Mathematics For Economists

When considering the great economists of the last 100 years we find that many were trained as mathematicians - Alfred Marshall, William Stanley Jevons, Irvin Fisher, John Maynard Keynes. Other combined the study of economics with logic - John Stuart Mill, John Neville Keynes.

Between 1976 and 1979 I had the good fortune to study economics under Professor Dunning at Reading University. Whilst there a small part of the undergraduate course lectures included a course called "mathematical economics". This was presented by Mark Casson who at the time was a lecturer in economics at Reading University. I still have a copy of his book MATHEMATICAL ECONOMICS (copyrights 1973). This book forms the template of the 1st part of this article, that is to `develop a variety of applications to immediate questions of economic policy` . An emphasis of quantitative thinking in applied economics.

He was aided in the development of the book by Professor Hart my seminar leader for quantitative method development whilst an undergraduate. Also Professor Peston of Queen Mary`s University (I believe).

HOW IS MATHEMATICS USEFUL TO ECONOMICS and ECONOMISTS ?

THE USE OF PURE MATHEMATICS : The vocabulary of mathematics is precise and free from misleading connotations unlike ordinary language, Mr Casson uses the example of `equilibrium` to illustrate.

The language of mathematics simplifies presentation and understanding of complicated arguments.

`Economic Man` is a mathematician - much economic theory is based upon the hypothesis that individuals behave rationally.

THE USE OF APPLIED MATHEMATICS : This method evolved mainly for analysing relations between quantities with numeric values, for example price, output, employment, income, balance of trade.

Mathematics can be used to summarize and interpret economic and social statistics. More advanced mathematics is used in econometric theory and operational analysis.

Mathematics is increasingly used to solve economic problems in commerce, government and industry.

TYPES of ELEMENTARY MATHEMATICS USEFUL IN ECONOMICS : NUMBERS, VARIABLES and their notation, ABSOLUTE VALUES, SUMS, POWERS and ROOTS, FUNCTIONS, GRAPHS, CONTINUITY, SOLUTION of EQUATIONS, GEOMETRIC SERIES, LIMITS.

CONCEPTUAL DEVELOPMENT IN MACRO/MICRO ECONOMICS using ELEMENTARY MATHEMATICS these include : static and dynamic economic analysis modelling. Equilibrium - Stationary states - comparative static analysis - dynamic analysis - stability - economic models for rational policy making eg differential equations.

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