İKT261

School of Economics and Administrative Sciences \ Economics

3

6

Compulsory

English

MAT 103 or İKT105

Economics

Set theory and introduction to logic. Closed functions. Introduction to optimization, Weierstrass theorem, implicit function theorem, unconstrained and constrained static optimization and economic applications. Homothetic and homogeneous functions. Integrals and applications from economics.

Klein, M. W., Mathematical Methods for Economics, 2nd ed., Addison Wesley, 2002. (K)
Chiang, A. and K. Wainwright, Fundamental Methods of Mathematical Economics, 4th ed, McGraw-Hill Irwin, 2005. (CW)
Simon, C. P. and L. Blume, Mathematics for Economists, 1st ed. Sundaram, R.K., A First Course in Optimization Theory, Cambridge University Press, 1996.

This course intends to introduce the basic mathematical tools used in economics with their applications. Mathematical preliminaries and their use in several economics problems will be of interest.

1. By understanding the applicability of mathematical tools to economic problems, they will be able to use linear algebra and optimization techniques in an economic context.
2. Students will learn the fundamental theories of functions, set theory, logic, and optimization, and understand how these theories are applied in economic modeling.

Week 1: Matrix Linear Algebra
Week 2: Matrix Linear Algebra
Week 3: Matrix Linear Algebra
Week 4: Review of functions, differentiation etc.
Week 5: Static Optimization
Week 6: Static Optimization
Week 7: Static Optimization
Week 8: Static Optimization
Week 9: Static Optimization
Week 10: Introduction to dynamic optimization in discrete-time: Dynamic Lagrange method
Week 11: Introduction to dynamic programming and Bellman equation; and economic applications
Week 12: Introduction to dynamic programming and Bellman equation; and economic applications

• Assignment 15 %
• Midterm 30 %
• Quiz 15 %
• Final 40 %