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1500 questions
6
votes
4 answers
Are billboards beneficial for the economy? Why?
Billboards cost money to make and don't really seem to significantly benefit anyone other than billboard-makers. A company c putting up billboards presumably increases profits from the resulting increased number of customers, but don't competing…
Kelmikra
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6
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Solving Rational Expectation Models Linear vs. Nonlinear
Since I am coding some linear New Keynesian models in python and solving them under rational expectations (using the method of undetermined coefficients/linear time iteration), I was wondering whether anyone codes non-linear rational expectations…
Suttungr
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6
votes
1 answer
Doraszelski and Jaumandreu (2018) Intuition
Doraszelski and Jaumandreu (2018) estimate a CES production function with two forms of productivity shocks (1) labor augmenting and (2) Hicks neutral. They claim that the increase in labor augmenting productivity is the reason that the labor share…
Michael Gmeiner
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6
votes
1 answer
Definition of Diffusion Centrality in Banerjee et al. (2019)
I am reading "Using gossips to spread information: Theory and evidence from two Randomised Control Trials" by Banerjee, Chandrashekhar, Duflo and Jackson, where they discuss the efficacy of gossips in spreading information regarding policies/…
Ishan Kashyap Hazarika
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6
votes
1 answer
Precision of language regarding "statistical significance" in Wooldridge's *Introductory Econometrics* (7th ed)
I've been reading Jeffrey Wooldridge's textbook Introductory Econometrics: A Modern Approach (7th edition) in preparation for a class I will be teaching. I've appreciated the precise language he uses, for example, the distinction between an…
Austin D.
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6
votes
1 answer
Effect of bounding action space on the set of equilibria
Suppose $N$ players play a game, where each player's action space is $[0,1]$.
Each player has an identical continuous utility function $u:[0,1]\times [0,1]^{N-1}\rightarrow\mathbb{R}$, where the first argument is their own action, and the other…
cfp
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6
votes
1 answer
GE with an intermediate good
intro
I'm looking at a simple model with 1 consumer, 2 goods and 2 firms.
I'm trying to get a price vector [p0, p1] that makes it work.
By makes it work, I mean, supply = demand in all 3 markets.
the problem
The problem is that I'm actually getting…
user34331
6
votes
1 answer
Distribution of Wages
Is there any paper that looks at the distribution of wages? I'd like to see how many workers are in each percentile of labor income. I know that you could compute it using CPS or US tax data, but I suppose somebody must have done that before..
FooBar
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6
votes
2 answers
How might the Swiss currency floor be unwound?
The Swiss National Bank has been enforcing a currency floor since 2011, not allowing the EUR/CHF rate to drop below 1.20 by buying unlimited amounts of foreign currency as needed with newly created CHF.
I'm having trouble finding exact amounts, but…
GS - Apologise to Monica
- 374
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6
votes
3 answers
Intuition behind Comparative Advantange
I already read and ask NOT about pp 52-54, Principles of Microeconomics, 7 Ed, 2014, by N Gregory Mankiw. I understand such numerical examples that corroborate Comparative Advantage, but how can I intuit comparative advantage? I wish to quash my…
user4020
6
votes
1 answer
Is there a school of thought or concept that acknowledges that people aren't rational actors when it comes to economic decisions?
People are subject to all sorts of cognitive biases.
For example:
Advertising works, and not just by making people aware of a product,
but by appealing to emotional quirks.
People are subject to psychological pricing.
It seems clear that people…
dwjohnston
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6
votes
3 answers
Why are the financial intermediation theory of banking or fractional reserve theory of banking still accepted despite evidence to the contrary?
In most textbook economics I came across the financial intermediation theory of banking and the fractional reserve theory of banking are presented as theories as how money is created.
However there is evidence that these theories are wrong. See for…
CuriousIndeed
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6
votes
2 answers
Elasticity of Substitution of CRS Production Function
Suppose that $F(\cdot)$ has CRS in $K$ and $L$, the elasticity of Substitution is $\sigma_{K L} \equiv F_{L} F_{K} / F F_{L K}$.
I once derived this equation but I remember that it takes me quite long time and the process is quite tedious. I wonder…
Alalalalaki
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6
votes
1 answer
Deriving the Euler equation from a Continuous Time Dynamic Programming Problem (HJB)
Solving for the Euler equation in discrete time is farily straight forward with the use of the Benveniste Scheinkman theorem. However for the following standard Ramsey model:
$$\max \int_{0}^{\infty}e^{-rt} u(c(t))dt$$
subject…
EconJohn
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6
votes
1 answer
Relaxing the notion of Nash Equilibrium
Consider a game with $N$ players, each indexed by $i=1,...,N$. Every player $i$ has to choose a $J\times 1$ vector of actions $a_i\equiv (a_{i,1},...,a_{i,J})$ where each $a_{i,j}$ can be zero or one. The payoff of each player $i$ is $u_i(a_i,…
Star
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