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A QE team won praise from the judges for their multi-faceted presentation at the final of an Economics competition run by one of the country’s oldest thinktanks.

The team of four sixth-formers, including the co-presidents of QE’s Economics Society, were shortlisted among the final 12 teams for the final of the Budget Challenge run by the Institute of Economic Affairs (IEA).

Praising the boys on their contribution, QE’s Head of Economics Shamendra Uduwawala said: “Many of the finalists decided to concentrate on single policies whereas the QE boys decided to focus on multiple policies tackling different issues.”

Although the team were not among the eventual winners, Dr Stephen Davies, Head of Education at the IEA, praised their work as “very detailed and well worked-out”, saying: “I liked the presentation and [it was] very strong on an individual level.”

The QE team chosen from Year 12 by Mr Uduwawala consisted of Economics Society co-presidents Rishi Shah and Hanif Gofur, together with Neel Shah and Rushil Shah. They were competing against schools including Harrow, Repton and North London Collegiate School.

For the challenge, each team had to prepare a budget for the UK in the coming financial year, with taxation and spending policy, as well as more briefly analysing the macroeconomic conditions and setting out a broad policy and strategy in response to these.

Rishi said: “We prepared a 5,000-word budget and constructed new policies to address Brexit uncertainty, the UK’s ageing population, the global growth slowdown and Industry 4.0 revolution. Our policies included; eNHS (a centralised online platform for the National Health Service), Project Unicorn (a technology start-up accelerator programme to scale-up new firms into market giants) and a reduction in stamp duty to name a few.”

The final, which was held at the IEA’s Westminster base, began with an introduction from Dr Davies, who recently delivered a lecture at QE on game theory. He discussed the history of the IEA, which was founded in 1955 based on a vision from economist Friedrich Hayek and now reports on economic affairs.

Then the competition began, with each of the 12 teams being asked to give a ten-minute presentation on their budget, followed by a ten-minute cross-examination by the judges. Soon after lunch – a ‘grand buffet’ – came the presentation for the QE team.

“We delivered our vision for the future of the economy and outlined our main policies,” said Rishi. “The judges then questioned our polices in detail and posed questions such as: ‘Why not scrap stamp duty instead of just reducing it?’ to which I answered that the long-term goal is to reduce stamp duty over time and eventually bring in an annual land value-based tax. They also questioned the potential ‘cyber security threat to the eNHS’, to which we replied that blockchain technology would be used to prevent data breaches.”

During lunch, the competitors listened to a talk from Rebecca Lowe, who is the Director of FREER – a major new initiative from the IEA promoting a freer economy and a freer society. She tackled the question ‘Is democracy worth it?’

She argued that democracy isn’t the realisation of an ideal society; instead it is more of a process. She then moved onto the relationship between democracy, the rule of law and the judicial system.

After all the presentations, there was a talk from Dr Kristian Niemietz, the IEA’s Head of Political Economy, who explained some of the key phrases frequently heard in the EU debate. He noted that the implications of Brexit will be on trade, immigration and regulation, as leaving the customs unions and the European single market would end the free movement of people. He used the analogy that the EU is not like being a Netflix subscriber, where either one is, or is not, subscribed. Instead, the EU is a great deal more complex, with many different parts and subsections, and one can be in each of them without being in all of them.

A visiting historian and economist set out how game theory applies across a very wide range of human activity in a lecture to senior boys – while also giving his own views and predictions about Brexit.

Dr Steve Davies is Head of Education at the Institute of Economic Affairs and has previously held academic roles in both the UK and US. He has authored several books, including Empiricism and History (Palgrave Macmillan, 2003) and was co-editor with Nigel Ashford of The Dictionary of Conservative and Libertarian Thought (Routledge, 1991).

In his lecture to senior boys, he illustrated applications of game theory in football, TV game shows and in oligopolies (where a market or industry is dominated by a small number of large sellers). Game theory is the study of mathematical models of strategic interaction between rational decision-makers.

Shamendra Uduwawala, Head of Economics, expressed his gratitude to Dr Davies for his visit, saying: “Game theory is a fascinating area of study, and he contributed significantly to our boys’ understanding of it by using such diverse and interesting examples. It was also good to have his own, well-informed perspective on Brexit, which complemented the lecture given here recently by Clément Leroy, a Research and Policy Engagement Associate from UCL’s European Institute.”

Himself a keen Manchester City fan, Dr Davies chose the penalty shoot-out at the end of the 2008 Champions League final between City’s local rivals Manchester United and Chelsea to illustrate game theory in the sport. United won the match after the team’s goalkeeper Van der Sar first pointed to his left, but then dived to his right, correctly guessing that Chelsea’s Nicolas Anelka would shoot that way. Van der Sar saved and United duly won European football’s top prize.

Dr Davies also looked at game theory in the game show, Golden Balls, and at the dilemma faced by two suspects interrogated for crimes, where they must choose whether the best thing for themselves is to confess, stay silent or betray the other prisoner.

