DSE 2012 paper discussion-Please join

[Shefali]

For 58-60 these int parity and all...where to study this from...blanchard??

[Akshay Jain]

the macro questions 51-60 of this ppr are from blanchard's book vd little bit of modifications.......that is vy I included this book in the study guide......

[Shefali]

Thanxx akshay and what abt salvatore as u mentioned in modified study material...pls tell me which chps fr it

[Akshay Jain]

Ok the specific chapters of salvatore I will post by evening in "study guide modification" thread

[Akshay Jain]

acc. to blanchard an appreciation(increase) of domestic currency leads to an increase in the domestic rate of interest (di/dE=expected E/e^2 which is positive) this is because an increase in the domestic i will increase capital inflows nd thus will appreciate domestic currency.
I m not getting what DSE has done in this question.....
Acc to blanchard also the IS curve shud be negetively sloped in Y,e space but they hav given the ans as positively sloped schedule and the LM curve in Y,e space shud have a positive slope but thay hav given negetive slope as ans coz of there interest parity condition.....

[Akshay Jain]

acc. to blanchard an appreciation(increase) of domestic currency leads to an increase in the domestic rate of interest (di/dE=expected E/e^2 which is positive) this is because an increase in the domestic i will increase capital inflows nd thus will appreciate domestic currency.
I m not getting what DSE has done in this question.....
Acc to blanchard also the IS curve shud be negetively sloped in Y,e space but they hav given the ans as positively sloped schedule and the LM curve in Y,e space shud have a positive slope but thay hav given negetive slope as ans coz of there interest parity condition.....

[kangkan]

@akshay..this is what i 've done for 59.

Since,the marshall lerner condition syas that trade balance shud decrease following real appreciation, dt/de<0

For the given question(58), dt/de =-(x2-m1Y/e^2)

For the interest parity part,

r=r*+(e'-e)/e

Subtituing in the LM equation, we get

l2e'/e=l1*yl2*r*-l2-M

=>l2 e'/e=l1*Y- some constant

This will be negatively sloped irrespective of the marhsall lerner condition derived above

I dont know if this is right :(

[Dreyfus]

Well that's OK u r getting the downward sloping schedule...but what matters is the eq of interest parity condition given wrong in the question.
Not only this in q58 if according to dse's answer key if Marshall Lerner condition satisfied the depriciation of home currency must improve trade ie dNX/de <0 as when e decreases home currency gets depriciate
But according to answer key de/dy>0 which implies that dNX/de>0 as de/dy can be expressed as (de/dNX)*(dNX/dy) and dNX/dy =1. This means that appreciation of home currency is improving trade balance!

[kangkan]

yes...its a very strange closed economy

[sonal dhawan]

heyy if the playe gets 20 then prob of getting a no. more than 20 is more than the prob of getting a no. less than 20.......so in this case wouldn't the player choose swap as an option???

[sarawagisruti]

Hi Akshay,

Can you please explain Gini Coefficient in general.. I read it but could not understand a word. Also i tried using the formula in this question but could not solve it.. could you please explain it once

Consider a society in which half the population earns
100 rupees per day and the other half earns 200 rupees per day. The Gini
coeffcient of inequality for this society is given by
(a) 1/2
(b) 1/3
(c) 1/6
(d) 1/8

An econometrician uses data from the Consumer Expen-
diture Survey conducted by the National Sample Survey Organization for the
years 1991 and 2001 and plots the cumulative distribution function for real
consumer expenditure per capita for these years. He nds that cumulative
distribution function for 2001 is everywhere to the right of that for 1991.
Consider the following,
Conclusion 1: The Gini coeffcient for 2001 is higher than for 1991
Conclusion 2: Consumption expenditure of every individual has increased in
2001 compared to 1991
Conclusion 3: Real consumption expenditure per capita has increased in 2001
compared to 1991
Which of the above conclusions are correct
(a) Only (iii) is correct
(b) (i) and (iii) are correct
(c) (ii) and (iii) are correct
(d) None of the conclusions is correct

[Akshay Jain]

hi sarawagisruti
Gini coefficient can also be calculated like this if u dont no the formula

[sarawagisruti]

thank you so much akshay..

[Akshay Jain]

Welcome

[econ14]

plz help! QUESTION 37. chi square one............

[Akshay Jain]

its a direct formula...u cn find easily in any stats book.....

[econ14]

ok thanx i got it..
@Akshay plz suggest i am a bit struggling with ecotrix i am using essentials of ecotrix (gujarati).plz suggest how to handle

[SoniaKapoor]

@sandeep ...it doesnt matter which book u use ...essentials of etx or basic ext...both books are replica of each other..main is read the book nicely..they can ask anything.

[SoniaKapoor]

Another good book is Introductory etx by Wooldridge..its quite good

[econ14]

thanx sonia