JA Economics® Course Overview and Outline
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A Brief Primer on the Economics of Targeted Advertising
ECONOMIC ISSUES A Brief Primer on the Economics of Targeted Advertising by Yan Lau Bureau of Economics Federal Trade Commission January 2020 Federal Trade Commission Joseph J. Simons Chairman Noah Joshua Phillips Commissioner Rohit Chopra Commissioner Rebecca Kelly Slaughter Commissioner Christine S. Wilson Commissioner Bureau of Economics Andrew Sweeting Director Andrew E. Stivers Deputy Director for Consumer Protection Alison Oldale Deputy Director for Antitrust Michael G. Vita Deputy Director for Research and Management Janis K. Pappalardo Assistant Director for Consumer Protection David R. Schmidt Assistant Director, Oÿce of Applied Research and Outreach Louis Silva, Jr. Assistant Director for Antitrust Aileen J. Thompson Assistant Director for Antitrust Yan Lau is an economist in the Division of Consumer Protection of the Bureau of Economics at the Federal Trade Commission. The views expressed are those of the author and do not necessarily refect those of the Federal Trade Commission or any individual Commissioner. ii Acknowledgments I would like to thank AndrewStivers and Jan Pappalardo for invaluable feedback on numerous revisions of the text, and the BE economists who contributed their thoughts and citations to this paper. iii Table of Contents 1 Introduction 1 2 Search Costs and Match Quality 5 3 Marketing Costs and Ad Volume 6 4 Price Discrimination in Uncompetitive Settings 7 5 Market Segmentation in Competitive Setting 9 6 Consumer Concerns about Data Use 9 7 Conclusion 11 References 13 Appendix 16 iv 1 Introduction The internet has grown to touch a large part of our economic and social lives. This growth has transformed it into an important medium for marketers to serve advertising. -
Monopolistic Competition in General Equilibrium: Beyond the CES Evgeny Zhelobodko, Sergey Kokovin, Mathieu Parenti, Jacques-François Thisse
Monopolistic competition in general equilibrium: Beyond the CES Evgeny Zhelobodko, Sergey Kokovin, Mathieu Parenti, Jacques-François Thisse To cite this version: Evgeny Zhelobodko, Sergey Kokovin, Mathieu Parenti, Jacques-François Thisse. Monopolistic com- petition in general equilibrium: Beyond the CES. 2011. halshs-00566431 HAL Id: halshs-00566431 https://halshs.archives-ouvertes.fr/halshs-00566431 Preprint submitted on 16 Feb 2011 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. WORKING PAPER N° 2011 - 08 Monopolistic competition in general equilibrium: Beyond the CES Evgeny Zhelobodko Sergey Kokovin Mathieu Parenti Jacques-François Thisse JEL Codes: D43, F12, L13 Keywords: monopolistic competition, additive preferences, love for variety, heterogeneous firms PARIS-JOURDAN SCIENCES ECONOMIQUES 48, BD JOURDAN – E.N.S. – 75014 PARIS TÉL. : 33(0) 1 43 13 63 00 – FAX : 33 (0) 1 43 13 63 10 www.pse.ens.fr CENTRE NATIONAL DE LA RECHERCHE SCIENTIFIQUE – ECOLE DES HAUTES ETUDES EN SCIENCES SOCIALES ÉCOLE DES PONTS PARISTECH – ECOLE NORMALE SUPÉRIEURE – INSTITUT NATIONAL DE LA RECHERCHE AGRONOMIQUE Monopolistic Competition in General Equilibrium: Beyond the CES∗ Evgeny Zhelobodko† Sergey Kokovin‡ Mathieu Parenti§ Jacques-François Thisse¶ 13th February 2011 Abstract We propose a general model of monopolistic competition and derive a complete characterization of the market equilibrium using the concept of Relative Love for Variety. -
BIS Working Papers No 136 the Price Level, Relative Prices and Economic Stability: Aspects of the Interwar Debate by David Laidler* Monetary and Economic Department
BIS Working Papers No 136 The price level, relative prices and economic stability: aspects of the interwar debate by David Laidler* Monetary and Economic Department September 2003 * University of Western Ontario Abstract Recent financial instability has called into question the sufficiency of low inflation as a goal for monetary policy. This paper discusses interwar literature bearing on this question. It begins with theories of the cycle based on the quantity theory, and their policy prescription of price stability supported by lender of last resort activities in the event of crises, arguing that their neglect of fluctuations in investment was a weakness. Other approaches are then taken up, particularly Austrian theory, which stressed the banking system’s capacity to generate relative price distortions and forced saving. This theory was discredited by its association with nihilistic policy prescriptions during the Great Depression. Nevertheless, its core insights were worthwhile, and also played an important part in Robertson’s more eclectic account of the cycle. The latter, however, yielded activist policy prescriptions of a sort that were discredited in the postwar period. Whether these now need re-examination, or whether a low-inflation regime, in which the authorities stand ready to resort to vigorous monetary expansion in the aftermath of asset market problems, is adequate to maintain economic stability is still an open question. BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The views expressed in them are those of their authors and not necessarily the views of the BIS. -
