HE301-Mathematical Economics

Course Description and Scope

This course intends to familiarize students with the basic mathematical methods that are indispensable for
understanding the current economic literature. The following major types of economic analysis will be
covered: statics (equilibrium analysis), comparative statics, and optimization problems (as a special case of
statics), and dynamics, making use of the following mathematical methods: matrix algebra, differential and
integral calculus, differential equations and difference equations. To underscore the relevance of
mathematics to economics, appropriate economic applications will follow immediately after each
mathematical technique studied.

Proposed Lecture Schedule

Week No.
1

Topics
Lecture 1:

Readings
Class Notes

Review: Calculus and Linear Algebra

2

Lecture 2:

Class Notes

3.1 Classical Optimization

CW Chapters 9, 10, 11

3.2 Economic applications

3

Lecture 3:

Class Notes

4.1 Comparative Statics Microeconomic applications

4.2 Comparative Statics in Macroeconomics
4

Lecture 4:

Class Notes

5.1 Optimization with equality constraints

CW Chapter 12

5.2 Economic applications

5

Lecture 5:
7.1 Non-linear programming and Kuhn-Tucker
conditions

Class Notes
CW Chapter 13

7.2 Economic applications

6

Lecture 6:
Mid-Term 1

Lecture 7:
8.1 Review of Integral Calculus

Class Notes

8.2 The notion of dynamics

CW Chapter 14

Week No.

Topics
8.1 First order Differential Equations

Readings
Class Notes

8.2 Economic applications

CW Chapter 15

Recess

Lecture 8:

Class Notes

9.1 Higher order Differential Equations

CW Chapter 16

9.2 Economic applications

10

Lecture 9:

Class Notes

10.1 First order Difference Equations

CW Chapter 17

10.2 Economic applications

11

Lecture 10:

Class Notes

11.1 Second order Difference Equations

CW Chapter 18

11.2 Economic applications

12

Lecture 11:
Mid-term 2

13

Lecture 12:
Review

Course Material
Weeks 1-12:
Class presentation slides will be provided
Basic Text (to accompany class notes):
CW: A. Chiang and K. Wainwright
Fundamental Methods of Mathematical Economics, Fourth Edition
Mc. Graw-Hill International Edition.
Call Numer: HB 135. C532
Method of Instruction
Lectures
Tutorials

:
:

2 hours per week

1 hours per week

Lectures commence in Week 1 and end in Week 13

Tutorials commence in Week 2 and end in Week 14

Assessment
Class participation: 10%
Mid-term 1: 15%
Mid-term 2: 15%
Final Exam: 60%