Economics Personal Statementfor Cambridge

In September 2022, I watched the Bank of England step into the gilt market after the mini-budget and begin temporary purchases of long-dated government bonds. What caught me was how quickly confidence seemed to move borrowing costs, before any policy had time to work through wages, production or employment. I was used to thinking about economics as a set of mechanisms. That episode made it feel more like a study of expectations: what people think will happen can become economically important in its own right. Since then, I have become most interested in the gap between what a policy is designed to do and what people think it will do, because so much seems to turn on that difference. I want to study economics at university to understand that gap more rigorously, especially in relation to money, inflation, credibility and information. The more I read, the less convincing tidy answers become, which is exactly what makes the subject worth pursuing.

My A level study has given that interest a clearer structure. When we covered monetary policy, bond prices and inflation, I had first treated policy as almost mechanical: raise rates, reduce demand, lower inflation. CORE Econ's work on inflation targeting and anchored expectations showed me why the Bank of England's 2% target matters not just as a rule for policymakers, but as a signal to firms, households and investors. That changed the way I thought about policy, because it made credibility look less like a vague political word and more like something that affects behaviour. I explored the same issue in my EPQ, which asked how far the Bank of England's inflation target appeared to anchor expectations between 2021 and 2024. I used CPI data from the Office for National Statistics, results from the Bank of England/Ipsos Inflation Attitudes Survey, and the Bank's 2024 Monetary Policy Reports, then plotted changes in household expectations against actual inflation and major rate decisions in Excel. The hardest part was realising that I had treated "expectations" as if it were one thing. Household survey responses were much more volatile than I had expected, which forced me to separate household expectations from market expectations and firms' pricing decisions. The project ended with a narrower conclusion than the one I had wanted: inflation targets can anchor behaviour, but imperfectly, and their credibility depends on communication and on whether fiscal policy appears to support them. That process of revising my question, rather than forcing a neat answer, has been the best preparation for degree-level study.

Outside the classroom, I have tried to test and complicate what I was learning rather than just collect examples. Reading Ha-Joon Chang's Economics: The User's Guide showed me how differently schools of thought explain the same problem: a rise in inflation can be read as excess demand, a supply shock, or conflict over income shares, and the policy response changes depending on which story convinces you. Tim Harford's The Undercover Economist brought me back to incentives at a smaller scale, something I also notice in my Saturday job at a discount supermarket. Small reductions on discretionary items clear shelves quickly, while staples often sell steadily despite price changes, which made elasticity feel less like a diagram and more like a pattern in behaviour. George Akerlof's The Market for "Lemons" then pushed me further by showing how prices depend on information and trust as well as scarcity and preference. I also entered the John Locke Institute Global Essay Prize in Economics with an essay on whether financing government spending through central bank money creation can ever be justified. I had to separate seigniorage, quantitative easing and direct monetary financing, which initially blurred together for me. By the end, I was less certain, not more. That experience made me more careful about arguments that sound decisive because they ignore institutional detail.