Mathematical methods in economics are an important analysis tool. They are used in the construction of theoretical models that allow you to display the existing connections in everyday life. Also, using these methods, the behavior of business entities and the dynamics of economic indicators in the country are fairly accurately predicted.
In more detail I would like to dwell on the forecasting of indicators of economic objects, which is an instrument of the theory of decision making. Forecasts of the socio-economic development of any country are based on a mathematical analysis of certain indicators (inflation dynamics, gross domestic product, etc.). The formation of expected indicators is carried out using such methods of applied statistics and econometrics as regression analysis, factor analysis and correlation analysis.
The branch of research “Economics and Mathematical Methods” has always been quite interesting for scientists in this field. So, academician Nemchinov identified five mathematical research methods in planning and forecasting:
- method of mathematical modeling;
- balance sheet method;
- vector-matrix method;
- method of successive approximation;
- the method of optimal public assessments.
Another academician, Kantorovich, divided mathematical methods into four groups:
- Models of interaction between economic units;
- macroeconomic models, including demand models and the balance sheet method;
- optimization models;
- linear modeling.
Modeling of economic systems is used to make effective and correct decisions in the economic sphere. In this case, modern computer technology is mainly used.
The simulation process itself should be carried out in the following order:
1. Statement of the problem. It is necessary to clearly formulate the problem, determine the objects related to the problem being solved, and the situation that is realized as a result of its solution. It is at this stage that a quantitative and qualitative analysis of subjects, objects, and situations related to them is performed.
2. System analysis of the problem. All objects must be divided into elements with the definition of the relationship between them. It is at this stage that it is best to use mathematical methods in economics, with the help of which a quantitative and qualitative analysis of the properties of newly formed elements is carried out and as a result of which certain inequalities and equations are derived. In other words, we get a scorecard.
3. System synthesis is a mathematical statement of the problem, during the organization of which a mathematical model of the object is formed and algorithms for solving the problem are determined. At this stage, there is a possibility that the adopted models of the previous stages may turn out to be incorrect, and in order to get the right result, you will have to go back one or even two steps.
Once the mathematical model is formed, we can proceed to the development of a program to solve the problem on the computer. If you have a fairly complex object, which consists of a large number of elements, you will need to create a database and available tools to work with it.
If the task takes a standard form, then any suitable mathematical methods in economics and a ready-made software product are used.
The final stage is the direct operation of the formed model and obtaining the correct results.
Mathematical methods in economics should be used precisely in a certain sequence and with the use of modern information and computing technologies. Only in this order does it become possible to exclude subjective volitional decisions based on personal interest and emotions.