Simple Structural Econometrics of Price Elasticity
Simple Structural Econometrics of Price Elasticity Catherine Cazals Fr¶ed¶erique F`eve University of Toulouse University of Toulouse (GREMAQ and IDEI) (GREMAQ and IDEI) Patrick F`eve¤ Jean{Pierre Florens University of Toulouse University of Toulouse (CNRS{GREMAQ and IDEI) (IUF, GREMAQ and IDEI) Abstact The identi¯cation of demand parameters from individual data may be very di±cult due to the lack of price variation. The aim of this paper is to deliver a simple methodology for the treatment of this kind of data. The approach relies on a simple structural model of consumer behavior wherein demand and expenditure depend on a heterogeneity factor. Using the restrictions created by this structural model, we consider the identi¯cation of the price elasticity of demand. We ¯rst show that the structural parameters are not identi¯ed in the one period case. An extension of the model to a two period case allows to identify the structural parameters and thus the price elasticity of demand over periods. Keywords: structural model, heterogeneity factor, identi¯cation, price elasticity JEL Class.: C1, C2, D1 Introduction The identi¯cation of price elasticity from cross section individual data is impossible due to the lack of price variation in the sample. Even if panel data are available, the slow modi¯cation of tari®s and the usual small number of periods make very hazardous the estimation of the price elasticity. The aim of this paper is to present a simple methodology for the treatment of this kind of data and to show that we can take some advantage from ¤Corresponding author: GREMAQ{Universit¶e de Toulouse I, manufacture des Tabacs, b^at. -
THE OECD-WTO BALANCED TRADE in SERVICES DATABASE (BPM6 Edition)
1 THE OECD-WTO BALANCED TRADE IN SERVICES DATABASE (BPM6 edition) Antonella Liberatore (OECD), Steen Wettstein (WTO)1 January 2021 Complete, consistent and balanced bilateral trade in services statistics are vital for the empirical analysis of international trade as well as for policy-making and trade negotiations. Unfortunately, such data are not readily available. This paper presents the work of OECD and WTO to build an updated version of the Balanced Trade in Services (BaTIS) dataset, a complete and consistent trade in services matrix to serve as input for the compilation of the TiVA Inter-Country Input-Output Tables and as a tool for the analysis of trade patterns in general. This second edition of BaTIS provides annual data for 2005-2019, covering 202 economies, broken down by the 12 main EBOPS 2010 service categories. This paper accompanies the dataset and describes its compilation methodology in detail, including the collection and cleaning of the reported data, the different methodologies used to estimate missing information, and the final balancing of the export and import flows. 1 This contribution reflects a description of a methodology and does not represent the position or opinions of OECD, WTO or their respective Members, nor the official position of any staff members. The definition of geographical territories in this report is merely statistical and does not imply an expression of opinion by the OECD or the WTO Secretariat concerning the status of any country or territory, the delimitation of its frontiers, its official name, nor the rights and obligations of any WTO member in respect of WTO agreements. -
Lecture 10 2-18 Outline and Slides 0.Pdf
Economics 2 Professor Christina Romer Spring 2016 Professor David Romer LECTURE 10 INTERNATIONAL TRADE AND TRADE POLICY February 18, 2016 I. OVERVIEW II. REVIEW OF COMPLETE SPECIALIZATION A. Example of the United States and China B. Terms of trade and world prices III. INCOMPLETE SPECIALIZATION A. Changing opportunity cost within each country B. Optimal level of specialization C. Consumption possibilities with trade IV. SUPPLY AND DEMAND ANALYSIS OF INTERNATIONAL TRADE A. Export good B. Import good V. WELFARE AND EMPLOYMENT EFFECTS OF TRADE A. Welfare analysis of trade 1. Export good 2. Import good B. Employment effects of trade VI. TRADE POLICY A. Some definitions B. Effects of a tariff C. Welfare analysis of a tariff D. Possible arguments for protection Economics 2 Christina Romer Spring 2016 David Romer LECTURE 10 International Trade and Trade Policy February 18, 2016 Announcements • Midterm 1 Logistics: • Tuesday, February 23rd, 3:30–5:00 • Sections 102, 104, 107, 108 (GSIs Pablo Muñoz and David Green) go to 245 Li Ka Shing Center (corner of Oxford and Berkeley Way). • Everyone else come to usual room (2050 VLSB). • You do not need a blue book; just a pen. • You also do not need a watch or phone. Announcements (continued) • Collecting the Exams: • If you finish before 4:45, you may quietly pack up and bring your exam to the front. • After 4:45, stay seated. • We will collect all of the exams by passing them to the nearest aisle. • Please don’t get up until all of the exams are collected. • Academic honesty: Behave with integrity. -
Chapter 5 Perfect Competition, Monopoly, and Economic Vs
