If you think that economics is one of the subjects which students who don't like math study at school, I don't think that you are to the point. Modern economics is more like physics than any political or social science. (However, I should say that even sociology and politics have used a lot of math recently, for example, game theory.)
In macroeconomics, which is the subject I like, there are a lot of extension of physics. One of them is the Hamilton-Jacobi-Bellman equation, HJB.
The Hamilton-Jacobi-Bellman equation:
V=aH
where V is the Bellman equation, H the Hamiltonian function, and a is assumed a constant for brief.
In economics, H is generally the value of the aggregate income level, say, GDP, and V the value of the capital stock or wealth in the economy. This is an important point, these two values are estimated in terms of utility that the agents hold. However, it is a theoretical idea in economics, of course, in real economy, we cannot estimate these values in terms of utility because we cannot know what utility the agents have. So we usually use this equation by approximating these values by econometric procedures to evaluate the efficiency of economy, that is, to investigate how efficiently the economy is working. In other words, economists would compare the theoretical a with the actual a which is obtained by estimating these two values of the real economy to evaluate the efficiency of the economy. To do that, we can know about what proper policy we really need to make our economy better.
If you want to know about it more precisely, please read the books related to it, but today I want you to know that this equation is very beautiful. To tell the truth, I have never learned physics as a high school because my school had no science and math class. It had only English classes, for example, English grammar, English expression, English reading, English writing, English conversation,..., and so on. Surprisingly, these were all the same!
By the way, I have to talk about this equation because my readers of this blog are not always familiar with economics and math. So I will tell you soon about this equation used in economics. However my explanation will be from my understanding of it, not from my textbook, and so there's no guarantee to let you know clearly and understand correctly. (I mustn't copy some pages related to it in my textbook because it has generally a copyright to be protected legally.) Today, please take a look at this beautiful equation, sorry.
2 comments:
Hmm... After reading your small articles, my resolve of learning more economics becomes stronger. But this time, I will do it more cautiously and let my study more steadily. Everything must be put under the premise of a regular life. I hope I will not be in hospital just because of studying!
Yes, exactly. If you like studying economics, I think that it would be better that you should do that if you have time and if you are healthy.
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