- The plan of this book is simple:
- Begin with the
hello worldprogram in the Ox programming language. - End with applications of numerical methods to some basic economic models and a few advanced ones.
- In between it will:
- Use the free (for academic use) programming language Ox, which is a matrix- and object-oriented language that has all the basics an economist needs to do computational economics.
- Cover essentials of programming and some advanced concepts such as object-oriented programming and parallel processing.
- Provide an elementary discussion of computer architecture and how computer languages take what you want to do and convert to hardware instructions, focussing on the advantages and disadvantages of interpreted languages relative to compiled languages.
- Discuss basic algorithms for mathematics required by canonical economic models such as objective maximization, competitive equilibrium and finding fixed points in strategic models.
- Prerequisite Knowledge and Skill This text was written for Econ 354 at Queen's University, which is a third-year elective course. All students will have typically taken these courses and be expected to have some mastery of the material
- One year undergraduate course in calculus
- Intermediate Microeconomics and Macroeconomics (using calculus)
- Undergraduate Mathematical Economics (using the Chiang book referenced below or equivalent)
- One term course in Statistics and usually a one term course in Econometrics
- Required, Suggested and To-Skip Sections This version of the text was produced for a particular class. Some sections are not included at all. Others are included for completeness but are not covered in this class. The icons listed below are a guide for the sections actually covered in this class.
- Outside References
- Numerical Recipes in C by Press et al.
- This version of Numerical Recipes is freely available for reading online. Sections of the book that are supported by Numerical Recipes are keyed with NR x.y, where x.y is the relevant section.
- Wikipedia
- Wikipedia entries on numerical algorithms and mathematics are typically very well done. Students are encouraged to look them up to supplement the material here. Typically searching for the major terms used in these notes will result in the correct Wikipedia entry, although occasionally the notation may differ.
- Fundamental Methods of Mathematical Economics, 4th edition, by A. Chiang and K. Wainwright
- This is, surprisingly, still the standard undergraduate text on mathematical economics. Sections of this book supported by it are keyed with CW x.y.
- Numerical Methods in Economics by Judd
- The standard text for graduate students and professional economists. It is more comprehensive than Numerical Recipes and includes details about theoretical properties of algorithms. Much of the material is beyond the scope of this class, but any students who want more depth can find discussions of all topics in Judd. Relevant sections are keyed as Judd x.y
- Catch the Song and Movie References Most of the section titles and other named material refer to a song, lyric, movie quote, etc. Many are "dad references" given my age but if you think you know the source you can put the cursor over material coming before a flat note ♭This will be the source of the reference
crash courserelevant to economics. Otherwise they would need to take at least one year of computer science courses without getting most of the numerical methods covered here. Approximately one quarter of the class does have some programming experience and/or more mathematics because they have engineering or mathematics backgrounds. For them, the programming material has some new elements and different points of emphasis compared to programming courses but it is not difficult to master it with some effort.
| Icon | Meaning |
|---|---|
| This section (and subsections) are required and covered in lectures and assignments | |
| This section is suggested to read but is not covered directly | |
| You can skip this subsection of a larger required section |