My Interest in Studying Behavioural Economics

Having met both the opulence of Kuwait and Europe and the extreme poverty of Africa, through my travels, I became aware of the inequalities that exist within and among countries. Witnessing penury in the rural side of Egypt, during my volunteer work this summer, I acknowledged that eradicating this inequality was not only economically sound but a moral imperative. With a better understanding of the forces, policies and dynamics driving a fundamental transformation of the global economy, I hope to contribute to this Being appalled by the uneven distribution of wealth in Egypt, my home country, I researched its economic and financial status over the years. I developed a thorough understanding of how events such as the political instability of the 2011 revolution were directly reflected in the performance of the macroeconomy and the direction of the country's fiscal policy. Going back to ideas introduced by the physiocrats proved vital to grasp the foundation of modern macroeconomics. Through my background, I was able to relate their idea of nations gaining their economic wealth from nature to Egypt’s dependency on its agricultural sector.

My belief of the effect of psychological factors on the economic decision-making process of individuals led me to dive deeper into behavioural economics. Having been introduced to Game Theory by the Yale University lectures online as well as reading ‘Prisoner’s Dilemma’ by William Poundstone, my strategic decision-making skills and reasoning has improved significantly. Studying concepts such as Nash Equilibrium has helped me understand that the presidential elections are nothing but a game where the two players must make rational independent decisions in a non-cooperative situation. The opportunity for further study of the use of theories in interpreting why and how the economy behaves, especially under variations of unemployment and inflation, is what compelled me to study economics. Reading books such as “The Wealth and Poverty of Nations” by David Landes has made me appreciate how the gap between wealthy and poor nations of different time periods has widened and why some countries continue to have more assets than others.

Another book addressing the global inequality of wealth that I have explored quite profoundly was The End of Poverty: Economic Possibilities for Our Time by Jeffrey Sachs. Sachs’s detailed plan which mainly depends on international aid to help the extremely poor climb the first steps up the Ladder of Development seemed convincing at first. While effectively given aid, provided in the right context such as investing in improving necessary infrastructure, healthcare or education can provide essential assistance to people in need, it cannot ‘create’ development for impoverished nations. Instead, this was often mainly achieved, as seen in China’s return to the global economy emerging as a strong engine for world economic development, through engaging with markets and reforming international trade policies.

Studying A-level physics has helped me build up my problem solving and analytical skills, enabling me to test new ideas as well as question and investigate theories. Being awarded for my performances in the maths contests by Waterloo University year after year as well as the satisfaction I found in solving the most complex of problems encouraged me to study further maths at A-level. Having understood the applications of Calculus in finding the derivatives of utility and profit maximization curves, I am eager to expand my knowledge of how this topic and mathematics, in general, can explain phenomena in the economy. In addition, I have watched an online series on Linear Algebra, Probability and Statistics by Norman J. Wildberger which would be beneficial in conducting quantifiable tests and creating models to predict future economic activity.