hit, but also how, exactly, they hit it. What matters here is the structure of the impact matrix, such as in your example 2. I assume it shows the long-run impact (although I cannot be sure). On a higher levels, how to interpret the shocks also depends on the angle of analysis. If it ...


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My short answer is that if shocks are zero over the whole horizon (history, present, and future) then the variables in a VAR will not move at all, just as in a DSGE. You cannot assume a starting point off-equilibrium without implicitly assuming that at least one historical shock was different from zero. If only all future shocks are zero, then the impact of ...


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Inflation is a generalized rise of prices at a determinated market during a specific period of time (usually seasonally adjusted). Inflation is everytime and everywhere a monetary phenomenon (meaning, it's caused by action of central banks). For example, the most argued situation by heterodox economists is an oil crisis driving prices up, which in my opinion ...


2

You don't provide much information. Here is what I see here. The theoretical background for the first case is the AS-AD model. The exact specification seems to be an A-type VAR. A positive aggregate demand shock has a positive effect on both $\Delta y$ ($\Rightarrow a_{11} >0$) and $\pi$ ($\Rightarrow a_{21} >0$). A positive supply shock has a positive ...


1

I think you are bit confused about what inflation even is. On Inflation Ok, so a supply demand imbalance can lead to rising prices, without inflation. This is something I can understand… The above sentence does not show correct understanding of inflation. Inflation by definition is the increase in aggregate price level, and aggregate price level is just ...


3

A rise in prices is inflation. So, to some extent there has been inflation after the pandemic. Some key examples are: Lumber prices have increased as a result of several supply chain disruptions and increased demand, which drives up the price of pallets, and therefore... everything else. Demand is way up for numerous products as customers are attempting to ...


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I think you are misunderstanding the discussion there. There is no ambiguity or disagreement on what steps are taken to calculate GDP or what items are included/excluded etc. National/international agencies have handbooks with set rules, for example, US Bureau of Economic Analysis has its NIPA handbook. So you can always just go there an check the ...


3

Zero shocks do not imply zero variations in a VAR model. In a stationary VAR model, if the shocks starting from a time period $t=\tau$ are all permanently zero, the variables will converge to their unconditional means, but this will not happen immediately. Due to the autoregressive structure, the convergence will be gradual and will never cease to happen, as ...


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Your calculation is correct. There's probably just a mistake in the book and (4) should really be $(1+π)\frac{d Z_t}{d π} = \frac{M_t/P_t}{1+π} - e π$. Since presumably the RHS is then set to zero, this doesn't change the maximizer, so the mistake is innocent.


1

You are not using value added method above since you are just discussing quantities of goods not their value, unless you want to assume wheat is an unit of account. If you want to use wheat as a unit of account output can be higher than just the amount of wheat in the economy, because you are using wheat just as a measuring stick. Let us assume for ...


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I can only offer you an explanation of what is four types of money in the United States context, in which my hope is you can understand what reserves are and how they work in the United States context at least. Not knowing how your friend defines "currency" as opposed to money. All I can offer is that there are four different types of money issued ...


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