Issue 13

An Interview with…

Emma Yusuf

What prompted you to become interested in mathematical modelling - When I tell others that I want to do maths at university, people often say that it is too theoretical, too fundamental, and that I will never use it in real life but modelling is one of the more obvious cases where this is not true. Modelling has been used to predict the spread of Covid, calculate the volatility of the market, and it is such a useful tool that creeps up in everyday life whether you realise it or not.

Tell us more about your EPQ Project on Bayesian Statistics - Bayesian statistics is essentially where you have a prior probability and then you do a bunch of probability theory conditionalisation and then you have a posterior [the statistical probability that a hypothesis is true calculated in the light of relevant observations]. So you are basically taking into account whether your subjective prior probabilities are going to influence a future outcome. I looked into whether this justified and whether it stands up to the scientific method because it does introduce an element of subjectivity.

Do you think there is a danger that we are moving towards a global economy increasingly built upon models? - These models will always need a level of sensitivity analysis. Because there are so many unknowns and so many factors at play you’ll always need people implementing a checking system and operating them. There is an argument that jobs will be destroyed but I think that it is more that jobs will be changed.

What advice would you give to people looking to start learning mathematical modelling? - Go to YouTube! YouTube helped to teach me and it will really be your best friend when trying to learn about modelling.

What do your career aspirations look like? - I would like to go into investment banking. In an ideal world, I would love to be a quant, though I do hear how difficult it is. I’m still exploring my options and am not set on anything but have upcoming work experiences and have been networking to help me find out more about different paths.

What have you learned from taking part in extracurricular activities? - I used to swim when I was younger, representing Brunei internationally and training 10 times per week or so. You get a sense of discipline that you can’t get from anything else. The hard work and commitment teaches you something that is invaluable in later life and you obtain such a ‘just do it’ attitude that really helps with not procrastinating.

You want to do maths and philosophy at university, how does that tie into your interest in economics and finance? - Maths and philosophy are thought of as really fundamental subjects but the reason I like these two subjects is how they can be applied into the real world. I think that is the same with economics as it is such an important subject which affects all aspects of your everyday life. Though maths and philosophy are thought of as really abstract, I think they are still incredibly applicable. I am a big fan of logical positivism [see: Definition] so I think there is little point in having these philosophical discussions unless we can apply them more broadly to the real world.

What do you think are the main barriers for women going into male dominated fields? - This is a difficult question to answer: is it a choice that women don’t go towards STEM subjects, or are they not being given the opportunities to do so. I think the real issue lies in the disparity between the number of women studying STEM subjects at university and then the number who go on to take on jobs within these fields. This, to me, is indicative of systemic barriers that women do face, even after making the decision to go on to study something like physics or maths at university.

Who is your biggest inspiration? - I am inclined to say my brother. My brother has had to navigate the world of going on to university by himself and he has passed on what he has learned to me. In a way he has been like a mentor and I am very grateful for him passing on all of these little tidbits that he has learned along the way because it has really helped me.

What is your biggest piece of advice for someone wanting to learn more about economics? - I would have to say just read the news. I don’t do economics at a level so everything I know comes from reading the news and listening to podcasts (the Freakonomics podcast is particularly good!). I think with economics it is just about having an interest in the subject and seeking out information.

A deep dive into…

Why Economists Seem to Always Get Things Wrong!

Economists are often tasked with predicting and analysing complex economic phenomena, yet their forecasts and assessments sometimes miss the mark. This deep dive delves into the underlying factors contributing to why economists frequently get things wrong, despite their expertise and employment of sophisticated models.

Economics operates within intricate systems influenced by numerous variables, making accurate predictions challenging. Economic variables are hugely interconnected, and changes in one area can have unforeseen ripple effects across the entire system. As well as this, economic systems often exhibit non-linear behaviour, where small changes can lead to disproportionately large outcomes, adding to the difficulty of prediction.

Traditional economic models often assume rational behaviour, but human decisions are influenced by emotions, biases, and heuristics. People often mimic the actions of others, leading to herd behaviour that can create market bubbles or crashes, challenging economists' ability to anticipate market movements.

Individuals and firms, furthermore, often make decisions based on incomplete or imperfect information and economists are heavily reliant on simplified models to analyse complex phenomena, but these models necessarily involve assumptions that may not always hold in the real world. For example, economic theories often use the ceteris paribus (all else being equal) assumption, which simplifies analysis but may overlook important real-world dynamics and interactions. Some economic outcomes also involve true uncertainty, where probabilities cannot be assigned, challenging traditional risk-based forecasting methods.

As anyone who has studied economics will be familiar with, government policies can have intended and unintended consequences, making it difficult for economists to accurately forecast their impact on the economy. Political agendas and biases can also influence economic analysis and forecasting, leading to distorted predictions or policy recommendations.

While economists employ sophisticated models and analytical tools, the inherent complexity of economic systems, human behaviour, and the unpredictable nature of events contribute to why economists frequently get things wrong. Recognising these challenges can lead to more accurate and nuanced economic analyses, acknowledging the limitations of economic forecasting while striving for continuous improvement in understanding and predicting economic phenomena.

5 Daily Articles

1. Green Energy is Booming in the US

2. World’s Biggest Economies are Funding Fossil Fuels in LEDCs

3. HSBC Sells Argentina

4. Uncertainty Grows Surrounding Fed Rate Cuts

5. Will Taylor Swift prop up the UK Economy?

Quick-Fire News

Opportunity Corner

Summer Internship with the Institute of Economic Affairs. Apply by 1st June for the Summer 2024 cohort.

Ages 18+ currently studying at university or with an offer to study from September 2024.

That is all for this issue, remember to share Girl Economics with anyone you think would enjoy reading it! See you in the next issue,

Erin McGurk