Math is all around us; just about everything can be explained in numbers. Economics is no exception.
Alfred Nobel never created a prize for mathematics. Yet, many mathematicians such as John Nash have won many Nobel Prizes, especially in economics, for their work in mathematics. This observation alone shows us the impact of mathematics on economics. Whether it be the applications of matrices to create economic models or the use of calculus to measure the elasticity of demand, an important connection exists between mathematics and economics.
Here, we’ll explore this crucial connection. We’ll look at many theoretical as well as definite mathematical concepts that can be applied to the business world, both from a micro and macro perspective. Our topics will mainly focus on game theory, but eventually cover numerous areas of studies such as a statistical analysis of risk and the use of Markov chains.
An understanding of these mathematical concepts develops a better understanding of finance and investing. So stay a while and you will soon find the essential mathematic knowledge that all investors need!