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Complex numbers - i - used in Economics?

Just curious as to how

\sqrt{-1}

is used in economics?

any degree students want to share!

Thanks

Scroll to see replies

Reply 1

-WhySoSerious?

I really doubt there would be any serious use for it?

Reply 2

Hedgeman49

Most banks use imaginary numbers when making profit predictions for the next few years.

Reply 3

neomilan

-WhySoSerious?

I really doubt there would be any serious use for it?

There is a use for it, i looked in this old mathematics for economists book and it just shows how to use complex numbers and not its application in macro/microeconomics

Hedgeman49

Most banks use imaginary numbers when making profit predictions for the next few years.

really? tell me more

Reply 4

Hedgeman49

neomilan

really? tell me more

Sorry, I should have made the cheap joke more obvious. :wink:

Reply 5

vinsta

neomilan

There is a use for it, i looked in this old mathematics for economists book and it just shows how to use complex numbers and not its application in macro/microeconomics

really? tell me more

I think he's joking lol.

Reply 6

ste0731

Hedgeman49

Sorry, I should have made the cheap joke more obvious. :wink:

made me chuckle though :smile:

Was quite a clever joke in all honesty :p:

Reply 7

neomilan

Hedgeman49

Sorry, I should have made the cheap joke more obvious. :wink:

i thought my sarcasm was obvious! i should have put a :rolleyes:

after

Bad save.

neomilan

i thought my sarcasm was obvious! i should have put a :rolleyes:

after

My work here is done.

Reply 10

Hanoi

Yes, some guy won the Nobel prize for it.

Reply 11

.ACS.

I would assume so, seeing as most decent universities for Economics include complex numbers in their Mathematics for Economists modules (or equivalent thereof).

I've read somewhere it's used in cost and profit functions when trying to maximise them after differentiating. Apart from that, I've not found anything concrete.

Reply 12

Waheyyyy

neomilan

i thought my sarcasm was obvious! i should have put a :rolleyes:

after

Whateverrr :wink:

Reply 13

Phugoid

I'm not sure if they have a USE. But I can see why they come up.

Complex numbers, afterall, arise when the roots of a polynomial require it, and polynomials are used extensively in economics. Cost functions, etc.

Reply 14

JessicaW

neomilan

i thought my sarcasm was obvious! i should have put a :rolleyes:

after

Yeahhh, okay.

" :rolleyes:

Reply 15

imsogreat100

Hedgeman49

Most banks use imaginary numbers when making profit predictions for the next few years.

very good lol

Reply 16

.ACS.

Paulwhy

...

Any thoughts, Paulwhy?

Reply 17

Mustard-man

From what I can remember, I've only seen them (briefly) in my second year Statistical Theory unit, specifically distribution theory, though I guess they can easily be applied in other contexts as well.

Spoiler

For my first year Maths for Economics unit, it was mentioned that cost and profit functions could be extended by the use of complex numbers. Perhaps the lecturer illustrated on the board, but it definitely wasn't examinable material, merely to further understanding. Also I didn't do second year Microeconomics Theory, which is hugely mathematical based, so I can't comment on that (all I know is it used the Varian book).

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Reply 18

astudent

neomilan

Just curious as to how

\sqrt{-1}

is used in economics?

any degree students want to share!

Thanks

Two uses I can think of right now are for differential equations and matrix diagonalization - both of which relate to economics i.e. rates of change, difference equation systems.