The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Mathematical Methods in Political Economy

  • F. Y. Edgeworth
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1164

Abstract

The idea of applying mathematics to human affairs may appear at first sight an absurdity worthy of Swift’s Laputa. Yet there is one department of social science which by general consent has proved amenable to mathematical reasoning – statistics. The operations not only of arithmetic, but also of the higher calculus, are applicable to statistics. What has long been admitted with respect to the average results of human action has within the last half-century been claimed for the general laws of political economy. The latter, indeed, unlike the former, do not usually present numerical constants; but they possess the essential condition for the application of mathematics: constancy of quantitative – though not necessarily numerical – relations. Such, for example, is the character of the law of Diminishing Returns: that an increase in the capital and labour applied to land is (tends to be) attended with a less than proportionate increase in produce. The language of Functions is well adapted to express such relations. When, as in the example given, and frequently in economics (see Marshall, Principles, 5th edn, Preface, p. xix), the relation is between increments of quantities, the differential calculus is appropriate. In the simpler cases the geometrical representations of functions and their differentials may with advantage be employed.

Keywords

Calculus of variations Mathematical economics Mathematical method in political economy Simultaneous equations Statistics 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • F. Y. Edgeworth
    • 1
  1. 1.