The Origin and Limitations of Modern Mathematical Economics: A Historical Approach

We have first demonstrated that Debreu’s view regarding the publication of The Theory of Games and Economic Behavior by von Neumann and Morgenstern in 1944 as the birth of modern mathematical economics is not convincing. In this paper, we have proposed the hypothesis that the coordinated research programs in the 1930’s, initiated by the Econometric Society and the Cowles Commission for Research in Economics with the objective of unifying economic theory, mathematics and statistics, can be regarded as the beginning of modern mathematical economics as well as econometrics. We have argued that this unification has failed to satisfactorily bridge the gap between mathematical economics and the real world economic issues. However, contrary to Marshall's view that mathematics is not an engine of inquiry in economics but is only a shorthand language, we have established in this paper that the application of mathematics in modern mathematical economics can, under certain conditions, produce economic results of value.