Chapter Outline Chapter 5 • From Perfect Competition to Perfect Competition, Monopoly • Supply Under Perfect Competition Monopoly, and Economic vs. Normal Profit McGraw -Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw -Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. From Perfect Competition to Picking the Quantity to Maximize Profit Monopoly The Perfectly Competitive Case P • Perfect Competition MC ATC • Monopolistic Competition AVC • Oligopoly P* MR • Monopoly Q* Q Many Competitors McGraw -Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw -Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. Picking the Quantity to Maximize Profit Characteristics of Perfect The Monopoly Case Competition P • a large number of competitors, such that no one firm can influence the price MC • the good a firm sells is indistinguishable ATC from the ones its competitors sell P* AVC • firms have good sales and cost forecasts D • there is no legal or economic barrier to MR its entry into or exit from the market Q* Q No Competitors McGraw -Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw -Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. 1 Monopoly Monopolistic Competition • The sole seller of a good or service. • Monopolistic Competition: a situation in a • Some monopolies are generated market where there are many firms producing similar but not identical goods. because of legal rights (patents and copyrights). • Example : the fast-food industry. McDonald’s has a monopoly on the “Happy Meal” but has • Some monopolies are utilities (gas, much competition in the market to feed kids water, electricity etc.) that result from burgers and fries. -
Lecture Notes1 Mathematical Ecnomics
Lecture Notes1 Mathematical Ecnomics Guoqiang TIAN Department of Economics Texas A&M University College Station, Texas 77843 ([email protected]) This version: August, 2020 1The most materials of this lecture notes are drawn from Chiang’s classic textbook Fundamental Methods of Mathematical Economics, which are used for my teaching and con- venience of my students in class. Please not distribute it to any others. Contents 1 The Nature of Mathematical Economics 1 1.1 Economics and Mathematical Economics . 1 1.2 Advantages of Mathematical Approach . 3 2 Economic Models 5 2.1 Ingredients of a Mathematical Model . 5 2.2 The Real-Number System . 5 2.3 The Concept of Sets . 6 2.4 Relations and Functions . 9 2.5 Types of Function . 11 2.6 Functions of Two or More Independent Variables . 12 2.7 Levels of Generality . 13 3 Equilibrium Analysis in Economics 15 3.1 The Meaning of Equilibrium . 15 3.2 Partial Market Equilibrium - A Linear Model . 16 3.3 Partial Market Equilibrium - A Nonlinear Model . 18 3.4 General Market Equilibrium . 19 3.5 Equilibrium in National-Income Analysis . 23 4 Linear Models and Matrix Algebra 25 4.1 Matrix and Vectors . 26 i ii CONTENTS 4.2 Matrix Operations . 29 4.3 Linear Dependance of Vectors . 32 4.4 Commutative, Associative, and Distributive Laws . 33 4.5 Identity Matrices and Null Matrices . 34 4.6 Transposes and Inverses . 36 5 Linear Models and Matrix Algebra (Continued) 41 5.1 Conditions for Nonsingularity of a Matrix . 41 5.2 Test of Nonsingularity by Use of Determinant . -
GLOSSARY of INTERNATIONAL TRADE TERMS 2016 Guide
CALIFORNIA FASHION ASSOCIATION 444 South Flower Street, 37th Floor · Los Angeles, CA 90071 ·ph. 213.688.6288 ·fax 213.688.6290 Email: [email protected] Website: www.californiafashionassociation.org GLOSSARY OF INTERNATIONAL TRADE TERMS 2016 Guide Sponsored By: Prepared by: CALIFORNIA FASHION ASSOCIATION 444 South Flower Street, 37th Floor, Los Angeles, CA 90071 Phone: 213-688-6288, Fax: 213-688-6290 [email protected] | www.californiafashionassociation.org 1 CALIFORNIA FASHION ASSOCIATION 444 South Flower Street, 37th Floor · Los Angeles, CA 90071 ·ph. 213.688.6288 ·fax 213.688.6290 Email: [email protected] Website: www.californiafashionassociation.org THE VOICE OF THE CALIFORNIA INDUSTRY The California Fashion Association is the forum organized to address the issues of concern to our industry. Manufacturers, contractors, suppliers, educational institutions, allied associations and all apparel-related businesses benefit. Fashion is the largest manufacturing sector in Southern California. Nearly 13,548 firms are involved in fashion-related businesses in Los Angeles and Orange County; it is a $49.3-billion industry. The apparel and textile industry of the region employs approximately 128,148 people, directly and indirectly in Los Angeles and surrounding counties. The California Fashion Association is the clearinghouse for information and representation. We are a collective voice focused on the industry's continued growth, prosperity and competitive advantage, directed toward the promotion of global recognition for the "Created in California" -
Adam Smith 1723 – 1790 He Describes the General Harmony Of
