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the.cookie.monster

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(edited 11 years ago)

Original post by the.cookie.monster

I am considering applying for economics this Autumn, and most of the courses I'm considering are fairly maths-intensive. I was wondering if anyone could give me examples of how the maths is applied to real life situations?

Also can anyone suggest any books which introduces maths/econometrics at a standard that an A Level student could understand?

Thanks ^__^

http://www.amazon.co.uk/Fundamental-Methods-Mathematical-Economics-Chiang/dp/0071238239/ref=sr_1_1?ie=UTF8&qid=1341160658&sr=8-1

Reply 2

abcdefghijklmnopqrstuvwxyz

its basically just used for finding optimising points. makes sense for a study of how best to use limited resources

nobody can give you a "real life" situation as such because economics is basically a load of ****ing theoretic situations so just take the plunge imo lol

Reply 3

danny111

Original post by abcdefghijklmnopqrstuvwxyz

This is the attitude I have, too, but it is not true.

Game Theory is applied to many a real-life situation.

Even your BS optimising is applied - we had a professor talk about his work with Indian companies and he said this one company he worked with grew much faster and better than others, after they started estimating their demand.

And then there are of course all the macro models. They may not be 100% accurate, but go to any Central Bank and see what kind of models they run.

You can estimate trade flows in macro, macroeconomic volatility.

Reply 4

abcdefghijklmnopqrstuvwxyz

Original post by danny111

although i've not done much game theory, i'll grant you game theory as an exception because i know where it can be used outside of economics.

Not convinced with macro though, there are still too many theoretical situations involved with the models that any undergrad will ever work with

Reply 5

danny111

Original post by abcdefghijklmnopqrstuvwxyz

That is very true, and you point out something important. A lot of things at undergrad is useless/not used in the real world.

Reply 6

rahyahrah

Calculus, calculus, bit more calculus, with a sprinkling of calculus on top.

Reply 7

.ACS.

Original post by the.cookie.monster

Economics at university is a fairly mathematical discipline. The core mathematical tool used is optimization; we are wanting to maximise or minimise some function subject to various constraint functions. The most basic example is maximising profits subject to input/output constraints.

Otherwise, statistics is extensively used to test various economic models for their accuracy. The whole aim of economics is to mathematically model reality, but these models make lots of assumptions and simplify reality greatly, but they need to be as accurate as can be nonetheless.

For a textbook, I'd highly recommend Essential Mathematics for Economic Analysis by Sydsæter et al.

Reply 8

.ACS.

Original post by henriksebastian

The type of math involves is called Econometrics. I'm reading a book which seems pretty good up to now, it's called "Basic Econometrics" by Gujarati D. It introduces the subject very slowly (it's 1000 pages). You can download Economics books in PDF format through torrents, or just invest in one...

Basic Econometrics is an okay text, but this (http://www.amazon.co.uk/Introductory-Econometrics-Jeffrey-Wooldridge/dp/0324788908/ref=pd_rhf_ee_shvl2) is much better for an introduction to econometrics.

Still, both are very basic! :tongue:

Soon you should be onto texts such as these: http://www.amazon.co.uk/Introduction-Classical-Econometric-Theory/dp/0195111648/ref=sr_1_6?s=books&ie=UTF8&qid=1342301340&sr=1-6#reader_0195111648 or http://www.amazon.co.uk/Econometric-Theory-James-Davidson/dp/0631215840/ref=sr_1_1?s=books&ie=UTF8&qid=1342301340&sr=1-1 and you find yourself using matrix notation when dealing with regression theory. Fun stuff. :biggrin:

Reply 9

...mo...

Original post by abcdefghijklmnopqrstuvwxyz

nobody can give you a "real life" situation as such because economics is basically a load of ****ing theoretic situations so just take the plunge imo lol

Economics takes data from real life. Uses this real life data as variables in their theories. Then apply the theory to the real world. Therefore it is combining theory and logic to solve our daily problems.

(edited 11 years ago)

Reply 10

abcdefghijklmnopqrstuvwxyz

Original post by ...mo...

Economics takes data from real life. Uses this real life data as variables in their theories. Then apply the theory to the real world. Therefore it is combining of theory and logic to solve our daily problems.

Thank you for your contribution.

Reply 11

...mo...

Original post by abcdefghijklmnopqrstuvwxyz

Thank you for your contribution.

ok? Quite polite of you.

Reply 12

Zenomorph

Original post by danny111

I can apply it to many RL situations but I bet it won't be the same as any university course with a few notable exceptions.
Same with the rest of macro, optimisation whatever, most of the models used are trite, irrelevant to RL nonsense, used cause the professor has no idea of alternative applications because he has never ever been in the RW, where 1 bad decision may cost your job.

No

Reply 13

Classical Liberal

Do not tend to use enough differential equations in my opinion. Static models are not very useful considering that in the real world there is this thing called "time" which rarely seems to make an appearance in economic models.

Reply 14

kka25

Forgive my ignorance but, aren't Accounting, Economics and Business non-mathematical subjects? They use 'numbers' but they are not 'Mathematics' related.

This is what my Financial Accounting lecturer told us...

Reply 15

.ACS.

Original post by Classical Liberal

They play a much more important role in postgraduate courses. I think a lot of universities fear their BSc Economics students wouldn't be able to cope with the mathematics required, as then at MSc level and above, you do begin to wonder where an Economics degree stops and an Applied Mathematics degree begins.

Reply 16

.ACS.

Original post by kka25

Economics is very much a mathematical discipline. Accounting and Business less-so, and I dare say I'd agree with your lecturer for Accounting and Business modules.

Reply 17

kka25

Original post by .ACS.

Economics is very much a mathematical discipline. Accounting and Business less-so, and I dare say I'd agree with your lecturer for Accounting and Business modules.

I'm having trouble though explaining to people that doesn't mean the course plays with numbers, it's Mathematics related, e.g. Accounting and Business :/

Reply 18

RyanT

Original post by kka25

Economics is.

Please don't lump economics along with accounting or business. It's painful. The maths in my undergraduate finance courses was a joke compared to the economics.