Applications of Linear Algebra in Economics
摘要
One of the common questions students ask when studying mathematics is: Why do I need this? Where can I apply this? The same is true for students of economics. This is why in this chapter we list some applications of linear algebra and its seemingly abstract concepts in economics. We have already explored some key applications to economics, like determining market equilibrium and input-output analysis. In this chapter we shortly review the important applications we have seen so far, as well as outline some more applications, demonstrating how the seemingly abstract concepts of vectors, matrices, and determinants provide concrete insights into real-world economic problems. We provide some applications of linear algebra to microeconomics and macroeconomics, linear programming, game theory, econometrics and regression analysis, as well as dynamic economic models.