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1500 questions
5
votes
2 answers
Growth theory / Initial GDP: positive coefficient sign
I estimated growth regressions for several EU countries. In each of them, the sign of "initial GDP"'s coefficient is statistically significant but positive, which contradicts growth theory as well as most of other published papers on this topic. I…
user6171
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5
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1 answer
How long does it take for shocks to propagate through the price system / market?
Has anyone calculated or theorized about how long it takes prices to come to some kind of equilibrium after a market shock has happened? How has this changed over time?
An example might be a spike in the price of oil. If oil independently spikes…
B T
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5
votes
3 answers
Is consumer surplus subjective?
The producer surplus is objective because the it is the total revenue minus the total variable cost. For example, if the producer sold 100 goods at 5 each, and the total variable cost was 300, then his surplus is 200. The total revenue and variable…
Ben
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Estimating the second derivative of function from optimizers
Consider the following optimization
$$x^*(s) = \max_{x\in X} \big(\,f(x)-sx\,\big)$$
where $f$ is assumed to be a strictly concave function and $X$ is an interval constraint, e.g $X = [0,b]$. We do not know the exact function $f$.
Assume that we can…
jonem
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5
votes
2 answers
Define and characterize equilibria of the following game
Consider the following game between a monopolist firm and a consumer. Consumer's income is $1$, and he needs to allocate it between period 1 and period 2 consumption to maximize his utility $u(c_1,c_2)=c_1+c_2$, where $c_t$ is the consumer's period…
night_owl89
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5
votes
2 answers
Neoclassical economic profit and growth theory versus marxian
Marxists have a very specific "profit" and "economic growth" theory. According to marxists, profit doesn't come from technology, whose cost will be reflected in the price of whatever commodity the technology owning businessman is selling. Instead,…
mathdummy
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5
votes
1 answer
Music Streaming Impact on Producers
I am currently writing a news commentary on music streaming services. My commentary is focused on demand and supply, consumer and producer surplus, externalities, and public goods. And there are a few things that I am kind of confused in some…
Paco Wong
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5
votes
1 answer
Utility Representation of Lotteries
We went over a lemma in class leading up to a larger theorem. The Lemma states:
Let $\succeq$ be a rational preference relation on $\mathscr{L}$ and let $\succeq$ admit utility representation under Von-Neumann-Morgenstern expectations.…
Kitsune Cavalry
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5
votes
1 answer
Independence axiom of lottery when $\alpha \ge 1$
When studying preference over lotteries we learned the independence axiom which goes like this:
The preference relation $\succsim$ on the space of simple lotteries $\mathscr{L}$ satisfies the independence axiom if for all $L$，$L^\prime$，$L^{\prime…
Kenneth Chen
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5
votes
1 answer
Self-teaching 1st year PhD Microeconomic Theory
How should one proceed if he wanted to master the microecon theory course typically taught in the 1st year of a PhD program on his own? Which text(s) and/or online course(s) should he follow? Suppose the guy has had a good training of econ up to the…
quasi_rational
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5
votes
1 answer
Convexity of Walrasian Demand
A follow up to my previous question:
Given $u(x) = (x_1-b_1)^\alpha (x_2-b_2)^\beta(x_3-b_3)^\gamma$
and ending up with from a maximization that
$$x(p,w) = (b_1, b_2, b_3) + (w - (b \cdot…
Kitsune Cavalry
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5
votes
1 answer
Linear Expenditure System of Demands, Derivation Help
This problem I am working on comes out of--surprise--the Mas-Colell book for graduate micro (3.D.6). I think I have correctly used the FOC of the Lagrangian of the utility maximization problem to derive the consumer's Walrasian demand. My answer…
Kitsune Cavalry
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5
votes
1 answer
How to measure Tobin's q?
How do people calculate Tobin'q empirically?
Does anyone use it to make investment decisions? In particular, the version I learnt has no company debt involved with only capital under consideration, will this affect empirical research?
Kenneth Chen
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5
votes
1 answer
Stone-Geary utility function, derivation of Marshallian demand
I am reading a paper on structural change. It has three sectors and it features non homothetic utility function, namely a CES with some thresholds for the consumption of the three goods. The UMP is as follows:
$$
\max_{C_k; k=1,2,3}…
Ceschi
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5
votes
2 answers
Is fisher equation a definition, identity? Or is it rather a very good estimate
So let us agree that the fisher equation is $1 + i = (1 + r)(1 + \pi).$ Is it a definiton or good estimate. Intuition tells me this make so much sense and almost qualify as an equation that must hold. However, sources online tell me that it is a…
Kun
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