Economics is not exactly a science and it is because it studies non-continuous situations where there can be a range of interpretations on them. On the other hand, quantitative economics makes use of tools from computer science and mathematical science for economic situations to be modeled in an effective manner. This branch of economics is a specialty of its own within the field. A quantitative economics assignment or case study uses numerous complex mathematical and statistical procedures to scrutinize economic developments. It includes:
- Probability theory
- Statistics
- Optimization theory
- Stochastic models
- Numerical analysis
- Algorithms
- Numerical analysis
These techniques greatly help economic analysts explain financial products and forecast economic conditions. These methods lend an empirical as well as quantitative support to economic theories that are usually conveyed in qualitative format. Quantitative economics refers to the formulation of many quantitative methods to investigate economic principles. Theoretical quantitative economics makes use of statistical properties whereas applied econometrics generally applies econometric methods to the numerous economic theories. Finance domain makes use of techniques like risk management and portfolio management.
Quantitative economics is used in the finance domain to assess quantitative problems and uses diverse techniques like:
- Probability theory
- Financial models
- Volatility estimation
- Capital asset pricing
- Risk-adjusted returns
Financial econometrics is, in fact, a combination of finance, economics, statistics, and mathematics science. There occur numerous problems in the financial world. In such cases, economics offers a theoretical foundation whereas statistics and applied mathematics render quantitative techniques to overcome these issues quantitatively. The massive amount of data produced in financial markets on asset returns, volatility generally requires keen observation and studying using time series technique. Quantitative economics is extensively used for derivative products like futures and options.
Identification:
The field of quantitative economics identified as econometrics by economists, which stands for economic measurement in a literal sense.
Types:
Regression analysis:Regression analysis is the primary analytical method of quantitative economics assignment. This studies the economic results as functions of one or more forecaster variables. Take this for instance; a regression equation might scrutinize the extent to which the listed below predictor variables forecast average income:
- experience
- education
- gender
- Ethnicity
Regression involves modeling and analyzing a variety of variables to establish a strong relationship between dependent variables and independent variables. This approach is advantageous to comprehend the changes in the dependent variable to any changes in the independent variable too. Other quantitative economic techniques include economic forecasting and cost-benefit analysis, methods of Moments and Bayesian methods. These approaches are used less when compared to a regression analysis.
Study of Quantitative Economics Assignment in MBA, Graduate and Post Graduate
Quantitative economics logically connects itself with hypotheses, unsettled explanations of solutions to the logical representation of real-life issues and situations. It makes up a systematic endeavor to set-theoretical assumptions about economic authenticity against experimental evidence produced by keenly observing that authenticity. A significant problem in this quantitative process is rendering theoretical concepts and practical measurements adequately conformable to justify their positions. In this economics concept, the importance is mostly given to the formation of hypothesis and testing.
Considerations:
Quantitative economic methods can find a reciprocal relation between variables like education and income, but they don’t provide evidence for causation.
Benefits:
Not only does quantitative economics provide empirical support to the economic theories, but also it helps in forecasting economic conditions, assessing the impact of economic policies, scrutinize the feasibility of government decisions, analyze the quality of business decisions and consider in detail the market conditions for business.
Steps involved in the quantitative approach:
Understanding the problem:This is the very first step and consists of the formulation of a hypothetical model to make a logical connection between two or more variables.
Collecting data:It involves the collection of all relevant data from public domains and any published information. It also consists of the group of data from surveys.
Selection of technique:In this step, you need to choose an appropriate estimation technique to proceed further. Methods include single or multiple equation techniques.
Statistical assessment:This step involves the formulation of assumptions for estimating parameters of the model and scrutinizing the appropriateness of the estimates concerning the data.
Assessing the model:In this step, the model is evaluated from a theoretical view.
Implementation of the model:The theoretical model is then used for the identified problem and also for making predictions in advance.
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- Knowledge of assumptions
- Knowledge of integrating data analysis and measurement
- Knowledge of appropriate research design
- understanding of data interpretation
- Knowledge of levels of frequency
Besides, students need to know how to blend the knowledge as mentioned above areas productively and feasibly in their research model. The simple concept of taking up basic economic paradigms is the central key to providing product solutions and impactful actions to combat all the broader problems of this commercial world. Take for instance; you don’t need to find a remedy to cure infectious diseases, but you need to scrutinize the right ways and take preventative measures. Implementing this pure perception will provide a huge relief to people these days for a reduced price. In spite of everything, the inherent value of reducing global issues is greater than the unconstructive externalities faced when dictating the anti-inflammatory. At times, the most money-spinning and ground-breaking models are those that are intuitive.
It provides them with a systematic knowledge of finance, economics, applied mathematics, and statistics. Also, it involves advanced application-oriented work and problem-solving approach in the areas as mentioned earlier. As the complexity of today’s’ global economy is increasing day by day, competition is also growing, and it is highly dependent on quantitative methods for scrutinizing financial developments and all other economic trends, quantitative economics assignment writing is very much helpful in your future career success in the finance domain. As a student, you need to be very confident about your writing skills and dynamic in research techniques.
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