MATHEMATICAL ECONOMICS – II

Paper Code: 
ECO 423 (A)
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

To understand the economic concepts and theories through mathematical methods so as to refine the verbal logic.

12.00
Unit I: 
Microeconomic Models

The existence and uniqueness of equilibrium- The Stability of equilibrium, Static stability- the Marshallian & Walrasian Stability Conditions, dynamic stability- Lagged adjustment- the Cobweb model; Different models of objectives of the firm –Baumol, Morris and Williamson; Duopoly and Oligopoly market models-The quasicompetitive solution, the Collusion, solution, the Cournot solution, Stakelberg solution, the market share solution and the kinked-demand- curve solution models.

12.00
Unit II: 
Macroeconomic Models

Keynesian theory of income determination, concept and working of Static and Dynamic Multiplier, Employment and output determination with fixed and flexible prices (IS-LM, Aggregate demand and aggregate supply analysis), Flerning-Mundell Open Economy model. Trade cycles: Multiplier-Accelerator interaction trade Cycle models of Samuelson and Hicks. Growth Models: Harrod and Domar; Neoclassical models – Solow, Meade, Kaldor’s Model with technological progress; endogenous growth models.

12.00
Unit III: 
Linear Programming

Simplex method; problem of Degeneracy and mixed constraints, Duality theorems, complementary slackness conditions, application of linear programming in economics.

12.00
Unit IV: 
Input-Output Analysis

Concepts of static, dynamic closed and open input - output models. Hawkins-Simon conditions of viability, Determination of gross output, price and value added; Determination of gross output in closed input-output model.

12.00
Unit V: 
Theory of Games

Two-person constant sum games, Zero-sum Game, Maximin and Minimax, dominant strategies, Pure and Mixed strategies, Saddle point solution, linear-programming formulation of a matrix game, conversion of game theory into linear programming.

Essential Readings: 
  1. J.M. Henderson and R.L. Quandt: Micro Economic Theory: A Mathematical Approach, McGraw-Hill. London.
  2. B.C. Mehta: Mathematical Economics: Microeconomic Models, Sultan Chand & Sons, New Delhi.
  3. Alpha C Chiang : Fundamental Methods of Mathematical Economics, McGraw-Hill, Kagakusha, Tokyo.
  4. R.G.D. Allen, Macroeconomic Theory: A Mathematical Treatment, McGraw-Hill, London.
  5. Michael K. Evans: Macroeconomic Activity: Theory, forecasting and Control.
  6. B.C. Mehta and G.M.K. Madnani: Mathematics for Economists, Sultan Chand & Sons, New Delhi.
  7. Misra S K and V.K Puri: Growth and Development, Himalaya publications, New Delhi
  8. Thirlwal A P: Growth & Development, Palgrave / Macmillan
  9. Eric Pentacost, Macro Economics: An Open Economy Approach, Macmillan, Indian Edition, New Delhi, 2000.
  10. Errol D;Souza, Macroeconomics, Pearson Education, 2008
  11. Richard,T.Froyen, Macro Economics: Theories and Policies, Pearson Education, 2003
  12. Gregory Mankiw, Macroeconomics, CBS Publishers, New Delhi,1992.
Academic Session: 
2017-18
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