Louis. B
  • Member for 6 years, 1 month
  • Last seen more than 1 year ago
4 answers
7 votes
5k views
Why can't a government print money to pay its debt?
8 votes

Your get the basic intuition, but real-life situation is a bit different. First, I didn't really understand what you meant by "try to catch some 'fool'", but what you are calling foreign exchange ...

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1 answers
2 votes
295 views
Constraints on a symmetric pareto allocation under uncertainty
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0 votes

The idea is that since agents are ex-ante identical, they should have the same (ex-ante) expected utility. Ex-ante identical means that even the agent does not know what's his type until resolution ...

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4 answers
5 votes
224 views
Why are stock prices so time sensitive?
3 votes

Prices changing so frequently is simply the result of an adjustment between demand and supply in the market. Demand and supply change all the time, because market venues allow them to change very ...

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3 answers
1 votes
529 views
Why isn't the Fed funds rate greater than interest rate on loans to the pubic
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4 votes

I think you are missing the credit risk attached to any loan. You, as an individual borrower, are far more likely not to reimburse your loan than a bank. Thus the loan is far less risky. Central bank ...

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1 answers
1 votes
98 views
Capital Asset Pricing Modeling for Consumption
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0 votes

I guess the question is : which asset would yield the higher risk premium or expected return? Risk premium depends indeed on the intrinsic characteristics of the asset, and on the pricing kernel, in ...

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1 answers
0 votes
38 views
What happens to the money that the government is in debt from?
4 votes

This does not work like that. If you want to add-up all the debt in the world you will not end-up with 0. Think about a situation in which I owe you \$100, you owe someone else \$100, and this ...

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1 answers
5 votes
349 views
Estimating the second derivative of function from optimizers
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5 votes

The first order condition of the maximization problem is \begin{equation} f'(x)-s=0\iff f'(x)=s \end{equation} We can then replace $x$ by $x(s)$ because this is the optimal value given $s$. Since ...

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2 answers
0 votes
123 views
Having trouble solving system of equations through matrix approach
0 votes

Your system may be rewrite as : \begin{equation} \begin{bmatrix}1&-\frac{1}{3}\\-\frac{1}{8}&1\end{bmatrix}\cdot\begin{bmatrix}s_1\\s_2\end{bmatrix}=\begin{bmatrix}2\\7\end{bmatrix}\end{...

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3 answers
1 votes
3k views
When do trades between two countries not result in gains for either of them?
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1 votes

If I understand well your point, you want to know whether 2 agents (say countries) can make transaction if they don't each gain from that trade. In general, agents optimize some function, called the ...

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2 answers
3 votes
142 views
Fractional reserve banking and bank insolvency
2 votes

Let's assume (as you do if I understand well) that the bank's only liabilities are deposits, so that the bank's equity valuation is simply the value of assets minus deposits. In order to provide loans ...

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1 answers
0 votes
67 views
What is the interpretation of the output matrix of pivoting?
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-2 votes

Pivoting helps solving linear system of equations. Imagine you want to solve for X that satisfies : \begin{equation}A\cdot X = Y\end{equation} where \begin{equation}X = \begin{bmatrix}x_1\\x_2\end{...

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