Nature scope and importance of Mathematical economics

Mathematical economics is not a distinct branch of economics like public financing or trade rather it is the application of mathematical methods to represent theories and analyze problems in economics. More commonly, however, mathematical economics is reserved to describe cases employing mathematical techniques beyond simple geometry, such as matrix algebra, differential and integral calculus, differential equations, difference equal ions, etc.

The mathematics has an important role in the development and functioning of agricultural economics. The choice between literary logic and mathematical logic, again, is a matter of little import, but mathematics has the advantage of forcing analysts to make their assumptions explicit at every stage of reasoning. This is because mathematical theorems are usually stated in the "if-then" form. The mathematical economics helps to solve optimization problems as to goal equilibrium, whether of a household, business firm, or policy maker. Similarly, it is static analysis in which the economic unit (such as a household) or economic system (such as a market or the economy) is modeled as not changing. It provides comparative statics as to a change from one equilibrium to another induced by a change in one or more factors. It also helps in dynamic analysis, tracing changes in an economic system over time, for example from economic growth.

Mathematical economics is also defined as model of economics that utilizes math principles and methods to create economic theories and to investigate economic quandaries. Mathematics permits economists to conduct quantifiable tests and create models to predict future economic activity. More commonly, however, mathematical economics is reserved to describe cases employing mathematical techniques beyond simple geometry, such as matrix algebra, differential and integral calculus, differential equations, difference equal ions, etc. Advancements in computing power, big data techniques and other advanced mathematics applications have played a large part in making quantitative methods a standard element of economics. These elements are all backed by scientific methods advancing the study of economics. Mathematics allows economists to form meaningful, testable propositions about wide-ranging and complex subjects which could less easily be expressed informally. The adoption of mathematics in economic analysis brings a high level of precision to the analysis; assumptions are clearly stated, procedures are specified, and the logical consistency of mathematically based models is (often) easier to check than non-mathematical models. Further, the language of mathematics allows economists to make specific, positive claims about controversial or contentious subjects that would be impossible without mathematics (Varian, 1997). Much of economic theory is currently presented in terms of mathematical economic 

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