Economic

Optimisation in Economics: Motivational Quotes

Dr Damien S. Eldridge

Australian National University

21 January 2021

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Quote from Leonhard Euler

“For since the fabric of the universe is most perfect and the work of a most wise Creator, nothing at all takes place in the universe in which some rule of maximum or minimum does not appear.”

Leonhard Euler in the introduction to De Curvis Elasticis, Additamentum 1 to Methodus inveniendi lineas curvas maximi minimive proprietate gaudentes, sive Solutio problematis isoperimetrici latissimo sensu accepti (1744).

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Quote from Richard Caves

“Constrained-maximization problems are mother’s milk to the well-trained economist.”

From page 88 of Caves, Richard E (1980), “Industrial organisation, corporate strategy and structure”, The Journal of Economic Literature 18(1), March, pp. 64–92.

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Quote from Larry Ausubel and Raymond Deneckere

“Almost every economic problem involves the study of an agent’s optimal choice as a function of certain parameters or state variables. For example, demand theory is concerned with an agent’s optimal consumption as a function of prices and income, while capital theory studies the optimal investment rule as a function of the existing capital stock.”

From page 99 of Ausubel, LM, and RJ Deneckere (1993), “A generalized theorem of the maximum”, Economic Theory 3(1), January, pp. 99–107.

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Quote from Paul Samuelson

“The very name of my subject, economics, suggests economizing or maximising. · · · So at the very foundations of our subject maximization is involved.”

From page 249 of Samuelson, (1972), “Maximum principles in analytical economics”, The American Economic Review 62(3), June, pp. 249–262.

This journal article is the text of Paul Samuelson’s Nobel Memorial Prize Lecture from 11 November 1970.

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