Mathematical economic theory
Associate Professor Keith McLaren
7 points
* Two 1.5 hour lectures per week
* First semester
*
Clayton
* Prerequisites: ECO3840, ECM3400, ECM3410 or a mathematics
subject
Objectives On completion of this subject students should be: able to understand the necessary conditions of calculus of variations and optimal control; capable of posing and solving as problems of intertemporal optimisation the standard problems of investment, consumption and optimal growth; capable of reading current literature in these areas.
Synopsis Mathematical preliminaries; static optimisation theory; introduction to calculus of variations and optimal control theory; necessary and sufficient conditions; investment theory: costs of adjustment, neoclassical, q theory; consumption theory; use of duality theory; growth models; Hamilton Jacobi theory; discrete time stochastic models; selected current applications.
Assessment Written (three assignments): 40%
* Examination (3 hours):
60%
Recommended texts
Leonard D and Long N V Optimal control theory and static optimisation in economics CUP, 1991
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