Numerical Methods for Economics

Code:

2ECON04

Acronym:

MN

Keywords
Classification	Keyword
CNAEF	Mathematics

Instance: 2017/2018 - 1S

Active?	Yes
Web Page:	https://moodle.up.pt/course/view.php?id=450
Responsible unit:	Agrupamento Científico de Matemática e Sistemas de Informação
Course/CS Responsible:	Master in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	59	Bologna Syllabus	1	-	7,5	56	202,5

Teaching language

Português/English (horários/schedules ME1 Português; ME3 English)

Objectives

This course deals with numerical methods for the solution of economic problems using a computer. The aim is to provide students with the numerical and computational techniques necessary for the implementation and resolution of economic problems in computer. Emphasis will be on intuition and applicatibility conditions of methods and not on their deductiblility and computer implementation. The aim is also for students to acquire awareness of the potential of this approach to solve large dimensional problems (or problems withput closed solution) as well as to point out the limitations of finite precision arithmetic.

Learning outcomes and competences

Working method

B-learning

Program

Introduction to MATLAB /OCTAVE. Finite precision arithmetic. Introduction to Programming. Linear Systems of equations: supply-demand models, IS-LM model, Mundell-Fleming model. Systems of nonlinear equations: AS-AD model. Eigenvalues and eigenvectors: dynamic IS-LM and AS-AD, duopoly, stability of dynamic systems. Interpolation and least squares. Optimization. Differential equations: Solow and Ramsey-Cass-Koopmans models.

Mandatory literature

Afonso, Óscar João Atanázio; Computational economics. ISBN: 978-1-138-85966-1
Moler, Cleve B.; Numerical computing with MATLAB. ISBN: 0-89871-560-1

Complementary Bibliography

Hendrick, David A.; Computational economics. ISBN: 0-691-12549-X
Judd, Kenneth L; Numerical methods in economics. ISBN: 0-262-10071-1

Teaching methods and learning activities

The course is organized in lab sessions, based on modules. The teaching methodology in each module is structured as follows:

• description of the problem to solve;
• identification with explanation of the appropriate numerical methods for their resolution;
• examples of application in economics;
• exercises and simulation (sedimentation and knowledge exploitation).

Software

OCTAVE
MATLAB

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Teste	30,00
Trabalho laboratorial	70,00
Total:	100,00

Eligibility for exams

Evaluation will be based on the achievement of (i) 2 projects held during the semester and (ii) 2 short assessments.

Calculation formula of final grade

35% P1 + 35% P2 + 15% SA1 + 15% SA2 where: P - Project and SA - Short-Assessment.