Studying Economics at LSE
Economics. Few people understand what the word really means, let alone what studying it for three years would be like. Is it just graphing the trends of the stock market? Or talking about why GDP’s bad whilst proposing no alternatives? Or studies of why countries remain poor whilst providing no hope for their development? Whilst some of the common cliches about economics probably have merit (you do spend a decent amount of time looking at graphs!), I honestly think it is the most interesting subject to study due to its wide ranging application.
So, the three key components of a high level economics degree are microeconomics, macroeconomics and econometrics. I’ll briefly talk about each of these (each will be an oversimplification but should give a general picture!).
i) Microeconomics provides your building blocks. It allows you to construct these big macro models of the economy by giving a picture of how firms and consumers behave. It is more mathematically driven than macroeconomics, and has more of the slightly strange assumptions you see in economics. It often gets a bad reputation, but is basically trying to model human decision making in different circumstances.
ii) Macroeconomics focuses on the things that we more often associate with economics. Exchange rates, interests rates, central banks, inflation, how people’s expectations change etc. It is personally my favourite bit of studying economics because it allows you to understand how the world functions better. Lots of what you learn is in the form of models, which is why economics is often associated with graphs, but these are usually used to represent a finding from some data.
iii) Econometrics wasn’t something I’d really heard of before university. It’s a really important part of economics but until you get to degree level, it stays behind the scenes. Have you ever read the news and they’ve made a pretty big jump that leaves you doubting the truth of the piece? Like when they make an assertion about something causing something else that you’re just not sure is accurate.
This is what econometrics deals with. It says, yes, going to a good university might be correlated with earning more in the future, but that doesn’t necessarily mean it causes it, for example. Look up some strange correlations and you’ll understand what I’m saying! Econometrics tries to establish causal economic relationships. If you want to understand whether building wells has a significant impact on poverty, or leaving the EU will make the average person poorer, or how interest rates affect the stock market, you’re going to want the tools you learn in econometrics.
I hope that’s given you a brief overview of the fundamentals. These aren’t the only things you study on an economics course. There are loads of different specialisms and areas you can go into because of the breadth of the field. For example, I’ve studied the economic history of Latin America this year, learning about colonialism to gang violence and everything in between. Next year, I’ll be studying development economics and political economy, allowing me to better understand the developing world as well as political systems across the globe.
I thought for my final paragraph I’d give two disclaimers. Firstly, maths. A lot of people worry about studying economics because of the mathematical element. These worries are somewhat merited. Economics courses normally do require you to be able to use numbers . However, in my course at least, we were given lots of practice in the first year and so this didn’t present too big a problem for most people. Secondly, working with data. This might seem similar to the maths point, but it’s subtly different. Studying economics sometimes requires you to use statistical software to work with data. This can seem a bit daunting. However, I had no experience of this prior to university and have fared fine, so don’t let this hold you back!
I’m entering my third year studying economics at LSE. In the first two years, I’ve decided that economics is challenging but fascinating. You learn amazing transferable skills – working with data, words and models is not a combination that you get in many other courses which is what makes economics graduates so employable. But, more importantly, you learn to understand the world and the irrationality of human behaviour much better.