What are the popular/very useful mathematical models for principles in economics?

In summary, in the study of economics, there are numerous mathematical models used to describe and predict various "laws" in the field. Some popular and useful equations include demand/supply, profit maximization, indifference curves, and utility function in microeconomics, as well as the classic macroeconomic model, Keynesian cross, and intertemporal decisions in macroeconomics. Other intermediate topics include duality in consumer theory, comparative statics, and decisions under uncertainty. These models and equations are often found in textbooks such as Mas-Colell, Whinston, and Green's Microeconomic Theory and are important for understanding the foundations of economics.
  • #1
27Thousand
109
0
I have a question for those who are cognisant with the study of economics. I've heard in economic classes they teach all sorts of mathematical models to describe/predict all the "laws" in the field, or at least approximations. I'm trying to hunt down the popular and useful economics mathematical equations (I haven't taken an economics class before, but am very curious about the popular models). For those who are familiar with these economic mathematical models, mind sharing the knowledge with da PhysicsForums buddies? :smile:

I like conceptualizing cause-effect systems ideas.
 
Mathematics news on Phys.org
  • #2
There are a lot of them, especially in microeconomics. I would suggest Mas-Colell, Whinston, and Green', Microeconomic Theory. It lays out the mathematical justification for the foundations of microeconomic.

For macroeconomics, its a bit more varied, and all depends on what you are looking at and to whom you are talking.
 
  • #3
Here are some of the basic ones with pretty graphics

Microeconomics:

demand/supply
profit maximization
indifference curves & budget constraint
utility function
Edgeworth's box

Macroeconomics:

the classic macroeconomic model
Keynes: the Keynesian cross, IS-LM, Mundell-Fleming model
intertemportal decisions: Modigliani's life cycle, random walk, labor demand

My teacher's all-time fave: Slutsky's equation! (best name ever)

∂x/∂p=∂h/∂p-x*(∂x/∂Y)

edit: here are a few more, less model-y, intermediate topics. the ones above still depend on math but are meant to be a little more conceptual, the following depend more on mathematical treatment

duality in consumer theory
comparative statics
decisions under uncertainty
 
Last edited:

Related to What are the popular/very useful mathematical models for principles in economics?

What are the popular/very useful mathematical models for principles in economics?

1. What is the difference between microeconomics and macroeconomics?Microeconomics focuses on individual economic agents such as households and firms, while macroeconomics looks at the economy as a whole.2. What are supply and demand curves?Supply and demand curves are graphical representations of the relationship between the quantity of a good or service that producers are willing to offer and the quantity that consumers are willing to buy at various prices.3. How does the production possibility frontier (PPF) model work?The PPF model shows the maximum output of two goods that can be produced with limited resources and technology. It illustrates the concept of opportunity cost and the trade-offs that occur between producing different goods.4. What is the Keynesian cross model?The Keynesian cross model is a macroeconomic model that shows the relationship between aggregate income and spending in an economy. It is based on the idea that spending drives economic growth and that government intervention can stabilize the economy during recessions.5. How is game theory used in economics?Game theory is used to analyze strategic decision-making in situations where the outcome of one agent's choice depends on the choices of others. It is commonly used in areas such as oligopoly and bargaining to predict the behavior of individuals and firms in competitive situations.

Similar threads

Replies
11
Views
2K
Replies
2
Views
160
  • General Math
Replies
22
Views
3K
Replies
15
Views
4K
Replies
4
Views
5K
  • STEM Educators and Teaching
Replies
4
Views
2K
  • STEM Educators and Teaching
2
Replies
65
Views
9K
  • General Math
Replies
2
Views
3K
Replies
23
Views
3K
  • STEM Academic Advising
Replies
15
Views
2K
Back
Top