Category Archives: Math and Statistics

Assorted Links (7/19/2010)

Here’s a list of articles that I have been reading lately:

David Cameron: A Staunch and Self-Confident Ally –

“British Prime Minister David Cameron writes in The Wall Street Journal that the U.S. and Britain have a clear common agenda: succeeding in Afghanistan, securing economic growth and fighting protectionism.”

You Don’t Have to Pay for Cable TV

“The average cable subscription costs $900 a year, but you can radically reduce that amount and still watch everything you want.”

Leeds: Chew on this: There is no surplus fairy for Social Security

Here’s the bottom line from Sandy Leeds’ editorial, published in today’s Austin American Statesman:

“The bottom line is that we’re in trouble. Social Security is woefully underfunded and Medicare is an even larger problem. This is going to increase the amount that we’re going to have to borrow from investors – and there’s no certainty that investors will always be willing to lend to us. Most importantly, we’re never going to solve these problems until the electorate understands the issues and starts to pressure our elected officials into making the hard (but right) decisions. We’re not doing anyone any favors by convincing them that we have “built up a big trust fund.””

Economics One: New Data Show the Debt Problem Is Spending (not Taxes) and Obamacare Worsens the Problem

Quoting from Stanford Professor John Taylor’s Blog (Economics One): “Everyone now seems to agree that the exploding federal debt is a serious problem that must be addressed. But how? The following … charts provide some data to help answer that question.”

Review & Outlook: A Climate Absolution? –

“A Wall Street Journal editorial says the global warming alarmists still won’t separate science from politics.”

Firms cancel health coverage

Here’s what we have to look forward to as Obamacare starts to come “on line” (Massachusetts passed so-called Romneycare in 2006, and Obamacare structurally closely resembles Romneycare, only on a national as opposed to individual state level)… “The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budgets”.

Studying a Suicide Cluster at Foxconn – The Numbers Guy – WSJ

“To analyze whether a recent spate of suicides at a set of Chinese manufacturing facilities represents an unusual outbreak, it helps to make the right comparisons.”

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On the use of math in economics (version 2.0)…

In response to my previous posting entitled “On the use of math in economics…”, my colleague Allen Seward pointed out the following quote to me (Attributed to Alfred Marshall; see Todd G. Buchholz, 1989, New Ideas from Dead Economists, New York: Penguin Group, p. 151.):

In a letter to his protégée, A.C. Pigou, he [Marshall] laid out the following system: “(1) Use mathematics as shorthand language, rather than as an engine of inquiry. (2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life (5) Burn the mathematics. (6) If you can’t succeed in 4, burn 3. This I do often.”

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On the use of math in economics…

As I prepare my course in managerial economics, I have tried to put myself in my students’ shoes and ask why all the math?  This is a particularly relevant question because my students are enrolled in Baylor’s executive MBA program, and they (quite understandably) have no interest in becoming professional economists. 

In his recent blog entry entitled “Mathematics and Economics”, Paul Krugman notes, among other things, that “Math in economics can be extremely useful”, and that math can serve an essential analytic function by helping to clarify one’s thoughts.  Some other samplings from the economics blogosphere include the following observations:

  1. Greg Mankiw (cf. notes, among other things, that “Math is good training for the mind. It makes you a more rigorous thinker.”
  2. Jason DeBacker (cf. makes the following observations: “Math provides a common language for economic thought”, and “Math helps to quantify tradeoffs.”  He also notes that “Using math puts in plain sight the assumptions that lie behind a model and the mechanisms at work in the model”, which is consistent with Professor Krugman’s observation noted above.

However, I am also reminded of the famous quote “it is better to be vaguely right than precisely wrong” which is commonly (and incorrectly) attributed to the famous economist John Maynard Keynes. (For what it’s worth, O’Donnell (2006) notes (see p. 403, footnote 14) that “This saying so aptly captures a strand in Keynes’s thought that he is frequently, but wrongly, treated as its author”; apparently, the original source for this memorable quote was a contemporary of Keynes by the name of Wildon Carr (see Shove (1942: 323)). 


O’Donnell, R., 2006, “Keynes’s Principles of Writing (Innovative) Economics,” Economic Record 82 (259), 396-407.

Shove, G.F. (1942), “The Place of Marshall’s Principles in the Development of Economic Theory,” Economic Journal, 52 (208), 294–329.

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