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1500 questions
5
votes
1 answer
IV Regression with More Observations for First Stage than Second Stage
This is a very basic question, but I need help. Imagine I have a dataset for variables y, x, and z. I am running an instrumental variable regression such that y is my main outcome variable. So I am trying to estimate the following regressions.
$$
y…
Student in need
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1 answer
Third price auction from Auction Theory by Krishna, Order statistics
Notation:
$Y_1$: Highest order statistics of $(N-1)$ players' valuation.
$F_n^M:$ The distribution function of the highest $n$th order statistics of $M$ players.
$f_n^M:$ The density of the highest $n$th order statistics of $M$ players.
In Vijay…
Longye Tian
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5
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4 answers
Why Don't We Insure Against Recessions
I'm not an economics student or anything like that, but I've had a question on my mind for a while now. Why don't insurance companies insure against recessions. Like if the economy were to downturn, you get a payout which can help your business…
The Technomancer
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5
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1 answer
Nonlinear budget constraints (for quantity discounts)
I was thinking about quantity discounts and if there is a possibility to model them not as bundles (as is typical for second price discrimination) but rather as prices being some continous functions of quantity demanded, meaning that consumer pays…
Athaeneus
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5
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2 answers
Parallel pretrends in Callaway Sant'Anna "did" event study package
I have noticed that in some of my event study regressions, depending on which R package I use I get different results regarding the violation of parallel pretrends. Specifically, I ran an event study regression using the "fixest" package, which…
Oberberg
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5
votes
1 answer
Trying to understand the notion of required return
I have been thinking about the notion of required return lately. I am not familiar with a formal definition, but I have tried to reason my way towards one. Please let me know if my approach makes sense and if it aligns itself with any mainstream…
Richard Hardy
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5
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1 answer
Do we have some evidence of overshooting?
I was going through overshooting of exchange rates (which I probably haven't seen since undergrad) and it seemed to me that the story is a bit of a stretch. I wonder if there is some empirical test that would convince me otherwise.
Daniel Wills
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5
votes
2 answers
estimation of certainty equivalent without given utility function
The body of question is:
Assume the decision maker is risk averse, $u(40)=\frac{1}{2}(u(0)+u(100))$, $u(m)=\frac{1}{2}(u(0)+u(180))$, try to estimate the range of m.
It is easy to get the infimum of m: let u(180)=u(100) and $m \geq 40 $. However,…
Foracustle
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5
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1 answer
Housing Supply Elasticity: Proxy for Exogenous House Price Movements
Mian and Sufi (2014) say
We use individual and zip code level data, and exploit cross-sectional variation in house price growth to estimate the impact of rising home values on borrowing and spending. We use the Saiz (2010) housing supply elasticity…
FooBar
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5
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3 answers
Confused on finding same preferences
I'm confused on how to determine if utility functions represent the same preferences. The question is as follows:
Which of these utility functions represent the same preferences as $u(x,y) = \sqrt(xy)$?
(A) $u(x,y) = x^2y^2$
(B) $u(x,y) = xy$
(C)…
neoncat
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5
votes
2 answers
What is the difference between economic rent and economic profit?
I've been having a hard time understanding the distinction between economic rent and economic profit. As far as I understand it, the terms mean as follows:
Economic rent is any revenue received by the owner of a factor of production (as a result of…
Mark Morales II
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5
votes
2 answers
What are some growth theories that are considered the most correct at the moment?
In under grad intermediate macro classes they often teach the Solow model. While intuitively it makes sense, it seems like it no longer is really taken seriously anymore (I could be wrong).
From my understanding (which could I be wrong of course),…
Michael
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5
votes
1 answer
Monopolies on Giffen Goods
I’m taking an intermediate microeconomics course in college and just got to the topic of monopolies. I know the concept of a Giffen good.
As always, Revenue is given by $R= Pq$.
Since the monopoly has market power, $P$ is not constant.
Therefore,…
Nicolas Torres
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1 answer
What happens to the economy if a country simply ban inflation?
Recently Belarus simply decided to ban inflation. the president quoted
"From today, any price increase is prohibited. Prohibited!,"
This is easy to do for a dictatorship but how economy is affected if countries simply ban prices rise !!!
source:…
Lkaf Temravet
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5
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2 answers
What was the original paper that showed that estimates of risk aversion from micro and macro are inconsistent?
One of the well known paradoxes in macroeconomics is that estimates of risk aversion from experimental micro data do not match the ones estimated from macro data.
I know there was an important paper that pointed this out first but I forgot the name…
csilvia
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