# Quantitative Methods in Economy

- Credits: 5
- Ending: Examination
- Range: 2P + 2C
- Semester: summer
- Year: 3
- Faculty of Economics and Finance

## Teachers

## Included in study programs

**Teaching results**

Knowledge

By completing the course, the students develop basic analytical skills. They understand the use of quantitative methods and techniques in economics. They know how to use derivatives in solving optimization problems in economics, e.g., in determining the situation in which the profit or utility is at its maximum within the existing budget constraints. The students further understand the basics of economic modeling and economic analysis.

Skills

By completing the course, the students can compile and interpret a simple regression model. They understand the principle of experiment and natural experiment in the social sciences and understand the pitfalls of causal interpretation. They can evaluate the results of the experiment in Excel using basic statistical tools.

Competences

In seminars, analytical capacities are further enhanced by the ability to process various micro- or macro-data using basic statistical programs. They can interpret outputs correctly and derive recommendations for policy makers based on them. The students are able to use the acquired knowledge and skills in further studies, and also directly in economic practice.

**Indicative content**

Indicative content:

1. Introduction. Slope of a linear function

2. Solving optimization problems using partial derivatives. Derivatives of a function of one variable

3. Solving optimization problems using partial derivatives. Derivatives of a function of multiple variables.

4. Economic applications of derivatives of functions of multiple variables without constraints, the so-called unconstrained extremes.

5. Economic applications of derivatives of functions of multiple variables with a constraint in the form of equality, the so-called constraint extremes.

6. Solution of derivatives of a function of multiple variables with a constraint in the form of inequality, the so-called Kuhn-Tucker conditions.

7. Application of Khun-Tucker conditions in solving economic problems.

8. Introduction to the econometric analysis: the relationship between correlation and causality, hypothesis testing.

9. Experiments, natural experiments and quasi-experiments in social sciences.

10. Regression with quadratic term and logarithm.

11. Theoretical derivation of the so-called Diff-in-diff (differences in differences) model.

12. Application of a Diff-in-diff model to selected data. Interpretation of the results.

**Support literature**

E. Tipoe a R. Becker – Doing Economics, online: https://www.core-econ.org/doing-economics/

Wooldridge, Jeffrey M. Introductory econometrics: A modern approach. Nelson Education, 2016.

Chiang, Alpha C. "Fundamental metods of mathematical economics." (1984).

**Requirements to complete the course**

Evaluation during the semester and homework 40 %

Final exam 60 %

**Student workload**

Total study load 156 hours

Lectures 26 hours

Seminars 26 hours

Preparing for seminars and seminar homework 20 hours

Preparing for evaluations during the semester 32 hours

Final exam preparation 52 hours

**Language whose command is required to complete the course**

Slovak

Date of approval: 17.02.2022

Date of the latest change: 03.01.2022