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Econ 322

Punjab University, B.Sc economics, Advance Mathematical economics

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Aamir Nawaz
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16 views4 pages

Econ 322

Punjab University, B.Sc economics, Advance Mathematical economics

Uploaded by

Aamir Nawaz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Teaching Methodology:

 To deliver lectures on topics included in course outline


 To require each student to work on research project and present it.
Evaluation Criteria:
Evaluation Method Total Percentage
Quizzes/Assignments 25%
Mid-Term Exam 35%
Final-Term Exam 40%

Recommended Books:
 Todaro & Smith (2014). Development Economics, 11th or 12th Edition Pearson
 Herrick B. and Kindleberger C., (latest eds.). Economic Development. McMillan, New
York.
 Jones H. G., An Introduction to Modern Theories of Economic Growth, (Latest Edition),
McGraw Hills
Recommended Research Articles:

 Cruz, M., Foster, J.E., Quillin, B. and Schellekens, P., 2015. Ending Extreme Poverty and
Sharing Prosperity.
 Women and Contraceptives http://www.cnn.com/2012/07/09/opinion/gates-
contraception-families/index.html
 Tacoli, C., McGranahan, G. and Satterthwaite, D., 2015. Urbanisation, rural-urban
migration and urban poverty. Human Settlements Group, International Institute for
Environment and Development.
 Economist “Healthcare in Poor Countries: For 80 cents More” August 15, 2002
http://www.economist.com/node/1280587

Course Code: ECON-322


Title: Advanced Mathematical Economics
Credit Hours: 03
Prerequisite: Calculus –I & Calculus -II

Course Objectives:
In this course, particular focus is on applying the mathematical tools on economic theory and
models. The level of sophistication at which the material is to be taught is indicated by the
Course Contents of the prescribed textbooks.

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Learning Outcomes:
 On completion of this course, students would be able to
 Apply mathematical techniques for better understanding of economic theory
 Relate mathematical methods most relevant to economics and fully explain each method
 Illustrate how the method is applied in economic analysis
 Use mathematical tools for understanding the relationship between Micro and
Macroeconomic variable

Course Contents:

First Order Linear Meaning and Definition; Homogenous & non-Homogenous Cases.
Differential Solution of First Order Linear Differential Equation with Constant
Equations Coefficient & Constant Term and its Verification. Economic
Applications: Dynamics of Market Price, Dynamics of Consumption
using Differential Equations.

Microeconomic Dynamics of Investment using Differential Equations. Dynamics of


Applications of Value of Oil Well, Dynamics of Value of Gold Mine, Dynamics of
First Order Linear Future Value of Investment, Dynamics of Fuel Consumption,
Differential Limited Growth, Dynamics of Ore Mining, Dynamics of Fish Stock.
Equations:
Macroeconomic National Income Determination using Differential Equations,
Applications of Dynamics of Population, Dynamics of Government Spending,
First Order Linear Dynamics of Unemployment.
Differential
Equations:

First Order Solution and its Verification of First Order Differential Equation
Differential with Variable Coefficient and Variable Term.
Equation with
Variable
Coefficient and
Variable Term
Exact Differential Equation, its Solution and Verification.
Non-linear Production Function using Exact Differential Equations, Utility
Differential Function using Exact Differential Equations, Average Cost Function
Equations of the using Exact Differential Equations, Point Elasticity Formula using
First Order and Exact Differential Equations. Separable Variables. Dynamics of
First Degree. Capital using Separable Variables Method. Bernoulli Equation. The
Qualitative Graphic Approach. Concept of Phase Diagram, types of
Time Paths and their Dynamic Stability. Economic Application:
Solow Growth Model: Qualitative Analysis, Phase Diagram and
Quantitative Analysis.

41
Fundamentals of trigonometry, Trigonometric identities.
Trigonometry and Imaginary and Complex Numbers. Complex Roots. Circular
Complex Numbers Functions. Properties of Sine & Cosine functions. Euler Relations.
Alternative Representation of Complex Numbers.

