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What are good analogies for explaining negative externalities?
I'm making an infographic about the negative externalities of driving, and I want to explain that taxation is not "just" a tool to get a desired effect; it's a price-correcting mechanism that internalises external cost.
What makes it difficult is…
Victor Nielsen
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Infinitely repeated games and real-world situations?
I do understand the gist of what infinitely repeated games are in that T=$\infty$ ; that is the stage game is played each period for an infinite number of periods.
In his book "Strategy", Watson makes the following claim:
Although such a game may…
Five σ
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Proof of Saddle-Path Stablility in Ramsey-Cass-Koopmans model
I'm currently struggling to proof the saddle-path stability in the Ramsey-Cass-Koopmans model. Based on the books Introduction to Modern Economic Growth by D. Acemoglu (chapter 7 and 8) and Mathematics for Economists by Blume and Simon (chapter…
freakonomist
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Why does synthetic control not suffer from backdoor confounders?
From Scott Cunningham in Mixtape, on propensity score matching:
propensity score matching has not seen as wide adoption among
economists as in other non-experimental methods like regression
discontinuity or difference-in-differences. The most…
Daycent
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Literature recommendation on organised crime
I am trying to write a term paper on organized crime analyzing European countries. I would appreciate it if anyone would suggest good literature on violent crime, good governance (gov't integrity, the rule of law, political accountability), and…
Maybeline Lee
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Can I run a regression splitting the sample into "female" and "male" cohorts, instead of just including "sex" as a control variable?
Say I want to look at the impact of education on earnings:
income = β0 + β1education + β2age + β3*male + e
Could I also run this regression two more times, splitting the sample into "male" and "female":
income = β0 + β1education + β2age + e if…
amess
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A large spike in home ownership in the U.S. in 2020: why?
Noah Smith's blog post "Yes, most Americans own capital" states
A majority of American households — consistently a little less than 2/3 — are homeowners:
and follows that up with a figure:
I find the year 2020 rather curious. There is a sharp,…
Richard Hardy
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Banking system in countries without their own currency
I am interested in the working of the banking system in countries that don't have their own currency, e.g., Ecuador or Panamá. Can you point me to studies or articles about it?
For example, do banks in Ecuador and Panamá have accounts/reserves in…
Tripanosomagambiense
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Learning post-keynesian and marxist economics
My question here is not about theory, but more about the teaching landscape. I'm currently learning economics in Canada, and I realize that the academic world is very homogeneous. I'm quite impressed by the lack of pluralism, and the absence of any…
Alexandre Michaud
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IV - Is this procedure valid?
I have three variables: $y$, $x_1$ and $z$.
I'm interested in finding the effect of $x_1$ on $y$.
Unfortunately $x_1$ is endogenous so I use an instrument z.
I know that $z$ is correlated with $x_1$. The problem is, $z$ is correlated with another…
user4354
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Why is food less expensive in India than the United States?
India has 4x the population, less land, and far worse technology and infrastructure than the United States. Shouldn't food cost in the US be less expensive? I've never been to India, but it seems like food costs far less there from what I see on TV…
user1689987
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Risk Premia in Continuous Time
Take some state variable $X(t)$, which follows the law of motion
$$ \dot X(t) = f(t)X(t) $$
where $f(t)$ is a policy function, and determines the growth rate of $X(t)$. As a second shock, we have $\psi$, which is iid. The agent defaults whenever
$$…
FooBar
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Is there a theory about investors' behaviour during bubbles?
As far as I can see there are two senses in which it's 'rational' for an investor to buy during a bubble.
The investor has erroneously overvalued the value of the stock/commodity.
The investor is aware that it's a bubble and is overvalued, but…
dwjohnston
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Alternative to Intermediate-macroeconomics book by Mankiw
Please suggest a good alternative to intermediate macroeconomics by Mankiw. A book with better teaching and which develops better understanding but at a similar level in terms of difficulty. I personally do not like mankiw's book. I can understand…
Rain
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Why the total value of the whole economy is constantly appreciating?
Take S&P for example. In the long run it just keeps climbing. Same for the market as a whole. Why would this happen? Why the market keeps going up (in the long term) all the time?
(source)
Sparkler
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