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Mathematical Methods of Economics

This course provides a formal introduction to mathematical concepts and tools used in economics. It covers topics such as real analysis, linear algebra, calculus of several variables, difference and differential equations, and static optimization. The course aims to equip students with mathematics that can be applied in different fields of economics. It is taught by Mandira Sarma and will include a mid-term and final exam for evaluation.

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Naveen Garg
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325 views

Mathematical Methods of Economics

This course provides a formal introduction to mathematical concepts and tools used in economics. It covers topics such as real analysis, linear algebra, calculus of several variables, difference and differential equations, and static optimization. The course aims to equip students with mathematics that can be applied in different fields of economics. It is taught by Mandira Sarma and will include a mid-term and final exam for evaluation.

Uploaded by

Naveen Garg
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PDF, TXT or read online on Scribd
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Course: Mathematical Methods of Economics Course No.

IE 404 Instructor: Mandira Sarma Course Credit: 4

(A compulsory course for MA Economics in CITD, JNU) This course provides a formal exposure to mathematical concepts and tools used in economics, aiming to train and equip students to pursue studies in different fields of economics where mathematics may be useful and handy. (Credits: 4.00) Course Instructor for Monsoon 2012 semester Mandira Sarma, Room No. 032, SIS; Email: <[email protected]> and <[email protected]> Course outline I. Real Analysis Introduction to set theory; the real number system interval, smallest upper bound and largest lower bound, maximum and minimum; neighbourhoods closed and open sets, bounded sets, compact sets, convex set; sequences; functions, limit and continuity; concavity, convexity, quasiconcavity, quasiconcavity; mean value theorems; fixed point theorem, differentiation and integration reviews of basic concepts. II. Linear Algebra - Matrices and vectors; subspaces; systems of equations; eigenvalues and eigenvectors; quadratic forms. III.Calculus of Several variables Open, closed and compact sets, functions of several variables, partial derivatives, Youngs theorem, curvature properties, directional derivatives. IV. Difference and Differential equations Difference equations basic concepts; linear first order and second order equations with constant coefficients; Analysis of stability of equilibria in two dimensional systems; extension to n-dimensional systems. Differential equations ordinary differential equations of the first order basic concepts, solving some simple types of equations; Linear equations of

second order with constant coefficient basic concepts extended to ordinary differential equations of nth order; homogeneous and nonhomogeneous equations; systems of ordinary differential equations of the first order basic ideas, autonomous and non-autonomous systems, equilibrium and stability, phase paths and phase diagrams; two dimensional linear homogeneous systems with constant coefficients, stability of equilibria in general two-dimensional autonomous systems, extension of the analysis to local stability to n-dimensional systems. V. Static Optimisation Optimization without constraints, optimization with equality constraints, optimization with inequality constraints, the KuhnTucker Theorem; comparative statics Envelope theorems Reading list: I will be mainly following chapters from the following books: Mathematics for Economists by Carl P. Simon and Lawrence Blume, Viva Books, 2006. Apart from the above, following additional subject specific books will be consulted 1. Mathematical Analysis by Binmore, K. (1999), Cambridge University Press (Topic I) 2. Linear Algebra by Hadley, G (1993), Narosa Publishing House (For Topic II) 3. Econometric Analysis by Green (For Topic II) 4. Mathematical Methods and Models in Economic Dynamics by Gandolfo, G. (1971), North-Holland (Topic IV) 5. A First Course in Optimisation Theory by Rangarajan K. Sundaram (1996), Cambridge University Press (Topic V) Evaluation: Evaluation of students will be based on a mid- term examination and a final examination.

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