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The application of mathematical methods to represent theories and analyze problems in economics.
2
votes
Is complex analysis used in economics?
As described in the comments, you could maybe count instances in probability theory, econometrics, PDEs, or numerical analysis. But in general, besides using trivial properties of complex numbers (as …
15
votes
Accepted
Use of mathematics and imprecise definition of terms
Edesess is attacking what is really just a straw man of economics. I'm not sure he really understands the field. To start, economics is not math. We're not claiming that it is. It's more of an "applie …
3
votes
For linear quadratic approximation of RBC model, why does matrix $P$ of value function $V = ...
P being negative semi-definite would imply that V is a concave function. The reason you would restrict P so that V would be a concave function is because of some of the assumptions you've made about a …
4
votes
Compute evolution of a distribution over time
Here's my best guess. I haven't checked to thoroughly if this is right, but maybe it will help.
Evolution of population density
I understand the model as follows. $f(a,t)$
is the density of people o …
1
vote
Accepted
Total Derivative and Composition
$\newcommand{\pd}[2]{\frac{\partial #1}{\partial #2}}
\newcommand{\dd}{\, \mathrm{d}}$
How many arguments does $C$ have? If the only argument to $C$ is $Y_D$, then $C_Y$ and $C_\tau$ might not make se …
4
votes
Accepted
Mathematical derivation of the Production Possibility Frontier
The question is broad, but I believe there is plenty of literature that defines this concept in similarly broad terms.
The following is adapted from the Wikipedia on Pareto Efficiency,
which is the ma …
1
vote
The relation between the Black-Scholes model and quantum mechanics
I have more often heard of how the Black-Scholes equation is just the heat equation. You can find that information here. I haven't heard of a relationship between Black-Scholes and quantum mechanics b …
0
votes
Simulating a Hamilton-Jacobi-Bellman
Once you have solved the equation $\rho V(k) = \max_c g(c) + V'(k)(z - c)$
to find the function $V(k)$ you should be able to solve for what is called the policy function. The function $V(k)$ is the va …
6
votes
Is there a way to link Berge's theorem of maximum to Envelope theorem?
They are related and usually fall into the same discussion, but as @Alecos mentions in the comments, the two theorems show different things.
I suppose the connection that you're after is the fact tha …
23
votes
Fundamental equations in economics
I once heard Roger Myerson talk about why he thought Economics has, as a Social Science, been so successful in applying (or has so readily incorporated) mathematics. He suggested that perhaps it was d …
2
votes
Mathematical open problems that (when answered) might unlock MAJOR mathematical (micro)econo...
A lot of mathematicians and, here, computer scientists study open problems in game theory. Here is an article that talks about the potential solution of an open problem in mechanism design: http://new …
6
votes
Complete Markets in Continuous Time
I've been meaning to post this for a long time. I came across this and thought it could add some insight. This example is from "Financial Asset Pricing Theory" by Munk.
Consider the following figure. …
3
votes
When can one safely talk about decreasing marginal utility?
The fact that you ask about "safety" implies that you believe that some result is in jeopardy. This answer can be improved if you can specify a result that you might have in mind. Otherwise, take as a …