Oxbridge Economics Interview: 'The Dismal Science'

You walk into your Oxbridge Economics interview, not really knowing what to expect, and the Professor of Econometrics and Mathematical Economics in-front of you cuts into the conversation with a faint smile and a gentle shrug: “So, tell me about the ‘dismal science’?”

Now, if all is well, you will happen to recall that it was Thomas Carlyle who first coined the phrase the ‘dismal science’ in reference to the discipline of Economics. And with that as the starting point, you go on to share your own understanding on this matter: examining the ways in which Economics may be deemed ‘dismal’, and exploring the sense in which Economics is an inexact science.

But surely it would have been almost impossible to prepare for such a question in advance? I agree. Nonetheless, I believe that there are a few things you can do to increase your chances of success…

1. Make sure that you really work on your Personal Statement, in terms of getting across your interest in the subject and conveying your aptitude for the subject. More importantly, sending off the Personal Statement is not the end of the matter! Oxbridge interviews will very often hone in on certain elements of your personal statement. So if you mention a certain book you’ve read (e.g. Stiglitz’s ‘Globalisation and its Discontents’), or a specific theoretical point (e.g. the ‘multiplier effect’), be prepared to talk about them.

2. Try to develop a good grasp of a broad range of basic theoretical topics in Economics (if possible), and be comfortable with Mathematics (Cambridge tends to place more onus on A-level Mathematics & Further Mathematics than A-level Economics). And try to delve a little deeper into technicalities if possible. Be exact with definitions.

For example, one way to go about the definition of (or rather the intuition behind) ‘the dead-weight loss of a tax' would be in terms of "the amount in excess of the tax revenue that those whom the tax (incidence) falls on would pay for the removal of the tax".

As strange as that definition might appear to a non-economist, the central idea connected with this definition and what we mean by a 'dead-weight loss' hinges on the inherent inefficiencies connected with taxes. For example, an emissions tax which generates £127m in tax revenue for the government may well impose costs to consumers/producers/government in terms of higher prices/higher production costs/enforcement costs which actually exceed the total tax revenue raised. If the cost to those affected is greater than the benefits (tax revenue raised does not always constitute all boons to a tax), then those that are affected would be better off if they paid a financial sum that was just less than the total costs that they bear, but this financial sum will still (typically) be greater than the benefits (typically in terms of tax revenue raised). Those affected inimically would in fact be willing to pay an excess amount just to have the tax removed. This is effectively the 'dead-weight loss' that captures those costs imposed as a direct result of tax inefficiencies.

3. Follow current affairs (e.g. via ‘the Financial Times’ (FT)/’the Economist’/other online sources), so that if a question comes up relating to the current economic climate, you would be prepared to present a good answer.

Of course, it isn't necessarily viable to read the FT everyday, or even to thoroughly read through a weekly edition of the Economist each week, but there are certain sub-sections that may be worth dwelling into: I would recommend choosing a few key columns that interest you within the FT (and making sure to maintain at least some focus and acknowledgement of the most influential political, social and economic events taking place globally); the summary pages at the start of each regular edition of the Economist on key Political and Business developments are certainly worth browsing through, as well as attempting a more academic reading of some of the content from the Economics & Finance section towards the back.

It is also worth noting that the very back of each standard edition of the Economist magazine includes a couple of pages with key Economic statistics, which can be informative and helpful in terms of offering some insights into how individual economies are performing within the given macroeconomic conditions at a point in time. Tracking the changes to and evolution of these statistics over time can be especially interesting. Indeed, this is exactly the kind of thing that would genuinely fascinate the inquiring mind of a budding economist.

When we start to come to look at these stats, there will be macroeconomic variables such as inflation/unemployment that we start to become familiar with even within A-level/IB/GCSE Economics; but is is worth noting that these variables can be measured/computed in differing ways (e.g. CPI/HICP/RPI(X)/PPI...).

One very particular pair of metrics, featured at the back of the Economist magazine, would have caught my interest in the early days of my own student years: 'corporate bond yields' labelled either as 'high-yield' or 'investment grade'. The corporate bond yields allow us to gauge the prevailing market interest rates with which businesses borrow at. Higher interest rates will typically signal lower levels of business optimism or economic conditions that might make lenders more cautious (this could include corporate/investment banks). But in-fact the term 'high-yield' is linked typically to small/medium sized enterprises (SMEs) that are riskier prospects, hence higher rates of interest/higher returns for prospective lenders; whilst 'investment grade' yields are more in line with much larger corporations, or blue-chip companies, that are much lower risk businesses to lend to or invest in.

It is particularly important to aim towards developing your own critical take on the articles that are published, it is possible that the same global politico-economic event may be rendered with quite different forms of economic analysis and viewpoints even when we just compare the FT with the Economist.

There are many other online resources, including various website platforms, YouTube channels, blogs, podcasts and more that are worth dipping into. One of my personal favourites has been the YouTube channel 'ColdFusion' (https://www.youtube.com/@ColdFusion); and a website-recommendation for some of you who may wish to delve more deeply in your academic pursuits: https://www.econlib.org/

(The Library of Economics and Liberty is an online-library with extensive resources that are freely available to access for all, including ebooks to a plethora of classics within the domain of Economics, as well as for the Social Sciences).

Oxbridge interviewers are trying to see how you approach and think through questions.

So it is important that you present your ideas and thought processes in a clear manner. Even if you get a question wrong, a good direction-of-approach and logical steps to solving the problem may be more favourably received than a 'correct' answer lacking demonstration of genuine understanding.

Stay confident, keep your composure, and may luck be on your side!

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