# Tag Info

Accepted

### Fundamental equations in economics

Instead of proposing specific equations, I will point to two concepts that lead to specific equations for specific theoretical set ups: A) Equilibrium The most fundamental and the most misunderstood ...
• 31.9k
Accepted

### Criticism of Math in Economics

I find that the essay "The New Astrology" by Alan Jay Levinovitz (an assistant professor of philosophy and religion, not an economist) makes some good points. ...the ubiquity of mathematical theory ...
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### Fundamental equations in economics

As has already been said, the MOST fundamental equation is surely: $$\text{MB}=\text{MC}$$ EDIT: This equation is fundamental in terms of the way economists think. As pointed out in the comments ...
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### Criticism of Math in Economics

What is a reason to be against mathematics in economics? The danger that any tool creates: to impose itself on the tool-user, diluting and narrowing its view of the world. It is a matter of Human ...
• 31.9k
Accepted

### How can I obtain Leontief and Cobb-Douglas production function from CES function?

The proofs I will present are based on techniques relevant to the fact that the CES production function has the form of a generalized weighted mean. This was used in the original paper where the CES ...
• 31.9k

### Criticism of Math in Economics

I would like to point out that the question is not whether we should have math in economics, but why some people attack mathematical economics. A lot of the recent answers seem to try to answer the ...
• 26.7k

### Fundamental equations in economics

Most of intro econ is intersecting lines. Specifically, $$MB = MC$$ * Equilibrium is achieved when Marginal Benefit is equal to Marginal Cost* $$\dfrac{MU_x}{p_x}=\dfrac{MU_y}{p_y}.$$ Marginal Utility ...
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### The Unreasonable Ineffectiveness of Mathematics in Economics

I think by today the arguments you mention are completely outdated. Nowadays, using combination of psychometry and econometrics companies can predict whether you are pregnant (from your shopping ...
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### 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 ...
• 9,155

### Criticism of Math in Economics

I think there are two important criticisms or limitations. Limit 1: The first, overlapping with what many others have said, is that all mathematic economics are reduced-order models of very highly ...
• 321

### Fundamental equations in economics

I think one of the most important equations (at least within macroeconomics) is: $$E\left[ m R \right] = 1$$ This equation has been used to derive many foundational results. This equation motivated ...
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### Fundamental equations in economics

Although I agree with Jyotirmoy Bhattacharya that the most interesting ideas in economics are not always best expressed through equations, I still want to mention the Slutsky or compensated law of ...

### Is complex analysis used in economics?

It should be pointed out that just because one encounters complex numbers does not mean one is doing "complex analysis", e.g. complex eigenvalues, complex Borel measures, Fourier transforms, etc. ...
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The regular method of obtaining Cobb-Douglas and Leotief is L'Hôpital's rule. Another methods should be used too. Setting $\gamma=1$ will be return $Q=[a K^{-\rho} +(1-a) L^{-\rho} ]^{-\frac{1}{\... • 713 16 votes Accepted ### What is the point of all the models in an economics degree? Models are more than just math. Model is a simplification of a reality that allows you to study the underlying mechanisms. Models do not need to be mathematical. Many people actually create models ... • 43.5k 16 votes Accepted ### Conventions for reading mathematically rigorous academic articles in economics Welcome to Economics Stack Exchange elasticity6565. I was asking myself the same question as an undergrad and found that others struggle with this as well. I am now at the end of my masters degree and ... 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 "... • 9,155 15 votes Accepted ### Applications of Trig functions in Economics? The main property of trig functions is their cyclicality. Then one would think that they could be ideal in time series analysis, to model "fluctuations around a trend". I believe that the reasons they ... • 31.9k 14 votes ### Criticism of Math in Economics I think that the opposition to mathematics in Economics mainly has to do with the obstacles it poses to indoctrination. A proposition expressed in terms of a mathematical/logic system is susceptible ... • 1,725 13 votes Accepted ### Topological concepts in economic theory I strongly suspect that an emerging important area for applications of measure theory will be in approximate dynamic programming techniques. Approximate dynamic programming (aka "reinforcement ... • 1,048 13 votes ### Fundamental equations in economics I don't think there are any economics equations with the same status as, say, Maxwell's equations in physics. In its place we have concepts like the equimarginal principle, competitive equilibrium or ... 13 votes ### Is there any economic meaning to log returns? Take the 1st order Taylor series the function$log(x)$. around one: $$log(x) \approx log(1) + \frac{x-1}{1} = x-1$$ Therefore, for a random variable r that is close to zero: $$log(1+r) \approx r$$ ... • 15.9k 13 votes ### Applications of Trig functions in Economics? A natural application of trigonometric functions is in the analysis of spatial data. An example is the Weber problem in location theory - finding the point which minimises the sum of transport costs ... • 7,270 13 votes ### Criticism of Math in Economics "All models are wrong; some are useful." The title is really all one needs, but to put a few more words behind it, mathematics is very good at deriving detailed results from very specific premises. ... • 481 11 votes ### Why not talk about utility functions on the surreal line when preferences are lexicographic, etc? The first thing that comes to mind is that some economic models have more than one agent. If one agent has a utility function with values in${\mathbb R}$, then two agents have a pair of utility ... • 1,513 11 votes Accepted ### Uses of convex analysis in Economics A partial answer: convex analysis is extensively used in axiomatic decision theory, at least in its recent developments. Most of these papers focus on individual behavior. You can have a look for ... • 3,202 11 votes Accepted ### Economic theory journals for a refinement theorem about utility function representation For theory you have in order of prestige... (I know subjective) Journal of Economic Theory Theoretical Economics AEJ-Micro (only micro) Mathematics of Operations Research (OR related) Games and ... • 8,642 11 votes ### What it is a utility function that it is quasi-concave but not concave? If you have a single good, so that your commodity space is$\mathbb{R}\$, then every increasing function is quasi-concave and even strictly quasi-concave. So any non-concave but increasing function ...
A bit late to the game, but I'm surprised no one has named the equation to calculate OLS estimates: $$\hat\beta=(X'X)^{-1}X'y$$