Mathematical Economics versus Econometrics YouTube Lecture Handouts

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Mathematical Economics Versus Econometrics

Mathematical Economics

  • Not a distinct branch of economics like international trade

  • Approach that uses mathematical symbols

  • Theoretical analysis – derive set of conclusions from assumptions via reasoning

  • Geometrical has only 2 commodities

  • If –then analysis

Why Mathematical Economics?

  • Concise and precise

  • We have many theorems

  • State assumptions directly

  • Treat n-variable cases

  • From set of postulates (point of departure) to set of conclusions (destination)

Mathematical Economics Versus Econometrics

  • Econometrics – measurement of economic data – empirical observation by statistical techniques of estimation and hypothesis testing

  • Mathematical economics – application of mathematics to theoretical aspects of economic analysis