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1500 questions
6
votes
1 answer
Tactical voting when the voting rule is unknown
The Gibbard-Satterthwaite theorem implies that, in every non-dictatorial voting system with 3 or more candidates, there is a preference profile in which some of the voters can gain by lying about their preferences. However, usually this gain…
Erel Segal-Halevi
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6
votes
1 answer
Optimization of Households' utility in " Rule-of-Thumb Consumers and the Design of Interest Rate Rules " (Gali et al., 2004)
I can't figure out how the calculation of first order conditions was carried out.
I can't figure out where the stochastic discount factor came from.
Paul
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6
votes
1 answer
Any study on performance gap between optimal mechanism and linear mechanism?
In mechanism design, the optimal mechanism is usually not linear in the agent's type. However, linear mechanisms are easy for implementation. Are there any studies on the performance comparison between optimal and linear mechanisms. I guess a…
Justin
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6
votes
2 answers
Did capitalism exist before the 18th century?
Were there capitalistic economies before the 18th century?
Geremia
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6
votes
1 answer
What major monetary policy actions were taken during the Great Recession (2007-2009)?
What major monetary policy actions were taken during the Great Recession (2007-2009)?
Quantitative easing and unconventional policy actions such as asset purchases and "forward guidance". I think I'm missing some things.
Amy
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6
votes
1 answer
What did the Swiss National Bank use to purchase EUR while pegging the Franc to the Euro?
To peg its currency (CHF) to the Euro (EUR), the Swiss National Bank (SNB) made purchases of EUR to the tune of several hundred billion. By reducing the supply of EUR, the SNB made the EUR relatively valuable, achieving the peg.
But how did the SNB…
zkurtz
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6
votes
1 answer
Present value of a payment
Suppose I've just won 1'000'000 dollars in a game show. At the end of the program they tell me that they will pay me the prize as following: they will deposit in my bank 50'000 dollars every year for twenty years with a constant annual interest rate…
ChicagoCubs
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6
votes
2 answers
Alternatives to avoid sanctions
Recently we saw that the EU and Iran devised an instrument called INSTEX to avoid dealing in U.S. dollars and, hence, avoid U.S. sanctions. Similar thing is being planned between India and Russia (regarding the S-400 deal) to avoid U.S. sanctions…
Ankur Singh
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6
votes
2 answers
Why is the Australian dollar, often viewed by traders as a proxy for the Chinese economy?
The Australian dollar, often viewed by traders as a proxy for the
Chinese economy, gained 0.3 per cent against its US counterpart.
From: S&P 500 hits one-month high on renewed trade hopes (September 5, 2019)
q126y
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6
votes
1 answer
Empirical ranking of firms based on productivity
I want to rank firms based on a metric, let's call it productivity.
Theoretically, this firm productivity measure may be well defined. Empirically, however, data that account for all dimensions of productivity are generally unavailable.
On the other…
bsecon
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6
votes
1 answer
Optimal price function: application of calculus of variations
The problem, I am trying to solve is based on the paper by Rochet and Vila 1994 (see literature below). In fact, it is a variant of the seminal paper of Kyle 1985 in the finance/economics literature. Despite the problem being framed in the finance…
Matthias
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6
votes
4 answers
Does stock picking work?
Does stock picking work? Why/why not? What does the research say about it?
(I was expecting that this should already have been asked and looked quite extensively for such a question but couldn't find anything)
d-b
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6
votes
2 answers
Perfect complement preferences in an exchange economy
So I have an exam in a bit, I understand that to find the optimal choice you have to equate tangent of the two indifference curves. However, if the other indifference curve is a perfect complement, what is MRS? I calculated the MRS as…
Skipe
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6
votes
1 answer
How does expected utility theory treat losses?
I've been reading about prospect theory lately and have read often that prospect theory predicts people will be risk averse in gains and risk seeking in losses. This statement is typically supplemented with the phrase ", contrary to the standard…
leecarvallo
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6
votes
1 answer
Signalling Model (Rearranging the FOCs of UMP)
I'm currently reading "SAVING RATES AND POVERTY: THE ROLE OF CONSPICUOUS CONSUMPTION AND HUMAN CAPITAL" by Omer Moav and Zvika Neeman, and I encounter some problem deriving one of the equations.
Utility function, where $y$ is income, $\widetilde y$…
Estee L
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