mathematical economics

[srabani nath]

uses of taylor and mclaureins series in economics

[duck]

Hi.. :)

While studying the behaviour of complicated functions, we approximate it by a simpler function to make the analysis simple using Taylor Series.
If the Taylor series is centered at zero, then that series is called a Maclaurin series.
In some contexts of economics, we do linear approximations.
Eg: In Macro, We linearise around the steady state to confirm about the local behaviour of steady state.
Basically, the usefulness of Taylor series is that it helps in making things simple.