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1500 questions
13
votes
2 answers
Monopolies are just a mathematical misunderstanding
A little head-scratcher (and a good example why we should be careful with notation).
Consider a profit maximizing monopoly, that solves over price
$$\max \pi = PQ(P) - C(Q(P)) \tag{1}$$
Following the routine steps (see this post)
we arrive at the…
Alecos Papadopoulos
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13
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3 answers
Understanding the construction of stochastic processes
I've seen stochastic processes modeled/constructed in the following way.
Consider the
probability space $(\Omega, \mathcal F, Pr)$ and let $\mathbb S$ be the (measurable)
transformation $\mathbb S: \Omega \rightarrow \Omega$
that we use to…
jmbejara
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13
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2 answers
Where can I find data on income and social mobility over time? How far back is data available?
I'm interested in income and social mobility. I understand that Piketty's research deals with the the distribution of income over a long time period. I have also seen some of Chetty and Saez's research concerning income and social mobility in the…
jmbejara
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13
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7 answers
Textbook for macroeconomics (advanced undergrad)
I find that many contemporary macroeconomics textbooks are too applied, filled with examples, case studies and intuitive illustrations, often at the expense of quantitative rigour and therefore the depth of the understanding they convey.
Is there a…
Constantin
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13
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5 answers
Econometrics: Is elasticity meaningful in my, or any, regression?
A few months ago I interned at this organization; and, as a going away present, I decided to spend my last week, with whatever off time I had, to investigate the factors that affect teacher salaries. One problem that I ran into with teacher salaries…
rosenjcb
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13
votes
4 answers
What is it about certain business types that seem to restrict how much large they can grow?
For example, I've never heard of a large lawn-mowing corporation. Phone and computer repairers seem to consist mostly of 1 or two man operations. Wedding planners and photographers seem exclusively to be home businesses.
Why is it that certain…
Lachy Vass
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13
votes
1 answer
When does the Divine Equilibrium refinement coincide with that of Perfect Sequential Equilibrium?
In signaling games, it seems that the Cho Kreps refinement (intuitive criterion) is the go to refinement for eliminating bad sequential equilibria. Divine equilibrium and perfect sequential equilibrium are also interesting refinements though. It…
Pburg
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13
votes
6 answers
Why must the rate of GDP growth be positive?
There are always expectations that GDP should be growing at a certain rate. This is what I see in the newspapers. I am not an economics major and this is a very basic student question. After adjusting for level of prices, meaning that forget about…
Medan
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13
votes
1 answer
Quality of French wine in the US vs French wine in France
I remember reading a study/paper saying that the AVERAGE bottle of french wine drunk in the US is better than the average bottle of french wine drunk in France, due to the fact that nobody bothers to ship the crappy stuff. Anyone got a link?
Jason Coyne
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13
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2 answers
Solow Model: Steady State v Balanced Growth Path
Okay, so I'm having real problems distinguishing between the Steady State concept and the balanced growth path in this model:
$$ Y = K^\beta (AL)^{1-\beta} $$
I have been asked to derive the steady state values for capital per effective worker:
$$…
James Baker
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12
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5 answers
Why are imports subtracted from GDP?
GDP is a measure of a country's production.
$$GDP = C + I + G + X_n$$
$C$ = Consumer Consumption
$I$ = Gross Investment
$G$ = Government Expenditures
$X_n$ = Exports - Imports
Exports are what we produce and make a profit from by selling to buyers…
user2738698
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12
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0 answers
Queuing Discipline and Lipschitz Continuity
I was reading a paper by Platz and Østerdal (2014) titled "The curse of the first-in-first-out queue discipline". I was wondering about a particular section of it, particularly the part about last-in-first-out mechanisms. $R(t)$ is defined as the…
Kitsune Cavalry
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12
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2 answers
Why use empirical macroeconomic models when they are not policy invariant (Lucas Critique)?
With high probability this question is duplicate, and I tried to find one already in the community, but I was unsuccessful.
According to the Lucas Critique, in its more general terms, the problem with empirical macroeconomic models is that they are…
An old man in the sea.
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12
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4 answers
How does a national budget differ from a household budget?
We are often told by pundits that "Country X cannot spend more than they take in in revenue, because a house that makes A and spends B will always collapse if B>A". Essentially the siren calls of a balanced budget as promulgated by the talking…
Jason Nichols
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12
votes
7 answers
How interest rate affects currency
I am quite new to economics. I was reading about changes in interest rates and its effect on currency value.
The fact is as interest rates increases, the currency value also increases and vice versa. However I want to understand the reason.
At…
Mahesha999
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