Economics Access Course

1. Economics Access Course Sylvain Barde

2. The rules of the game • Seminars • The marking system and the exercises • Purpose of the course

3. The seminars • 14 weeks times 1 hour • Attendance to the seminars is compulsory • Make sure you do the exercises each week • Prepare questions on the points or the reading that seem unclear • Do not hesitate to ask questions during the seminar • The course outline and slides will be made available on the ENTG

4. The seminars • During the first part of each hour we will: • Go over the exercises from the previous week • Clarify points on which you had trouble • Make sure you prepare the exercises, they are part of the learning process ! • The exercises to be prepared for each week will be given in the course outline

5. Module marks • The overall mark for the module is based on the seminar work you hand in: • 2/3 given by the seminar marks • 1/3 given by personal mark (attendance, participation) • The average exercise mark (incentives!) : • You are free to hand in exercises every week • The mark is the average of your best 6 results • If you hand in less than 6 exercises, then your average takes in the extra 0’s needed to make up the 6 marks...

6. Economics Access Course Introduction Why economics contains so much maths

7. Why economics contains so much maths • Economics tries to understand the behaviour of agents • Resources are limited, therefore agents have to make choices. • These depend on the incentives faced by the agent • Because agents are different, they can benefit from exchange • Producers and consumers therefore meet on markets that ensure an efficient use of these resources

8. Why economics contains so much maths • The aim of economics if to answer the following questions: • What to consume ? How much ? • What to produce ? (Which good ?) • How to produce it ? (Which technology ?) • Why are some countries richer than others? • Why do some countries have high unemployment ? High inflation?

9. Why economics contains so much maths • In order to answer these questions and understand how agents make their decisions, economics models: • The decision making process of the agent • The flows of goods and services in the economy • We use models because it is impossible to understand directly the depth and complexity of human behaviour • This is what we’ll examine next week when we look at how models are used in science

10. Why economics contains so much maths • Example of Sir Arthur Lewis (Nobel prize 1979) on Dani Rodriks’ Blog • http://rodrik.typepad.com/dani_rodriks_weblog/2007/09/why-we-use-math.html • There is an apparent paradox: • « Maths are complicated » • In fact, it’s a simplification !! • In other words, we use maths because we’re not intelligent enough to do without !!

11. Why economics contains so much maths • Mathematics allows us: • To use a symbolic notation for all the variables in a given problem. • To develop notations and rules that define logical relations (logical operations are “codified”) • As a result one can carry out a complex series of logical operations without making mistakes, forgetting variables, etc.

12. Why economics contains so much maths • Which types of mathematics do economists use ? • Algebra, mainly solving equations • Part 2 • Calculus, mainly analysing the properties of functions • Part 3 • Statistics • Which we won’t see