Foundations of mathematical economics (ISBN 0262032899)
Economists rely on models to obtain insight into a complex world. Economic analysis is primarily an exercise in building and analyzing models. An economic model strips away unnecessary detail and focuses attention on the essential details of an economic problem. Economic models come in various forms. Adam Smith used a verbal description of a pin factory to portray the principles of division of labor and specialization. Irving Fisher built a hydraulic model (comprising ¯oating cisterns, tubes, and levers) to illustrate general equilibrium. Bill Phillips used a di¨erent hydraulic model (comprising pipes and colored water) to portray the circular ¯ow of income in the national economy. Sir John Hicks developed a simple mathematical model (IS-LM) to reveal the essential di¨erences between Keynes's General Theory and the ``classics.'' In modern economic analysis, verbal and physical models are seen to be inadequate. Today's economic models are almost exclusively mathematical
- Mualliflar: Carter M.
- Primary Category: Iqtisodiyot
- Til: Ingliz
- Nashr yili: 2001
- Nashriyot: MIT
- Sahifalar soni: 666