Second Order Solution and Verification of Second Order Linear Differential


Differential Equations with Constant Coefficient and Constant term-Distinct
Equations Real Roots, Repeated Real Roots and Complex Root Cases. Dynamic
Stability of Equilibrium. Economic Applications: A Market Model
with Price Expectations. The Interaction of Inflation and
Unemployment. Phillips Curve: The Phillips Relation, Expectations
Augmented Phillips Relation, Feedback from Inflation to
Unemployment, Time Path of Expected Rate of Inflation, Time Path
of Expected Rate of Inflation – Numerical, Time Path of Inflation –
Numerical, Time Path of Unemployment – Numerical.

Differential Differential Equation with Variable Term, Differential Equation


Equations with with Variable Term: A Modification.
Variable Term

First Order Solution and Verification of First Order Difference Equations. The
Difference Dynamic Stability of Equilibrium. Economic Applications – The
Equations Cobweb Model, A Market Model with Inventory. Harrod Model of
Growth, Lagged Income Determination Model, Income Dynamics
with Induced Investment, Capital Market, Money Market and
Balanced Trade using Difference Equations. Investment Dynamics
using Difference Equations. Fish Stock Analysis using Difference
Equation, Difference Equations and Adaptive Expectations.

Second Order Solution and Verification of Second-Order Linear Difference


Difference Equations with Constant Coefficients and Constant Term-Distinct
Equations Real Roots, Repeated Real Roots and Complex Roots cases. The
Convergence of the Time Path. Economic Applications, Samuelson
Multiplier-Acceleration Interaction Model. Inflation and
Unemployment in Discrete Time. Second-Order Difference
Equation with Variable Term, Second-Order Difference Equation
with Variable Term (𝑐𝑡 𝑛 )

Higher Order Solution of Higher Order Differential Equations with Constant


Differential and Coefficient and Constant Term. Convergence and the Routh
Difference Theorem. Higher Order Linear Difference Equations and their
Equations Solutions. Convergence and Schur Theorem.

Linear Ingredients of linear Programming. Graphical approach, simplex


Programming method, economic application of linear programming. Concept of

42
primal & dual. Duality theorems. Solving of Primal via dual.
Economic interpretation of a dual.

Non-Linear The Nature of Non Linear Programming Non-Linearities in


Programming: Economics. Kuhn Tucker Condition. Interpretation of Kuhn Tucker
Condition. Kuhn Tucker Sufficiency Theorem: Concave
Programming. Arrow Enthoven Sufficiency Theorem:
Quasiconcave Programming. Economic Application-Utility
Maximization, Least Cost Combination. Solving a Nonlinear
Program via the Kuhn-Tucker Conditions.

Teaching Methodology:
 To deliver lectures on topics included in course outline
 To require each student to solve independent assignments on topics included in the
course.
Evaluation Criteria:
Evaluation Method
Quizzes/Assignments
Mid-Term Exam
Final-Term Exam

Recommended Books:

 Chiang A.C. Fundamental Methods of Mathematical Economics McGraw Hill –Latest


 Edition.
 Weber E. Jean, Mathematical Analysis, Business and Economic Application (latest
edition).
 Bradley, T. Essential mathematics for economics and business. Latest edition. John Wiley
& Sons.
 Dowling, E. T. Theory and Problems of Introduction to Mathematical Economics. Latest
Edition, McGraw-Hill, New York.
 Hoffman, L. D., & Bradley, G. L. Calculus for business, economics, and the social and life
sciences. McGraw-Hill. Latest edition.
 Kolman, B., & Beck, R. E. (1995). Elementary linear programming with applications.
Academic Press.
 Sydsæter, K. and Hammond, P. Essential Mathematics for Economic Analysis. Latest
edition., Pearson Education Limited, England.

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