Optimization Modeling of Economic Systems

Course Description:

The focus of the Optimization Modeling of Economic Systems course will be on the theoretical and practical aspects of mathematical programming and on the formulation of mathematical models with a primary focus on optimization models. This is a hands-on model building course.

Topics will include a review of optimality conditions and convex analysis for nonlinear programming and a variety of approaches to modeling. The modeling section of the course will include models of the consumer, the producer and the sector. Non-parametric efficiency testing will be included.

Students will Learn:

  • To use the General Algebraic Modeling System (GAMS) computer language effectively to formulate and solve mathematical models of economic systems
  • How to avoid implementation pitfalls and how to anticipate the qualitative behavior of models before they have been built

Course Modules:

Module 1 – Introduction of Mathematical Programming in Applied Economics and GAMS

  • Learning Objective: Assess mathematical programming in applied economics and how it is used, analyze the GAMS language, and generate the code and output for the Transportation problem.

Module 2 – Overview of the GAMS Language via Examples

  • Learning Objective: Explore the background, basics (object types, structure, naming convention, etc.), sets, and parameters of the GAMS language.

Module 3 – More Examples of the GAMS Language

  • Learning Objective: Evaluate GAMS parameters and manipulation and conditional assignments, define variables and equations, model and solve statements, compute principle model types and sets, and refine the GAMS language.

Module 4 – Mathematical Fundamentals

  • Learning Objective: Separately evaluate convexity of sets and convexity of functions, and demonstrate univariate functions, and multivariate functions.

Module 5 – Convex Programming Problems

  • Learning Objective: Utilize the building blocks for economic models and interpret Lagrange Multipliers.

Recommended Background:

  • Professionals interested in applied economic analysis that have completed an undergraduate degree with a strong mathematics background

Other Courses in the Series:

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