**Economics 331 **

**Mathematical Economics**

**Mr. Moody**

**Spring 2021**

**Text:
Chiang and Wainwright, Fundamental
Methods of Mathematical Economics (Fourth Edition)**

Note: There is no need
to buy the fourth edition. There are many used copies of the third edition (Chaing without Wainwright) on the internet. For example

https://www.abebooks.com/9780070108134/Fundamental-Methods-Mathematical-Economics-3rd-0070108137/plp.

More sellers can be
found by Googling “Chiang Third Edition”.

The parts of the
fourth edition that are not available in the third edition are available in the
Course Documents section of the Blackboard web site.

All readings, except
Chiang and Wainwright are available on Blackboard in the Course

Documents section. Readings from earlier editions of Chiang are also available
in Blackboard.

Tests: Midterm (33%) Wednesday March 24, in class, open book; Final (67%), May 14, 2pm, open book

You are invited to write an optional paper on any subject using the tools and methods developed in the course: with optional paper: midterm 25%, paper 25%, final 50%

Grading scale: A 90-100, B 80-89, C 70-79, D 60-69. Numerical grades are rounded up.

Add/drop deadline (Feb 5, 11:59pm); withdraw deadline (March
29, 11:59pm).

Maple: much of the material in this course is replicated using the Maple mathematical language; more information is available in the Course Information section of the Blackboard site.

**Linear Algebra and General Equilibrium**

Chiang and Wainwright, Chapters 1-5

Application: computable general equilibrium (Leontief input-output analysis)

**Linear Programming and Duality**: Optimization of
linear functions subject to linear constraints and non-negativity conditions

Chiang
Chapters 19,20 (Blackboard)

Bassi, L.J. "The Diet Problem Revisited," *The
American Economist*, 20, Fall 1976, 35-39

The knowledge problem

Spontaneous order

Capitalism vs Socialism

**Game Theory (two person zero sum games): **minimax solutions

Chiang Game Theory (Blackboard)

Application: American football

**Comparative Static Analysis**

Chiang and Wainwright, Chapters 6-8

Application: IS-LM macro model

Allen, R.G.D. *Macro-Economic
Theory*, ch. 7 (Blackboard)

**Optimization****
of unconstrained nonlinear functions**

Chiang and Wainwright, Ch. 9-11.

**Optimization of constrained nonlinear functions**

Chiang and Wainwright, Ch. 12

**Optimization of nonlinear functions with linear
constraints and non-negativity conditions: **nonlinear programming

Chiang and Wainwright, Ch. 13

Kuhn, "Duality in Mathematical Programming" (Blackboard)

Takayama,
A. "Behavior of the Firm under Regulatory Constraint." *American
Economic Review* (1969) 255-260. (Blackboard)

**Applications**

The Envelope Theorem (Chiang and Wainwright Ch 13)

Mathematical History

The Oil Crisis and Entitlements