▁of ▁mathemat icians . ▁App lied ▁mathemat icians ▁apply ▁mathematical ▁principles ▁to ▁practical ▁problems , ▁such ▁as ▁economic ▁analysis ▁and ▁other ▁econom ics - related ▁issues , ▁and ▁many ▁economic ▁problems ▁are ▁often ▁defined ▁as ▁integrated ▁into ▁the ▁scope ▁of ▁applied ▁mathematics . ▁ ▁This ▁integration ▁results ▁from ▁the ▁form ulation ▁of ▁economic ▁problems ▁as ▁st yl ized ▁models ▁with ▁clear ▁assumptions ▁and ▁f als ifiable ▁predictions . ▁ ▁This ▁model ing ▁may ▁be ▁inform al ▁or ▁pro sa ic , ▁as ▁it ▁was ▁in ▁Adam ▁Smith ' s ▁The ▁We alth ▁of ▁Nations , ▁or ▁it ▁may ▁be ▁formal , ▁rig orous ▁and ▁mathematical . ▁ ▁Broad ly ▁speaking , ▁formal ▁economic ▁models ▁may ▁be ▁class ified ▁as ▁st ochastic ▁or ▁determin istic ▁and ▁as ▁discrete ▁or ▁continuous . ▁ ▁At ▁a ▁practical ▁level , ▁quant itative ▁model ing ▁is ▁applied ▁to ▁many ▁areas ▁of ▁econom ics ▁and ▁several ▁method ologies ▁have ▁evol ved ▁more ▁or ▁less ▁independently ▁of ▁each ▁other . ▁▁ ▁Sto ch astic ▁models ▁are ▁form ulated ▁using ▁st ochastic ▁processes . ▁They ▁model ▁econom ically ▁observable ▁values ▁over ▁time . ▁Most ▁of ▁econ omet rics ▁is ▁based ▁on ▁statistics ▁to ▁form ulate ▁and ▁test ▁hypoth eses ▁about ▁these ▁processes ▁or ▁estimate ▁parameters ▁for ▁them . ▁Between ▁the ▁World ▁Wars , ▁H erman ▁W old ▁developed ▁a ▁representation ▁of ▁station ary ▁st ochastic ▁processes ▁in ▁terms ▁of ▁autor eg ress ive ▁models ▁and ▁a ▁determin ist ▁tr end . ▁W old ▁and ▁Jan ▁T in ber gen ▁applied ▁time