Adam Smith 1723 – 1790 He describes the general harmony of human motives and activities under a beneficent Providence, and the general theme of “the invisible hand” promoting the harmony of interests. The invisible hand: There are two important features of Smith’s concept of the “invisible hand”. First, Smith was not advocating a social policy (that people should act in their own self interest), but rather was describing an observed economic reality (that people do act in their own interest). Second, Smith was not claiming that all self-interest has beneficial effects on the community. He did not argue that self-interest is always good; he merely argued against the view that self- interest is necessarily bad. It is worth noting that, upon his death, Smith left much of his personal wealth to churches and charities. On another level, though, the “invisible hand” refers to the ability of the market to correct for seemingly disastrous situations with no intervention on the part of government or other organizations (although Smith did not, himself, use the term with this meaning in mind). For example, Smith says, if a product shortage were to occur, that product’s price in the market would rise, creating incentive for its production and a reduction in its consumption, eventually curing the shortage. The increased competition among manufacturers and increased supply would also lower the price of the product to its production cost plus a small profit, the “natural price.” Smith believed that while human motives are often selfish and greedy, the competition in the free market would tend to benefit society as a whole anyway. -
Cryptocurrency: the Economics of Money and Selected Policy Issues
Cryptocurrency: The Economics of Money and Selected Policy Issues Updated April 9, 2020 Congressional Research Service https://crsreports.congress.gov R45427 SUMMARY R45427 Cryptocurrency: The Economics of Money and April 9, 2020 Selected Policy Issues David W. Perkins Cryptocurrencies are digital money in electronic payment systems that generally do not require Specialist in government backing or the involvement of an intermediary, such as a bank. Instead, users of the Macroeconomic Policy system validate payments using certain protocols. Since the 2008 invention of the first cryptocurrency, Bitcoin, cryptocurrencies have proliferated. In recent years, they experienced a rapid increase and subsequent decrease in value. One estimate found that, as of March 2020, there were more than 5,100 different cryptocurrencies worth about $231 billion. Given this rapid growth and volatility, cryptocurrencies have drawn the attention of the public and policymakers. A particularly notable feature of cryptocurrencies is their potential to act as an alternative form of money. Historically, money has either had intrinsic value or derived value from government decree. Using money electronically generally has involved using the private ledgers and systems of at least one trusted intermediary. Cryptocurrencies, by contrast, generally employ user agreement, a network of users, and cryptographic protocols to achieve valid transfers of value. Cryptocurrency users typically use a pseudonymous address to identify each other and a passcode or private key to make changes to a public ledger in order to transfer value between accounts. Other computers in the network validate these transfers. Through this use of blockchain technology, cryptocurrency systems protect their public ledgers of accounts against manipulation, so that users can only send cryptocurrency to which they have access, thus allowing users to make valid transfers without a centralized, trusted intermediary. -
1 Three Essential Questions of Production
Three Essential Questions of Production ~ Economic Understandings SS7E5a Name_______________________________________Date__________________________________ Class 1 2 3 4 Traditional Economies Command Economies Market Economies Mixed Economies What is In this type of In a command economy, the In a market economy, the Nearly all economies in produced? economic system, what central government decides wants of the consumers and the world today have is produced is based on what goods and services will the profit motive of the characteristics of both custom and the habit be produced, what wages will producers will decide what market and command of how such decisions be paid to workers, what will be produced. A.K.A. economic systems. were made in the past. jobs the workers do, as well Free-enterprise, Laisse- as the prices of goods. faire & capitalism. This means that most How is it The methods of In a command economy, no Labor (the workers) and countries have produced? production are one can start their own management (the characteristics of a primitive. Bartering, or business. bosses/owners) together free market/free a system of trading in The government determines will determine how goods enterprise as well as goods and services, how and where the goods will be produced in a market some government replaces currency in a produced would be sold. economy. planning and control. traditional economy. For whom is The primary group for In a command economy, the In a market economy, each it produced? whom goods and government determines how production resource is paid services are produced the goods and services are based on what is in a traditional economy distributed.