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1500 questions
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Long Term Economic Profit for Perfectly Competitive market
When we consider a perfectly competitive market, in the short run we will run a firm if the total economic profit though negative till price is above shutdown point.In long run we will run at an equilibrium where total economic profit is 0. I am not…
santhosh kota
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7
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What would be the economic effect of widespread instances of individuals paying off consumer debt?
In light of the economic impact of the recent shutdowns in response to COVID-19, the Australian Government is considering bringing forward planned tax cuts, that were do to be implemented gradually over the next five years. The tax cuts themselves…
Brett
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7
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3 answers
Effects of Eliminating Government Controls on Supply (organ donation)
I was having a discussion with somebody about organ transplants. I gave the free market pov that allowing the sale of organs would greatly increase the supply, and the all-in price would come down greatly if everybody knew that they (or their…
Jonathan Rachlin
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7
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4 answers
Multi-item Auctions in Mechanism Design
I'm new to auction theory and only started reading it a few days ago.
My question is this: Is it possible to design efficient auctions of multiple non-identical items? By efficient I mean maximize the social welfare.
Also, let's say there is only…
johnny09
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Banking System, Canada & US
Why are the way banks are established and spread out in Canada and US so different?
Canada:
There are only six major banks and most products offered are very competitive. Its almost unusual to hear or see any other minor or regional…
Nick
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7
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1 answer
Are no arbitrage models and equilibrium models equivalent?
This YouTube video from WHU (starting from 3:50) claims that no-arbitrage models (such as Black-Scholes and HJM) are equivalent to equilibrium models (such as CAPM or C-CAPM).
He uses the Euler equation and the stochastic discount factor (SDF) as…
Alex
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7
votes
2 answers
Do circular invoices count in GDP?
I'm trying to understand GDP and what it means.
Say that there are two US software companies, Foo Inc and Bar Inc. Foo Inc produces software and charges Bar \$1 million for its usage, while Bar Inc produces its own software product and charges Foo…
Ram Rachum
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7
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5 answers
Current status and trends in the choice of software for teaching econometrics
My institution is updating some of its bachelor and master study programs in economics and business administration, and the question of choice of software for econometrics and related classes has come up. I wonder what the leading institutions are…
Richard Hardy
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4 answers
What is an economic crisis?
I'm not sure if this is a silly question or overly semantic but I think the term "Crisis" is misunderstood (or at least misunderstood by myself). There are a number of ways the term is used, namely:
A Financial Crisis.
Sovereign Debt Crisis.
World…
EconJohn
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7
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2 answers
What is the purpose of monetary expansion during an economic lockdown?
Recently, most developed countries central banks substantially lowered their base interest rate. In Australia, this is now at their stated lower bound of 0.25%. We also have QE. This is all in an attempt to stimulate the economy.
At the same time,…
Jamzy
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7
votes
3 answers
Is foreign-financed Basic Income Guarantee inflationary?
The question came up on comments in Politics.SE:
Situation:
A government of a country sets up an unconditional Basic Income Guarantee (defined as monthly payments to EVERY resident, unconditionally, of a certain sum).
The sum can be roughly…
DVK
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7
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3 answers
If rent control "doesn't work" and supply induces demand, how can cities improve affordability?
Suppose we aim that moderately poor people (let's say 1.5× minimum wage) can afford the rent for an apartment meeting minimum quality standards and located within city limits. This may be a political aim.
What economic policies are effective to…
gerrit
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7
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2 answers
What is the usefulness of approximating an optimal decision rule that close enough to steadystate in RBC model?
I'm reading understanding real business cycle by Plosser.
Here's my crude understanding: For a RBC model, the FOCs of lagrangian together with transversality condition usually forms a nonlinear difference equations system. The standard way of…
Epicurus
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7
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1 answer
Is there always a pure Nash equilibrium in a resource selection game?
Denote $[r]\triangleq\{1,2,\ldots,r\}$.
Consider a game with $n$ players, $[n]$, each has $m$ strategies, $[m]$.
Each player $i$ has an associated payoff function, which considers only his selected strategy, and the number of players selected the…
R B
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7
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2 answers
Which areas of mathematical knowledge are required for understanding different genres of theoretical economics literature (and at which level)?
I would like to know which mathematical skills are most important to understanding different types of theoretical economics literature. An ideal answer would list disciplines used for different 'genres' of literature; for example: "Mathematical…
Constantin
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