Re: Linear algebra applications in economics
- From: "Rusty" <rusty@xxxxxxxxxxxxxxx>
- Date: Tue, 2 Aug 2005 07:28:17 +0100
"Santiago Canez" <canez@xxxxxxxxxxx> wrote in message
news:dclqlr$184v$1@xxxxxxxxxxxxxxxxxxxxx
> Hello,
>
> I'm teaching a linear algebra/differential equations course this summer
> and would appreciate suggestions on applications of these topics I could
> mention. I've given applications of both linear algebra and differential
> equations to physics, engineering, chemistry, biology, and computer
> science, but applications to economics have alluded me. Can anyone give
> some concrete applications I could give my students? Specifically, I would
> appreciate an application of eigenvalues/eigenvectors to economics and an
> application of systems of linear differential equations (I already have
> matrix applications to input/output models and applications of partial
> differential equations planned).
>
AIUI financial predictions are a can of worms and stock markets especially
are not at all successfully handled by linear methods. See the book "The
Predictors" by Thomas Bass for an insight into the problems and how banks of
competitive neural networks and genetic algorithms were used to predict
currencies after many man years of mathematical research. But at best it's
only marginally better than human intuition - and that's on a good day.
So while you might successfully predict a sanitized computer model of a
hypothetically efficient financial market as an interesting academic
exercise, the same process wouldn't work on the real thing.
rusty
.
- References:
- Linear algebra applications in economics
- From: Santiago Canez
- Linear algebra applications in economics
- Prev by Date: Zeros and Poles of a Complex Rational Function
- Next by Date: Re: Additional info: polynomial representation .....
- Previous by thread: Re: Linear algebra applications in economics
- Next by thread: stadistical problem
- Index(es):
Relevant Pages
|
