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1500 questions
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votes
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Purchasing Power Parity (PPP) and Law of One Price (LOP)
If PPP were to be satisfied in reality, does that mean the Law Of Price is satisfied for all goods in a basket of goods used to generate the price levels of the country? Or, since PPP uses only average price of basket, is there possibility of…
user51966
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Economic schools of thought VS Econometrics
From Wikipedia:
In the history of economic thought, a school of economic thought is a group of economic thinkers who share or shared a common perspective on the way economies work
Why is it that different economic schools of thought are still…
EconJohn
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How is money created?
This might seem like a really simple question, but I am really troubled by it on a macro scale. The money has to come from somewhere. Someone might start up a business that creates things or takes things from the Earth. You could say this is…
Josiah Savoie
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2 answers
Minimalist example of voter profiles yielding different outcomes
Let the set of alternatives be $\left\{a,b,c,d\right\}$.
Let there be $n$ types of voter profiles, each type with a different strict ordering over the set of alternatives.
The number of voters belonging to the profile types need not be the same, let…
Giskard
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Roy's identities for Stone-Geary utility functions
I'm having trouble showing Roy's identity for the following Stone-Geary utility function:
$$U(x)=\prod_{i=1}^n\left(x_i-\gamma_i\right)^{\beta_i}$$
where $\sum \beta_i=1$ and $\gamma_i$ is the minimal consumption of $x_i$.
I showed that the…
Grizzly0111
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votes
2 answers
Formal definition of perfect information
I am looking for the formal definition of 'perfect information' in game theory.
Please direct me to a book or preferably an online paper where I can find it.
On a related note:
The Wikipedia page for the term is not very useful. It only offers an…
Giskard
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6
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2 answers
Economists studying the eldery and intergenerational transfers
Does anyone knows who are the leading economists in the field of elderly and intergenerational transfers?
I'd like to know what are the current topics they are working on.
itzel
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6
votes
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Intertemporal Utility Maximization
Suppose an economic agent’s life is divided into two periods, the
first period constitutes her youth and the second her old age. There
is a single consumption good, C, available in both periods. The
agent’s utility function is given…
MAthsjunky
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How to make sense of so many conflicting theories and ideas in the field with an open mind? Is every school of economic thought as valid as the rest?
'm a junior economics major and lately I've been in a sort of crisis because I feel like I'm not sure what economic ideas I believe in anymore. Don't get me wrong, I love reading anything that has to do with the subject. Thing is, I just feel like,…
user12012
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votes
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Why are "transfer payments" not part of GDP?
It is well-known that transfer payments are not counted in GDP (e.g. wikipedia 1 and wikipedia 2).
For instance, exercise 2.c in Chapter 2 of Jones book's Macroeconomics ask to calculate how much GDP changes if:
During a recession, the government…
luchonacho
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votes
2 answers
Minimum Wage effects on Adjacent Cities
When a city like Seattle raises the minimum wage to 15/hr, how does it affect the labor market in adjacent cities?
Are there examples, studies or accepted practices to address: Difficulty staffing entry level positions when labor pool can work…
Jordan Walls
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6
votes
2 answers
Pareto optimality with externalities
I'm reading the book "Economics of natural ressources and the environment" written by D. Pearce and R. Turner. They explain that the competitive equilibrium is not a Pareto optimum in case of (positive or negative) externalities. The example they…
Dust009
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Is manufacturing automation really a bad thing for the economy?
Media loves to create a technophobia frenzy for automation and robots. Would REALLY automation in manufacturing cause the economy to collapse?
Taking an extreme case that is impossible to happen even in the far future due to technical challenges,…
NinjaStars
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6
votes
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Tools for Forcasting Unemployment Rate
I've noticed that economists have been very accurate when it comes to predicting unemployment rates.
Most of their predictions usually fall within a 0.2% difference between their forecasts and the actual unemployment rate or are dead on what the…
EconJohn
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What's the difference between Quantitative Easing and regular central bank operations?
Most articles describe QE as purchasing government securities on the market. I thought that was what ordinary day to day operations of the central bank were in their efforts to maintain a target interest rate. So if they aren't buying government…
erv
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