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1500 questions
5
votes
2 answers
Are White's Robust standard errors robust to clustered errors?
I want to ask about OLS White's 1980 "robust" standard errors.
The key assumption, is that regression errors $u_i$ have distinct variances $σ_i^2$. Then the variance matrix is: $$\Sigma = \operatorname{diag}(\sigma_1^2, \ldots, \sigma_n^2)$$ with…
user157623
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1 answer
Calculating the cost of a year without land-tilling
The motivation to this question is the Biblical commandment of Sabbatical year, in which the land should be allowed to rest and should not be cultivated. I am trying to estimate how much would it cost to actually implement this commandment in an…
Erel Segal-Halevi
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5
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2 answers
Is there relationship between increasing and decreasing returns to scale and homogeneity?
According to Varian's Macroeconomic Analysis (page 15), when returns to scale are constant, production function will be homogeneous of degree 1.
When he discusses increasing and decreasing returns to scale he does not mention homogeneity of the…
HerrMaximus
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5
votes
5 answers
Macro papers that an undergrad would be able to replicate
I'm writing my bachelor's thesis this spring, and would like to do it by replicating a modern empirical paper in either macro or finance. I've tried to find a paper by skimming through renowned journals, but most of the publications seem too…
elaia
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5
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1 answer
A question about an exercise in Hal R. Varian, Microeconomic Analysis (1984), Ch.3 Exercises 3.1 (c), Page 48
I have a question on the following exercise:
A competitive profit-maximizing firm has a profit function $\pi(w_1, w_2) = \phi_1(w_1) + \phi_2(w_2)$. The price of output is normalized to be 1.
(c). Let $f(x_1,x_2)$ be the production function that…
dchao
- 97
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5
votes
3 answers
intertemporal utility function usage : calculating consumption
I have encountered this a lot in my exams and can not seem to understand how to use these functions here is an easy exemple :
A consumer who will only live 2 periods receives 1000€ in the first period and 5000€ in the second period, if the interest…
Amr El Aswar
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5
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1 answer
Why was 'structural' chosen to mean 'structural unemployment'?
Source: Economics (3 ed, 2014) by N Gregory Mankiw, Mark P. Taylor
structural unemployment [=] unemployment that results because the number of jobs available in some labour markets is
insufficient to provide a job for everyone who wants…
user4020
5
votes
4 answers
Taking observed preferences seriously
You often hear economists (proudly) say that they don't take stated preferences seriously, but instead rely on observed preferences. Correct?
To me both are problematic if you want to understand preferences, since people often do things they don't…
snoram
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5
votes
2 answers
Horizontal demand curve
If it is assumed that every consumer within a particular region has the same 'valuation' for a certain product, and consumers will purchase no more than one unit of the product, is the market demand curve perfectly elastic (horizontal)?
Any insight…
James
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5
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1 answer
Instrumental variables for minimum wage
I was wondering if there is a classic instrument for minimum wage as there is for schooling or other variables. If so, how does it fares with respect to most established designs like spatial differences…
user157623
- 1,453
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5
votes
1 answer
Why can't I use TMoLM for this bliss point problem?
I am having difficulty with a particular bliss point problem. The basic issue I have is my approaches seem flawed and I can't tell why.
The equation is
$$U(x,y) = 36x -4x^2 + 6y-2y^2$$
subject to
$$ 5x + 7y=40$$
My first instinct was to use the…
Stan Shunpike
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5
votes
1 answer
The paradox of IOU
If money is just an IOU then the initial creation of money contradicts this assumption, doesn't it?
A central bank doesn't owe money to any other entity (national central banks or commercial banks) when creating money. Is there a scientific term for…
BlankerHans
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5
votes
1 answer
Bank runs, deposit guarantees, and moral hazard
I understand the concept of moral hazard. If a government guaranteed all bank deposits 100%, bank customers would simply go to the bank with the highest interest rates and rely on the guarantee that they couldn't lose anything. It guarantees 100% up…
nigel222
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5
votes
1 answer
How to find the contract curve when both agents have linear utilities?
I'm trying to solve the following excercise:
Find the contract curve for an exchange economy where agents' ($A$ and $B$) preferences and endowments are given by:
$u_A = x_A + y_A$
$u_B = s x_A + y_A$
$(\omega_{1A},\omega_{2A}) =…
Nicolas Torres
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5
votes
1 answer
Moral Hazard or Adverse Selection?
I pay the doctor before he conducts the surgery.
Can anyone explain to me whether this statement shows moral hazard or adverse selection?
UnusualSkill
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