# Questions tagged [mathematical-economics]

The application of mathematical methods to represent theories and analyze problems in economics.

877 questions
Filter by
Sorted by
Tagged with
25 views

### Calculus in intermediate economics?

What are the best online resource on learning the Calculus used in college-level intermediate economics? Where can I find lots of problem sets and practice exams with solutions/explanations online for ...
1 vote
22 views

### Convergence of various forms of Prospect Theory?

I'm not a mathematician but it seems that my problem is a rather technical than an economic one, but i hope this is still the right audience. My problem is the following: I want to analyse the effects ...
• 253
1 vote
11 views

### Why is the internal rate of return decreasing while the profit per unit of real gross value added is increasing?

I made a graph based on data from the Penn World Table showing that the internal rate of return has been decreasing over time in the US and the rest of the G7 (even more if you exclude Germany, whose ...
• 11
23 views

### Why is the consumption function concave?

I'm reading the topic concavity in risk aversion utility function of consumption function. I'm having trouble understanding why the consumption function is assumed to be concave. I tried looking but ...
• 1
39 views

### Dynamic Information Provision model setup - It generalizes Dirk Bergemann and Stephen Morris

The following model setup is from the paper Dynamic Information Provision: Rewarding the Past and Guiding the Future by Ian Ball. It generalizes both the ideas of strategic information transmission of ...
40 views

### What does L mean in the money demand equation?

(M/P)^d=L(i,Y) M=Money supply P=Price d=Demand i=Nominal interest rate Y=?Output Does L mean liquidity? Or does it simply mean that the LHS depends on i and Y? Thank you!
• 19
1 vote
33 views

• 389
29 views

### Hemi-continuity of demand and supply correspondence

Suppose a scenario in which the production set of each firm is compact and convex. How can we prove that each firm's profit function is continuous and supply correspondence can be proved to be upper ...
• 1
20 views

### Modeling adverse and extreme scenario

I am trying to find a simple way to forecast adverse and extreme scenario for GDP, inflation and other variables. I have the baseline projections. Could you propose some very simple models or ...
3k views

### The Unreasonable Ineffectiveness of Mathematics in Economics

In 1960, the physicist Eugene Wigner wrote the article "The Unreasonable Effectiveness of Mathematics in the Natural Sciences" explaining how unexpected it is that mathematical formalism can ...
• 288
12 views

### Is it possible to find missing indices using just a given indices data of some year? The question seem confusing. Try this!

I have been grappling with this question, and I think there is some missing parameter, I would deeply appreciate it if just anyone can wrap their heads around this. Thanks in advance. Index numbers ...
1 vote
203 views

### Why should time-subscript notation be avoided in Bellman equations?

when I learned Bellman equations for macro, my lecturers were pretty loose about notation and switched between recursive and time-series notation. However, Prof Ben Moll says in his slides on Slide 15 ...
• 15
1 vote
93 views

### A derivative with respect to Euclidean distance?

I have a utility function $u(x,z)$ from $\mathbb{R}_+$ to $\mathbb{R_+}$, where $x,z \in \mathbb{R}_+$. I would like to turn the following statement into math: "the utility function $u$ is ...
• 389
38 views

• 76
77 views

### Solve Value Function Analytically

The context is the Schumpeterian growth model with incumbent innovation (see Aghion, Akcigit, Howitt 2014 Handbook of economic growth): the value function is  r V_{t}(n)-\dot{V}_{t}(n)=\max _{z_{i} \...
• 2,239
108 views

### Average Discounted Payoffs in Continuous Time

While reading some theory papers that model a continuous time problem, I have noticed the way they represent the expression for average discounted payoff is of this form, where $r> 0$ is the ...
• 33
16 views

### How do I calculate ROI if a cash flow is given?

In the image in the link below you see a cashflow. I wanted to calculate the ROI manually from this cashflow, but I don't seem to get it right. The program which also generates this cashflow gives me ...
99 views

### Do practicing economists actually use complex mathematics, or is it just a thinking tool?

I'm currently undertaking postgraduate theory units in microeconomics and macroeconomics for the first time and it seems like I am supposed to turn into an applied mathematician, not an economist. I ...
• 389
1 vote
37 views

### Fundamental knowledge about invest, stock and economics for self learning [closed]

I am not expertised in the field of economics and stock so I do not know anything about invest. Would anyone please recommend any book/textbook for the initial leaner to get understanding of all these ...
• 11
38 views

### What would be some of the most basic and universal economic principles (independent of the school of economic thought)?

Comparing the principles of the neoclassical, Keynesian, neo-Keynesian, post-Keynesian and other schools, it is difficult to see a consensus on certain universal principles. There are ideas and ...
• 288
44 views

### Can someone please explain this housing prices equation?

Can someone please explain to me the following formula from this paper ? It's on the end of page 16 and the beginning of page 17. I don't know if it is asking too much, but I am looking at these ...
1k views

### Conventions for reading mathematically rigorous academic articles in economics

How would an informed reader typically go about reading a mathematically rigorous academic article in economics, with lots of notations, assumptions and postulations (e.g, a typical article published ...
• 389
I want to make a function that states consumer $i's$ consumption $C_i$ in a shared bundle $X^n$ $\subset$ $\mathbb R^n$ depends on their preferences. That is, something like $C_i(\succeq_i)$. Since \$\...