Master
2018/2019
Instrumental Methods of Economic Analysis
Type:
Bridging course (Finance)
Area of studies:
Finance and Credit
Delivered by:
Department of Economics
When:
1 year, 1 module
Mode of studies:
offline
Instructors:
Sergey Kichko
Master’s programme:
Finance
Language:
English
ECTS credits:
2
Contact hours:
24
Course Syllabus
Abstract
The tutorials involve studying calculus and linear algebra methods and their application to solving constrained and unconstrained optimization problems using terms and concepts studied in class.The course consists of lectures (8 hours) and tutorials (16 hours).
Learning Objectives
- The purposes of the discipline "Instrumental Methods of Economic Analysis" are: understanding the basic concepts of mathematical analysis and linear algebra; and acquiring skills in solving optimization problems of various types.
Expected Learning Outcomes
- Understand the theory of elementary functions, methods of calculus related to the differentiation of single and multiple variable functions.
- Know the necessary and sufficient conditions for concavity/convexity of the function and maximum/minimum.
- Be able to solve unconstrained and constrained optimization problems
- Have an understanding of the envelope theorem and be able to use it in the optimization problems
Course Contents
- Linear algebra: operation with matrices, square matrices, determinant, eigenvalues and eigenvectors
- Functions of one variable: derivative of the function, necessary and sufficient conditions for increasing/decreasing, concavity/convexity, extremum and inflection points.
- Functions of multiple variables: first and second order partial derivatives, Schwarz theorem, necessary and sufficient conditions for concavity/convexity and extremum points
- Unconstrained optimization of multiple variables functions: necessary and sufficient conditions for local/global maximum/minimum, envelope theorem
- Constrained optimization of multiple variable functions. Equality constrains: necessary and sufficient conditions for maximum/minimum, relationship between concavity/convexity of the function with the type of extremum. Inequality constrains: Kuhn-Tucker theorem, relationship between concavity/convexity of the function with the type of extremum
Interim Assessment
- Interim assessment (1 module)0.1 * class participation + 0.4 * class quizzes + 0.5 * final exam
Bibliography
Recommended Core Bibliography
- Sundaram, R. K. (1996). A First Course in Optimization Theory. Cambridge University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.cup.cbooks.9780521497701
Recommended Additional Bibliography
- Vinogradov, V. V. (2010). Mathematics for Economists. University of Chicago Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.ucp.bkecon.9788024616575