Blog 1: An Introduction

Mathematics and Economics - Introduction

By William Matcham

Welcome to the LSESU Economics Society Research Department MA100 Blog. This weekly blog aims to reveal the applications of the mathematics that economists at LSE learn, and the motives behind doing so. Often when studying MA100 (for those of you unfamiliar with LSE, this is the 1^st year mathematics course for economists and mathematicians), the applications of MA100 to economics are so explicit, that the study seems both necessary and rational [1]. However, there are little who argue that the application of trigonometry to economics is blindingly obvious.

This blog aims to explicitly reassure economics students that what they are learning will be useful in the future. An example of this is the concept of convex and concave functions, which play a crucial role in micro and macroeconomics. For me at least, I could not see into the future and realise that diminishing marginal products (that is, concave production functions) would be central to our studies into the growth of the macroeconomy. To summarise, I hope that this blog will make it clear to students that mathematics is useful in economics, and confirm to students that they are not just learning mathematics for the fun of it. I will try to spread my examples evenly over micro and macroeconomics, and econometrics, although it is certainly easier to use examples from microeconomics than the other two.

The level of mathematics in this blog will certainly not exceed the level of MA100. Along with this, this blog will certainly not turn into a regurgitation of the MA100 lecture slides with a quick example at the end. Yes, I may spend a small amount of time to briefly summarise the content of the week, but I will state again that the purpose of this blog is to reveal to economists how the mathematics that they learn is genuinely useful in economics, not to teach mathematics. That saying, because the ideas are very introductory to begin with, finding explicit examples in economics may prove difficult. I will try to keep the equations and variables to a minimum, and work in words, but I definitely make no promises here.

So that’s about it for administration. For more information about the LSESU Economics Society in general, please go to www.economicssociety.org or check out our Facebook Page. Will

[1] - For example, see Lecture 12 and the application of the Lagrangian to Consumer Optimisation