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A recursive production function

I've been reading a book on a Kaleckian economics model, but there is a recursive function that has been bothering me. Can anyone provide some insight into why the equation why designed like this? Quote from the book: $Y = \min\{aE, uK\} \quad…
Jack
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Would a major wealth redistribution cause a major inflation?

I've seen a video on wealth distribution on the US where perceived, "desired"(by the majority) and actual income distributions are shown. I've been thinking what would happen to the purchasing power if such a distribution was attained. How much…
galmeida
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Right definition of natural rate of unemployment?

Earlier I studied macroeconomics from Blanchard. But now while reading Mankiw's Macroeconomics I found different definition for natural rate of unemployment. According to Blanchard, "the rate of unemployment (and by implication the level of output)…
Dhruv Goel
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Is over-valuation of a start up genuinely detrimental to the start up's future?

I recently watched S02E01 of Silicon Valley. In it, having demonstrated a breakthrough algorithm, the guys are pursued by investors with increasing funding offers. However, the founder is warned with a higher valuation, there are higher…
dwjohnston
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Real Positive Eigenvalue, but Stable Dynamics

UPDATE I was not thinking straight anymore and got totally confused after working hours on my equations. The point is, I have an unstable system, but I force it on the stable path. After realizing that crucial point everything made perfect…
clueless
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Infinitely repeated game: prisoners' dilemma

I have done most of the legwork, but I have fallen short at the final hurdle. Could you please correct my mistake(s)? Given the condition $x>0$ I need to consider the infinitely repeated game where the above strategic form is the stage game. The…
Five σ
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Modelling Pay what you want

I have been trying to model a Pay What you Want scheme. Now, for a monopoly it is clear that monopoly will have more profit by setting monopoly pricing assuming all players are selfish. But consider a scenario of 2 sellers one posting a fix price…
Arcapol
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What are the reasons for Russian Ruble to strengthen in the past few days?

1 USD was about 75 Russian Rubles before the war in Ukraine began. After the sanctions, Russian Ruble quickly declined and 1 USD skyrocketed to 139 Rubles. Now it is back to around 85. What are the reasons for it? As the West is proposing more and…
Archil Zhvania
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Optimal stopping (reference request)

I am interested in the following optimal stopping problem: On each day, a number $a_i$ is drawn from a (possibly fixed) distribution. I can either stop now, getting a payoff of $a_i$, or wait for a later draw. In principle, this could go on…
afreelunch
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L-infinity and weak-star topology

While reading economics papers, especially those related to economy with land, I often encounter the terms $L^\infty$ and the "weak* topology". They seem like very basic terms, but I couldn't find a basic explanation of them. Here is a typical…
Erel Segal-Halevi
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Where are the equations? Limits to Growth, Meadows et al., 2004

I'm specifically interested in the most recent World3-03 model from 2004. I was just wondering if someone knows how they actually derive their model or any of their predictions? I couldn't find any mathematical description of their model? Book made…
schroederadrian
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Does the Sonnenschein-Mantel-Debreu theorem fundamentally undermine Mises' Economic Calculation Argument?

So recently I have been thinking a lot about this fundamental question: Does the Sonnenschein-Mantel-Debreu theorem disprove the "Law of Demand"? Basically, the Sonnenschein-Mantel-Debreu theorem (SMD from here on out) states that you cannot simply…
Robotic_Cow
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First-order condition with arbitrary function

I am trying to use an auction model to simulate bids in a uniform price carbon emissions auction. That means it would be an auction with multiple bidders and one seller selling multiple units, or shares. In such an auction, one bids for blocks of…
lbt3
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What does a supply+demand curve look like for fare evasion?

Consider the demand curve for fare evasion on a train. The price (I suppose) would be the average amount of money paid per ride in fines, and the quantity would be the average number of fare evaders caught. The supply curve would quantify the target…
JSideris
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Why land supply is inelastic?

I am reading about Georgism, and I am puzzled by the notion that the land supply is inelastic. I posted a question in the reddit of georgism, but that left me more confused than before. It seems that I have a notion of supply with which not…
chuse
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