For many people who don’t go past an introductory ECON course, the relevance of mathematics in the field of economics may not be immediately obvious. In fact, I would assert that it isn’t until graduate level work that one would really be able to appreciate the amount of math that is used in economics. I say this because, as a double major in Mathematics and Economics, I have been surprised at how little math has been used in the ECON courses I have taken. Even in Mathematical Economics (ECON 345 here at PLU), the math covered was only basic concepts from Multivariate Calculus and Linear Algebra. Luckily, Paul Krugman, a professor of Economics and International Affairs at Princeton University, has described (very concisely) one of the ways he uses mathematics in economics in his New York Times article *Mathematics and Economics*.

In his article, Krugman explains that he uses mathematics in his economic research to help define and describe a situation. He writes, “In the economic geography stuff, for example, I started with some vague ideas; it wasn’t until I’d managed to write down full models that the ideas came clear. *After* the math I was able to express most of those ideas in plain English, but it really took the math to get there, and you still can’t quite get it all without the equations.”

Krugman also pointed out the limitations of economics even with the use of mathematics. He explains that just because something can be modeled nicely does not mean that the model is correct. I fear that this is a shortcoming that many have fallen prey too. While mathematics is an incredibly useful tool in economics, they are two distinct fields, and treating models as fact in economics can have disastrous results.

Despite the limitations of mathematical economics, it is still a fascinating field. I’d be interested to learn more about the math going on behind the scenes in economics, as well as its applications.

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I agree but I still strongly dislike Krugman 😉

What kind of topics and applications are used in your mathematical economics course? I’m interested in how these mathematical concepts are applied in the real world.

Thanks!

-Davis

Some of the real world applications we looked at were optimization subject to budget (among other) constraints, utility (happiness) maximization for a worker facing the trade off of leisure time and wage, and ways of estimating the effects of imposing a tax on GDP (an nation’s output).