Turning to oligopolistic markets, he examined the issue of such markets involving just two firms. Both firms could benefit from both having high prices, but one will always try to undercut the other firm by lowering prices, he pointed out. This problem could be overcome by collusion, although that is illegal.

Dr Davies also digressed to talk about Brexit. Stating that there was an impression of widespread panic about it within business, he blamed the media because he said they were predicting – incorrectly, in his view – that desperate shortages are inevitable. In terms of companies stockpiling, this is usual in any time of uncertainty and is not uniquely or solely about Brexit.

Alluding to the current febrile political atmosphere, with much plotting going on in Westminster pubs, he noted the similarity to the 1885 general election, the first to be held after an extension of the franchise which meant that for the first time, a majority of adult males could vote.

There would be, he predicted, no second referendum, since a majority of Parliament is against it. A cross-party deal will form – to secure outcomes such as ‘Norway plus’ or continuing membership of the customs union – but he forecast that major splits will continue to happen as the March 29th Brexit deadline approaches.

A team of five Year 12 QE economists was the only one to turn a profit in an auction at a prestigious conference attended by over 200 delegates from a number of leading schools.

More than 30 QE boys attended the Economics Conference at Woodhouse College in North Finchley, which aimed to offer pupils a unique opportunity to hear directly from academics, researchers and policymakers.

The event was jointly organised by the college and the National Institute of Economic and Social Research (NIESR); it was supported by supported by blue-chip organisations including The Bank of England, The Royal Economics Society, The Government Economics Service and several top universities.

QE’s Head of Economics Shamendra Uduwawala said: “This type of event not only allows our boys to hear directly from both leading academics and those who shape policy, but it also enables them to mix with their peers from other schools. There is no doubt that a conference such as this exposes boys to high-level thinking while reinforcing what they have been learning in the classroom.”

Professor Jagjit Chadha, the Director of NIESR and a Fellow of Clare College, Cambridge, delivered a truncated version of his recent Brexit talk to the Commons Select Committee on Brexit.

QE pupil Rishi Shah, one of the joint Presidents of the School’s Economics Society said: “For me, this talk was the highlight of the day; it was about forecasting and the role it plays in predicting the outcomes of Brexit. Professor Chadha used the metaphor of rolling a dice to show how forecasts can be rational, accurate yet wrong. He gave an insight into the work that NIESR conducts in forecasting and mapping out the likely outcomes of Brexit and the rationale behind the effects of business uncertainty.”

In her lecture, Financial Stability: a fine balancing act, Dr Rhiannon Sowerbutts described her role at the Bank of England as a Senior Economist and advisor to the Financial Policy Committee. She spoke about the importance of identifying potential risks to financial stability, such as household debt rising faster than incomes.

Dr Babak Somekh, from the University of Bristol. led an auction activity in the afternoon, involving food items. The delegates were split into teams of five. Year 12 pupil Hanif Gofur, who is the other joint President of QE’s Economics Society said: “We didn’t know in advance which food item would be auctioned next, so all the teams were kept on their toes. The atmosphere became electrified and chaotic as bids between schools intensified – often beyond the bounds of rationality.” Hanif and his QE teammates held their nerve and turned a healthy £250 profit on their £2,500 budget – the only team to make a profit.

Sarah Billingham, an Assistant Economist at the Department for Business, Energy and Industrial Strategy, promoted a new Degree Apprenticeship offered by the Government Economics Service in her lecture, How can economists influence policy? She suggested to delegates that this programme could be a good option for aspiring economists aiming for a higher education qualification who wished to avoid student debt and the loss of three to four years of potential earnings.

The day was concluded by Dr Lea Samek, of Kings College London, and Dr Michela Vecchi, of the University of Middlesex, who respectively looked at the UK’s productivity performance since the financial crash of 2008 and the impact of automation on the UK labour market.
Rishi said: “Overall, it was a phenomenal experience to hear from many different renowned speakers and it most definitely piqued my interest in Economics.”

In addition to delegates from QE and the hosts, Woodhouse College, there were pupils from Dame Alice Owen’s School, Highgate Wood School, The Camden School for Girls and Fortismere.

Only a few short months after starting his job as a Civil Service economist, Old Elizabethan Andrei Sandu was already advising a Government Minister at a European summit, he told senior boys at a special lunchtime lecture.

Andrei (OE 2007-14) took up his role in August last year with the Department for Business, Energy and Industrial Strategy (BEIS) as part of the economists’ group of the Civil Service Fast Stream. By the autumn of 2017, he was called upon to attend a Council of Ministers summit in Brussels, where he advised Lord Henley, of BEIS, throughout the session.

“There are few jobs where just four months in you are able to shape UK policy and EU law,” he told the boys as he promoted Civil Service careers. After his lecture, he also conducted a number of mock interviews with pupils considering studying Economics at university.

Thanking him for his visit, Head of Year 13 Michael Feven said: “This was an ideal opportunity for boys to hear about an interesting and rewarding career path in economics.”

