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9
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2 answers
Ricardo's theory of comparative advantage
The aim of this question is to better explore the mathematical economics model behind Ricardo's theory of comparative advantage and the claims that can be made based on this model. This seems necessary because of this question and some of the…
Giskard
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1 answer
Continuity Axiom in Expected Utility Theory
Take the following definition of continuity.
The preference relation $\succsim$ over the space of lotteries
$\mathcal L$ is continuous if for any $L,L',L''\in\mathcal L$, the
sets $$S_1=\{\alpha\in[0,1]:\alpha L+(1-\alpha)L'\succsim L''\}$$…
Herr K.
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9
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3 answers
Is Marx considered an important classical economist?
In a post on the politics stack exchange, I came across the following description of how Marxism fits into the history of economic thought:
Most professional economists consider Marx' work on economic theory to be a substantial part of economic…
lazarusL
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Which economic research articles or books use anthropological methods?
Most of the social sciences and even disciplines have a stable relationship with economics. And rightly so because our world is so interconnected. But there are certain fields which remained separated from this interdisciplinary connection.
One of…
hedphelym
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9
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Piracy/File sharing - Why aren't songs, movies or ebooks given for free (+ads) like TV?
Question: Why aren't songs, movies or ebooks given for free (+ads) like TV?
i. Sub-question: Every minute, people are pirating, and there is no stopping that. If people see 0.99 for a song on iTunes and 0.00 for a song on a torrent site, I don't…
BCLC
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9
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8 answers
How does the money supply behave when bank loans are repaid?
In a fractional reserve system when banks lend out money, that money is created out of thin air by a accounting journal entry, and the money supply goes up by the amount of the loan & when the loan gets paid off, that money disappears back into thin…
AndyFlip
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Lagrangian: How to understand the No-Ponzi Condition
In http://www.uni-hamburg.de/fachbereiche-einrichtungen/fb03/iwwt/makro/slides2.pdf page 8, lagrangian is written as follow: $$L = E_0 \sum_{t=0}^{\infty}\beta^t\{U(C_t,N_t) + \lambda_t(P_tC_t + Q_tB_t - B_{t-1}-W_tN_t+T_t)+\psi_t(\lim_{T \to…
nba
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Which capital accumulation is right? $K_t = (1-\delta)K_{t-1} +I_t$ or $K_t = (1-\delta)K_{t-1}+I_{t-1}$?
In a lot of models with capital, I find different variants of capital accumulation formula as follows:
$K_t = (1-\delta)K_{t-1} +I_t$ or
$K_t = (1-\delta)K_{t-1}+I_{t-1}$
Which one is more economics-sound formula?
capkital
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eBay economics - total revenue impact from expanding ecosystem by 1 seller
While I think my question is straight forward, I'm guessing the answer to it is anything but. Thanks in advance for any insight you may be able to offer, even if it's just a directional assist. Here's the question.
What is the impact on total…
Jeff
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3 answers
What effect does changing the retirement age have on employment?
I had an interesting casual discussion with a colleague the other day.
A lot of western economies at least, such as New Zealand, have some form of retirement pension. It New Zealand it's called Superannuation. For a single pensioner, the amount…
dwjohnston
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2 answers
Bayesian Nash Equilibrium - Mixed Strategies
What's the correct way to solve BNE in mixed strategies? I've found two conflicting methods used.
Two players. Player 1 knows which game is being played, player 2 knows the game is chosen with probability $\mu$.
$
\begin{array}{c|c|c}
\ & A & B…
Brian
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9
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2 answers
Why is 10% the necessary upper bound for a negative interest rate?
Source: p 710, Economics, 3 Ed, 2014, by N G Mankiw, M P Taylor
... In that same article, Professor Mankiw recounted a
discussion with one of his graduate students at Harvard about a scheme, put forward by the student,
whereby the central bank…
user4020
9
votes
2 answers
What are some different methods for pricing electricity?
I know that in New Zealand, the wholesale price of electricity is set using a spot market, whereby every half hour, each of the electricity producers provide offers for how much electricity they can supply at each price level, and then when the…
dwjohnston
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9
votes
2 answers
How can nominal interest rates be negative?
It used to be (and perhaps still is) standard to teach in economics classes that the nominal interest rate cannot possibly be negative. So why have some nominal interest rates gone negative?
This includes not just interest rates on electronic…
user18
9
votes
1 answer
Matching Theory: Search Time
Consider the standard Diamonds coconut economy. One could imagine that people who search longer, have a different likelihood of matching someone to trade with.
Has there been something done akin this (in any part of matching theory)?
Second Example…
FooBar
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