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What are the differences between the older gold standard and the current fiat money standard?

My current limited understanding is that the gold standard was a system in which there was a fixed currency amount per unit of gold. For example, 1 ounce of gold might be 100 USD. Another country like UK might peg their currency to be 1 ounce of…
qwer
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What are some theoretical explanations for deviations from the efficient market hypothesis?

According (the semi-strong form of) the efficient market hypothesis, the price of an asset should reflect all publicly available information about the 'fundamental value' of that asset. The reasoning is that if there is some public information that…
Ubiquitous
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What is the relevance of economic growth?

Economic policies often mention high economic growth as a desirable path. For example, "We started to lay a new foundation for stronger, more durable economic growth." -- President Obama, Speech in 2013 But also "Jeb Bush pledged Monday to give…
FooBar
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Guess and Verify

In dynamic programming, the method of undetermined coefficients is sometimes known as "guess and verify." I've periodically heard there are canonical guesses one might make. In particular, I've seen $V(k) = A + B\ln(k)$ $V(k) =…
Pat W.
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What prevents a bank from simply going into their computer system and adding some zeros to their bank account?

This question has been bothering me for a long time and I’m hoping that someone here can help to answer it. I will use Greece as an example, but my question could really be applied to any country or even a bank: While a government in the Eurozone,…
rohrl77
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Effect of minimum wage on higher levels of pay

Suppose the minimum wage increases to \$$x$. Is there any evidence on the effect (if any) this is likely to have upon the wage profile of workers higher in the hierarchy, who are already paid more than \$$x$? My question is inspired by the following…
Ubiquitous
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How is software treated in Gross Domestic Product calculations?

Is there a concise explanation of how software is treated in GDP calculations? It seems a bit complicated. I can only figure out part of the story: For consumer purchases, I think all software spending shows up as final consumption, whether it's…
Chris
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'No arbitrage' vs 'Efficient market'

I am trying to wrap my head around the 'no arbitrage' (NA) and 'efficient market' (EM) assumptions, in particular their difference. Please correct me if I am wrong, but NA just claims that there is no trading strategy that generates profit but has…
DinoRAWWR
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Calculating nominal GDP

I would like to understand one detail of how nominal GDP of a country in a given year is calculated. It seems to me that the GDP in each country is first calculated in the national currency and then is converted to dollars. Is this correct? If yes,…
aglearner
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Condorcet's paradox: Is the majority rule transitive?

From this wikipedia link I would say that the majority rule is not transitive. Also I'm not sure I understand exactly what is transitivity in this situation... With a usual preference relation $x\succsim y$ and $y\succsim z$ then $x\succsim z$.…
An old man in the sea.
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How should one determine the proper number of lags in a time series regression?

I am using time series data in economic model estimation. I want determine proper lag for Error Correcting Model (ECM) model for example. I can check AIC, SC and HQ criterion for determine proper lag. But I am not sure about max lag that I must…
Huseyin
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Predictive Game Theory

I was reading this neat piece by Fudenberg http://fudenberg.fas.harvard.edu/predictive%20game%20theory.pdf on Predictive Game Theory. He argues correctly that most traditional work in Game Theory is not suited for prediction in real world set-ups.…
user157623
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Are homothetic preferences monotonic?

I'm trying to understand intuitively what a homothetic preference is, and I am still not quite there. I understand the definition, that a homothetic preference implies that the slope of the indifference curve remains constant along any ray from…
dexter
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Hedging with volatility swaps?

I'm studying financial derivatives, and became curiosity in volatility products, more specifically volatility swaps. It always intrigued me how can you create products based on volatility. Who is interested in buying them? Other than traders who…
CMPSoares
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Leontief preferences

I can solve most utility maximization problems using my mathematical knowledge .... but not when it comes to Leontief preferences. I do not have a book to lean on (am self-studying), so would really like some help. How does one solve a general…
John Gattner
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