Top new questions this week:
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Suppose $\theta \in [\underline\theta, \bar\theta]$ is distributed with CDF F(.). What does it mean when I say that this F is bounded away from 1? Does it mean that F can never take the value 1 in …
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One geometric interpretation of (at least one term of) the potential function I’ve come across is as the Riemann-approximated area under an individual player’s cost as a function of the number of …
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We know that $ W = \mathbb{E}(P)f(u, z) $ , so that nominal wage $ W / P = (\mathbb{E}(P) / P)f(u, z) $ From Blanchard. Furthermore, $ W / P = 1/(1+m) $ (where m is defined as the markup on wages to …
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I see Greek 10Y debt yielding only +86bps spread over US 10Y debt. Greek debt to GDP runs above 190% and was not decreasing even prior to the pandemic response. Moreover, Greece has gone through …
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The one version of the Second Welfare Theorem states that: if there exists a competitive/Walrasian equilibrium and an endowment $X$ is Pareto efficient, then there is a price vector $\hat{P}$ for …
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Dear all, can someone please share a simple example for market clearing via Uniform Pricing using an Optimization Model? I am trying to simulate a market using bid values with quantity and price, from …
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A compound Poisson random vector $Y$ is well defined in this site in wikipidia. Nothing prevents me from compound strictly stationary stochastic processes instead of compound random vectors. The …
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Greatest hits from previous weeks:
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I recently read in a news article that a large amount of Libyan banknotes printed in Russia were seized in Malta following an order coming from the USA. Both Russia and the USA have geostrategic …
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GDP is a measure of a country’s production. $$GDP = C + I + G + X_n$$ $C$ = Consumer Consumption $I$ = Gross Investment $G$ = Government Expenditures $X_n$ = Exports – Imports Exports are what we …
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I have a formula for the long-run total cost curve, $$TC(Q) = 6000Q + 40Q^2 + Q^3$$ and I’m trying to find the quantity that minimizes the long-run average total cost. I assume I’m trying to find …
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What are some results in Economics that are both a consensus between most economists and far from common sense? I would also welcome suggestions of clear definitions for what we should mean as …
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Wikipedia explains the difference between products that are “gross substitutes” and products that are “net substitutes”. However, the mathematical explanation doesn’t give much intuition about these …
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I am reading an article in the Economist. It is discussing the China’s unbalanced economy especially the lower household consumption proportion in GDP than the global average. The writer thinks the …
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I am having a hard time deciding for this question: If all quantities produced rise by 10 percent, and all prices fall by 10 percent, which of the following occurs? A) Real GDP rises by 10 percent, …
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Can you answer these questions?
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A question concerning the income and substitution effect when the wage changes Let us assume that the substitution effect leads to more less leisure as the relative price of leasure increases, and …
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I have a problem understanding the integral in front of the modified Ramsey problem of the DICE model. So U the utility of one household is determined by u(c) the instantaneous utility and the rest of …
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