Young Economics

Mathematics, Economics and Business

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Preliminary Mathematics

Linear Algebra

Stochastic Calculus


See also Computing

A wide variety of empirical methods are popular, such as

However, they do the same thing: they pick free parameters of the model to make it fit best, which usually means to minimize model fitting errors; and they evaluate the model by examining how big those errors are.



Machine Learning

Machine Learning deals with Data mining, Pattern recognition, Learning (supervised, unsupervised, reinforcement)

See the full document at Machine Learning

Modeling, Hypothesis, Supervised Learning

Modelling includes investigation, theorizing, fitting theories to the world. Mathematical Modeling  Modeling Types

Scientific Modeling


Economic Modeling

In economics, a model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them (parameters and endogenous/exogenous variables). The economic model is a simplified framework designed to illustrate complex processes, often using mathematical techniques.

  • observe empirically the Data, thus inducing Facts (Fact Finding)
  • develop a theoretic model on the top of Facts.
  • test the model empirically with Data or simulate the model to see the impact. (Testing)


  • Cobb–Douglas model of production
  • Solow–Swan model of economic growth
  • Lucas islands model of money supply
  • Heckscher–Ohlin model of international trade
  • Black–Scholes model of option pricing


  • Stochastic vs. Deterministic
  • Accounting model
  • Optimization models (unconstrained and constrained)
  • Aggregate models


  • Assumptions - Restrictive, unrealistic
  • Omitted details
  • Are economic models falsifiable?

Financial Modeling


Accounting models, which are built around financial statements

  • Business valuation -

Financial models

  • Contingent Claims Pricing
  • Portfolio optimization
  • Real Options
  • Risk modeling - Market, credit, operational VaR (Value at Risk)


  • Although spreadsheets are widely used here also (almost always requiring extensive VBA), custom C++ or numerical analysis software such as MATLAB is often preferred


  • Unordered List Item
data/data_science.txt · Last modified: 2016/09/21 16:58 by admin