After leaving QE, Andrei read Economics at Durham, where he gained a first-class degree last year.
In broad terms, he set out for the lunchtime audience both the departmental structure of the Civil Service and his own role, which involves advising the Government of the day and supporting it in implementing its plans, while remaining politically neutral. He also provided information about BEIS, including the history of the 2016 merger of the Department of Business, Innovation & Skills with the Department of Energy & Climate Change to form the new department.

His role at BEIS is as lead economist working on EU energy regulations, analysing draft laws and regulations to explore which aspects the UK would consent to and which it would want to see amended. He considers factors such as how much implementation would cost, the likely policies required to achieve particular targets and how measures should be phased in – whether, for example, to stipulate even progress each year or whether instead to specify an incremental build-up.

Andrei will return to QE on 22nd November for the School’s annual Careers Convention, where he will give his support and advice to boys in Year 11 beginning to think about their future career paths.

Six Year 12 pupils came third in the national final of a competition designed to show teenagers what it is like to be a chartered accountant.

The sixth-formers had reached the last 50 at the final in Birmingham after first seeing off competitors in three previous rounds of the BASE contest, which is organised by the Institute of Chartered Accountants in England and Wales (ICAEW).

They won a coveted Highly Commended trophy as well as the prize of spending a day at the London offices of Ernst & Young (EY). Nationwide, the competition attracted entries from 500 schools and more than 4,000 pupils.

In the earlier rounds, the team had to present ideas for a fictional technology company. In the final challenge, however, they were given a fresh business study and required to think like chartered accountants, planning an appropriate strategy to enable the business to move forward.

Economics teacher Kimberley Jackson said: “They had to use knowledge acquired through their Economics lessons to analyse the problems surrounding acquisitions and mergers and to reflect upon important current issues impacting businesses, such as cyber safety and data protection.

“The team delivered a short presentation to a panel of judges and were asked many challenging questions. The judges were very impressed with their informative and well-delivered presentation.

“The boys all thoroughly enjoyed the experience of presenting and the chance to network with major employers such as PwC, EY and KPMG. They now look forward to competing again in 2018-19.”

The team comprised Shakeel Ahmed, Tarun Alexander, Millan George, Parth Gosalia, Manan Shah and Rohan Shah.

Economics Society guest speaker Lal Chadeesingh gave pupils an insider’s view of how behavioural economics is being applied to UK public policy – and explained that it all stemmed from the personal interest of David Cameron.

Lal works at the Behavioural Insights Team – a group that was the brainchild of former Prime Minister Cameron, who set it up under the Cabinet after reading the seminal book, Nudge. The team was later spun out into a company part-owned by the Government which now works to improve the effectiveness and efficiency of Government measures.

Headmaster Neil Enright said: “This was a good opportunity for the boys to hear about a different side of Economics beyond finance, and to understand how economic theory can be used in the public interest.”

Year 12 pupil, Ibrahim Al-Hariri, added: ‘The talk introduced a part of Economics that is often overlooked; changing people’s behaviour for their benefit is a fascinating idea that I would love to explore.”

Lal, who read Economics at Durham before completing a Master’s degree in Economics and Public Policy at Bristol, introduced boys to the principles behind behavioural economics as described in Thinking Fast and Slow – another key work about this emerging discipline and one of the first books to introduce it to a wider public. The book contrasts two modes of thought: fast, which is automatic, intuitive and requires little to no effort, and slow, which is conscious, more deliberative and logical. While traditional assumptions among economists and policy-makers about the existence of homo-economicus (a purely rational decision-maker) take no account of this dichotomy, exponents of behavioural economics have used it to develop a theory of predictable irrationality.

The Behavioural Insights Team uses this understanding to tailor policies and their implementation so that they are more effective in generating the desired results, explained Lal, who began his career working in the Civil Service under the then-Business Secretary Vince Cable. It has condensed its guidance into a simple mnemonic, EAST (Easy, Attractive, Social, Timely), for policy-makers to keep in mind.

One assignment taken on by the team was reducing the number of people missing NHS appointments by looking at the wording of text messages sent out to patients. After testing various other forms of wording, they found that stating the material cost to the NHS of missing an appointment was the most effective, with a typical message reading:

• We are expecting you at Mile End Hospital on Sep 16 at 10:00am. Not attending costs NHS £160 approx. Call 02077673200 if you need to cancel or rearrange.

This change reduced missed appointments by 2.6% which, although a diminutive percentage, equates to 400,000 appointments nationwide.

Year 12 economist Mipham Samten said that, to some amusement from the boys, Lal also explained the theory behind painting a small fly on the back of lavatories – a small, subtle image getting men to focus on the task at hand and reducing the chances of spillages by a significant rate.

“Students were rather less amused by another novel application of the EAST framework on behaviour,” added Mipham. “The team had discovered that the effect of sending text messages to parents informing them their child will have an exam soon and asking them to encourage revision was to increase maths score grades by the equivalent of one month’s teaching.”

“Overall,” said Mipham, “Lal’s talk opened the students’ eyes to the numerous material benefits of Economics to the public and many expressed an interest in pursuing professional economics as a career.”