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68A q-theory for the housing market
The well known q-theory aims to explain the connection between investment and stock market prices. Higher stock market prices cause higher investment as new investment is valued equally high on the markets and firms are trying to maximize...
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78German Political Parties | An overview
Currently, there are five main political parties in Germany. Germany has a multi-party system that differs somewhat from the e.g. the U.S. system where the essential choice is between the two major parties. In order to be represented in German...
2 comments74Carry Trade | Explained in simple words
The most common notion of carry trades is the one of currency carry trades. It describes an investment strategy that tries to exploit global differences in bond yields and credit interest rates. Carry trades...
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69The IGARCH model
IGARCH means Integrated Generalized Autoregressive Conditional Heteroskedasticity and is a special form of the more general GARCH (Generalized Autoregressive Conditional Heteroskedasticity) model. In order to understand the IGARCH model, it...
2 comments77Exponential General Autoregressive Conditional Heteroskedasticity-EGARCH
EGARCH means Exponential General Autoregressive Conditional Heteroskedasticity and is an empirical approach mostly used in financial modeling. It is often not sufficient to model the first moment (the mean) of a financial time series. The reason is...
1 comment82The trade union model of wage setting and unemployment
Similar to the efficiency wage theory, the trade union model illustrates why wages are not set in terms of a traditional supply-and-demand process. The trade union model explains the so called stylized fact...
0 comments76No-shirking model | What is it?
The no-shirking model is a labor market theory that is part of the efficiency wage theory and tries to explain why wages are higher than a traditional supply-and-demand analysis would suggest. Whereas the number of people employed changes quite a...
5 comments72Efficiency wages | What is it?
The term efficiency wages describes a labor market theory that tries to explain the real-world observation of wage development. Although the economy fluctuates considerably over time, real wages do not...
0 comments83Trade surpluses and trade deficits | Why are they dangerous?
Generally, it is often assumed that a trade surplus is good for a country whereas a trade deficit is bad. This should be better put into context and sound something like: Trade imbalances are always negative...
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