L13614 Numerical Methods in Economics
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Module content| Aims and objectives | Module downloads | Lectures and tutorials | Assessment | Module texts
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Prerequisites: L11106 Quantitative Economics I or L11121 Mathematical Economics or equivalent
Credits: 15
Module content
The module considers computational (numerical) methods used in economics, demonstrating them on relevant economic applications. The methods and their computer implementation are explained using software packages. Applications cover a wide area of economics, both from microeconomics and macroeconomics.
The module will offer a unique opportunity for students to get acquainted with advanced methods of computation, and with computer programming and simulation methods, as applied in the analysis of economic models. How to solve a model that has many parameters and variables, is more realistic but impossible to solve using usual mathematical methods? How to make predictions about such a model? How to simulate more realistic models of economic systems and thus be able to say something about them? These are some of the questions the module is trying to address. The focus of the module is on the use of the computational methods in economics rather than on their derivation.
Topics that will be covered in the module may include:
Static Numerical Methods
- Numerical solution methods
- Numerical static optimization methods
- Applications: resource allocation, computable general equilibrium
Dynamic Numerical Optimization
- Discrete dynamic programming
- Implementation of the methods
- Applications: optimal growth, rational expectations, asset management
Agent-based Economic Modelling
- Basics of computer programming
- Foundations of agent-based models and simulation methods
- Applications: evolutionary games, markets
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Aims and objectives
Education Aims:
The specific aims of the module are as follows:
(i) To provide a detailed understanding of numerical methods used in Economics.
(ii) Develop an understanding of how the discussed methods can be applied to various economic problems.
Learning Outcomes:
By the end of the module, students should have enhanced their abilities in the following dimensions as detailed in the Programme Specification for BA Economics:
Knowledge and Understanding
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Apply core economic theory and economic reasoning to applied topics (A2)
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Show understanding of advanced analytical methods (A3)
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Show understanding of relevant mathematical and statistical techniques (A5)
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More extensive knowledge and skills of quantitative or theoretical modelling areas of economics (A7BSc)
Intellectual Skills
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Apply complex ideas to solve problems (B1)
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Reason logically and work analytically (B3)
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Perform with high degree of accuracy (B4)
Professional/Practical Skills
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Identify appropriate economic models (C1)
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Use appropriate techniques to solve problems (C2)
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Use appropriate IT packages effectively (C4)
Key/Transferable Skills
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Apply mathematical, statistical and graphical techniques in an appropriate manner (D1)
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Analyse and solve complex problems accurately (D3)
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Module downloads
Lecture slides and other material for this module can be found on WEBCT at http://webct.nottingham.ac.uk/webct/entryPage.dowebct - restricted to registered students only.
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Lectures and tutorials
Economics lecture timetables are available online in the Portal.
18 hours of lectures plus 2 computer classes and 2 tutorials throughout the semester. Students are to sign up to tutorial groups using Nexus.
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Module Assessment
Exam (75% - 2 hours) plus Individual essay (25%).
Previous Examination Papers and Feedback for all modules can be viewed online in the Portal but are restricted to registered students only. A password may be required to access this material.
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Module Texts
There is no textbook that covers the module topics sufficiently broadly and deeply. Therefore there is no one set text for the module. For a general set of topics that may be covered in the module, see:
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Kendrick, D., Mercado, P.R., Amman, H.M. (2006) Computational Economics, Princeton University Press.
For topics on Static and Dynamic Numerical Methods, the following books are relevant:
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Miranda, M.J., Fackler, P.L. (2002) Applied Computational Economics and Finance, MIT Press;
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Adda, J., Cooper, R.W. (2003) Dynamic Economics, MIT Press.
For Agent-based Economic Modelling, along with the Kendrick et al. book mentioned above, the following website contains a very good set of introductory materials:
More materials will be made available during the module. There are other Computational Economics books that may be useful.
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Further information
If you have any questions regarding this module please feel free to contact the lecturer. At the end of this semester, we would welcome your views on the organisation and content of this module.
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