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CES preferences intuition

I asked this question on math.stackexchange but deleted it from there and brought it here. I had a question about Constant Elasticity of substitution type preferences of the form: $$U=\int_{0}^{1}(c(\omega)^{\rho}d\omega)^{\frac{1}{\rho}}$$ where…
ChinG
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Why didn't the money printing by the US Federal Reserve since 2008 lead to inflation?

http://www.telegraph.co.uk/finance/comment/liamhalligan/8484530/Americas-reckless-money-printing-could-put-the-world-back-into-crisis.html America's reckless money-printing could put the world back into crisis Last week, Ben Bernanke suggested…
curious
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Monopolistic and Bertrand (Nash) Competition

Can we view the monopolistic competition equilibrium (a la Dixit-Stigliz) as the limit case of a Bertrand competition with an infinite number of firms providing differentiated products, where the resulting equilibrium is a Nash equilibrium in…
emeryville
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Proof that the diff-in-diff (wrt sample size) of the expectation of a first-order statistic is positive (Stigler 1961)

I'm trying to prove a claim made in Stigler (1961), "The Economics of Information." This claim has to do with showing that the marginal benefit of making an additional search (e.g., searching an additional store for a lower price) is decreasing in…
jmbejara
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Calculating rate of growth of per capita income

Given this question: National income is increasing by 1.5% a year and population by 2.5% a year. What is the rate of growth of per capita income? Attempt: Since per capita income is GDP/ population. I divided 1.5 by 2.5 and got 0.6. Is this…
user274246
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Risk Premium in the Expected Utility Theory

Consider an agent with utility function $u$, initial wealth $\omega$, and a random variable $x$. By definition of the risk premium $R$, we have $$ Eu(w+x) = u(w+E(x)-R). $$ The classical derivation of the risk premium is as follows: A Taylor series…
emeryville
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How much do real-estate prices correlate with apartment rental prices?

I've been trying to find sources that mention this, and have tried to find graphs of data so I can compare myself, but I haven't been able to. Do real-estate sale prices correlate positively, negatively, or not at all with apartment rental prices? A…
B T
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Usefulness of the Convexity Axiom

I'm asked to write an essay supporting the statement which says the convexity axiom has little economic content and should be eliminated from the economic models of consumer theory. I'm supposed to find literature which supports my point with…
Joe
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Unemployment and the Frisch-Elasticity

There is the long debate on the Frisch-Elasticity being the driver of unemployment over the business cycle. One argument against the voluntary-unemployment mechanism of RBC models is that if we distinguish two subgroups of the population with…
FooBar
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Robust Standard Errors in Fixed Effects Model (using Stata)

I'm trying to figure out the commands necessary to replicate the following table in Stata. This table is taken from Chapter 11, p. 357 of Econometric Analysis of Cross Section and Panel Data, Second Edition by Jeffrey M Wooldridge. Here I'm…
jmbejara
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Saturation of durable goods

It seems one factor ignored (or is it?) in economic theory is saturation of durable goods. By this I mean the fulfillment of fixed need for durable goods. We can imagine income to be divided between consumables, durable goods, capital investments…
Lassie Fair
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Prove the budget correspondence is upper hemi-continuous

Let $p \in \mathbb{R}_+^L$ be price vector and let $w \in \mathbb{R}_+$ be wealth of the consumer. Define the Budget correspondence $B(p,w) =\{x \in \mathbb{R}_+^L : p\cdot x\le w \}$ . How to prove that this budget correspondence is upper…
Kenneth Chen
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Nash social welfare function with negative exponential utilities

I got one question about the Nash-SWF. Typically it is defined as the product of individual utilities, ie. $$ NSWF:=u_1(x_1) \cdot u_2(x_2) \cdot u_3(x_3) \cdot ... $$ For this to make sense, individual utilities are restricted to always being…
Vincent
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Local Non-Satiation Proof

I have been having trouble with how to go forward with a proof for about three days now. I know the basic structure of the proof, but can't seem to construct it. Basically, I am trying to do a proof by contradiction for the following: Say $u: x…
Kitsune Cavalry
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Prove that a continuous $\succsim$ is quasilinear

This question is closely related to Mas-colell, Whinston, Green: Microeconomic Theory, Question 3.C.5b Let $\succsim$ be a strictly monotone, continuous, and rational preference relation on $(-\infty, \infty)\times \mathbb{R}^{L-1}_{+}$. …
möbius
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