Trinity Economics Review 2024

6TH EDITION

20 24

Contents Vision 2030 - the opening of Saudi Arabia’s economy or a fantastic PR exercise?

- Toby Fry (U6PJB) Will the US enter a recession? An analysis founded on market indicators and Austrian Theory — Thushan Peiris (U6RMH) Should we have a four day a week work schedule? - Taisei Masumoto (U6PJB) Do successful businesspeople benefit others when making their money, when spending it, both or neither? — Conor Maguire (U6NMB) The role of Immigration in shaping our economy — Aayan Samanta (U6RMH) Is the main driver of the use of AI in the financial services industry: economic, social or political? - Caitlin de Sousa (U6TSL) The costs and benefits of hosting the Olympic Games - Matthew Boyde (U6JSE) The Economics Pathway: An interview with Bilal Ismail The Economics Pathway: An interview with Zain Mirza The Economics Pathway: An interview with Lucy Ellis-Keeler The Economics Pathway: An interview with Lev Titov The Economics Pathway: An interview with Max Sherwood The Economics Pathway: An interview with Nathan Thomas Famous Quotes Dear Readers, Over the course of 2024, we have been exposed to a wide variety of economic issues, centred around the unstable political and socio-economic global landscape.

Many students are no doubt aware of the increasing tensions globally, and the conflicts that have erupted this year, whilst acknowledging both the economic and human impacts of such conflicts.

Not only has there been tension between countries, but also tensions within countries themselves, as this year was a prominent year for elections. We interacted with the fallout from the Conservatives’ 14 years in government, as they left the UK economy in the hands of a Labour government, whilst also following the US presidential race and other European elections.

We hope that you enjoy reading this magazine and discover more about economics as a whole through articles and 2 contributions from our amazing students and alumni community.

Vision 2030 - the opening of Saudi Arabia’s economy or a fantastic PR exercise?

— Toby Fry

When I ask you to think about Saudi Arabia you may think of the World’s biggest oil exporter. You may think of a closed, religiously conservative country or the oppression of women and the contravention of human rights. You may think of a desert country surrounded by geo-political turmoil. One man, however, is looking to change your mind: Mohammed bin Salman (MBS).

MBS is the son of the current King. He started his political life as Minister of Defence; became Crown Prince in 2017 and Prime Minster in 2022. The prince is a controversial figure – he has spearheaded social, religious, and economic reform in Saudi but is also strongly associated with the war in Yemen and the death of journalist Jamal Khashoggi. He is the architect of a vast multi-pronged project called Vision 2030 through which he hopes to revolutionize the Kingdom.

Vision 2030 was announced in 2017 and consists of a huge range of projects aimed at changing Saudi’s social and economic landscape. It is based on 3 pillars: a vibrant society; a thriving economy and an ambitious nation. It aims to diversify the Saudi economy from one almost entirely dependent on oil to one with a range of industries including a successful tourist sector, manufacturing, and quaternary industries. It aims to develop non-fossil fuels energies and to create a renewable energy capacity of 20 GW by this year. It has set a target of becoming a zero-carbon economy by 2060. Social and religious reform is planned to create a more liberal society.

The plans are impressive, the most well-known and futuristic construction project is NEOM. Neom is a complex of 10 projects including Oxagon - an octagonal floating port city on the Red Sea; Sindalah – a luxury Red Sea Island eco-tourist resort; Trojena- a mountain winter and water sports resort and The Line which seems to be the most ambitious. The Line is described as a 170km linear city. Extending from the Red Sea into the middle of Saudi Arabia. It is proposed to be car-free; carbon zero, and to house 9 million people when complete. The plans are to have the city bounded by two mirrored buildings, so it blends with the surroundings. It will operate on 3 levels – the first for pedestrians; the second for infrastructure – such as schools, homes and businesses and an underground transportation system which allow people to move horizontally and vertically. It will be entirely fueled by renewable energy and will use AI to design and run the city.

One of the most visible recent changes is Saudi’s involvement in international sport; Saudi is the major stake holder in Newcastle United football club and 4 Saudibased teams, and it has spent hundreds of millions on players for Saudi teams. It has invested in US Professional Fights League; WWE and horse racing, and 1 billion dollars have been invested in the Professional Golf Association (PGA). There are rumours about interest in buying Formula 1 and the Indian cricket Premier League. Saudi has also won bids to host major international sports events such as the 2034 Asian Games; the 2034 Football World Cup and the 2029 Winter Asian games amongst others. This unprecedented investment in sports has totaled over $5 billion in 3 years and increased Saudi GDP by 1% with the government ambitious for more. The Saudi Sports for All Federation (SFA) created the first national football league and the SFA President Prince Khaled bin Alwaleed has described that the ‘mandate is to have 40 percent of all people in Saudi Arabia active by 2030’. This seems a highly laudable goal.

There appear to have been some other very demonstrable changes in a relatively short period of time. Vision 2030 aimed to increase employment amongst women from 22% to 30% - a target which has already been surpassed. There has been a change in the employment type with more women taking up jobs within the highly paid government sector. Training programmes have enabled women to take on leadership positions previously difficult to access in a patriarchal society and the number of women employed in professions such as law have also increased. Saudi labour laws have been amended to outlaw discrimination based on gender. Women were granted to the right to drive cars in 2018 and there has been relaxation on rules regarding fashion and clothing.

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The lift on the ban of cinemas in 2018 has led to a boom in this entertainment in Saudi. This industry is expected to generate $572 million in 2024 with an annual growth rate of over 5%. New cinemas are opening with international films especially those from Hollywood being popular. This is opening the Kingdom to secular and Western cultural experiences. Cinema goers are also requiring an increasingly sophisticated cinema experience with associated food provision, comfortable seating and highquality audio-visuals which has added to economic diversification.

Other new forms of entertainment have also been introduced such as comedy venues, wrestling and monster truck rallies.

The state-owned Saudi Press Agency claim that 87% of its projects are ‘on the right track’ with a third of the planned 1064 projects already completed. However, there are other suggestions that some projects need to be scaled back, at least in the short term. Plans for the Line have been revised and currently aim for a length of a few miles and a population of 300,000 by 2030. Construction of the Jeddah Economic City is not yet underway. Independent evaluation has estimated that only $250 billion of the planned $1.25 trillion worth of projects have been commissioned and the government has now stated that some projects will be delayed to avoid inflation. The projects that are most likely to be completed are those with external deadlines, for example the Trojena winter resort and the surrounding hotels are due to be fully opened in 2027 ahead of the Asian Winter Games in 2029.

This will be the first Neom project to be finished.

Delays and reductions in scale may not necessarily be the problem they seem, and the Saudi government appear not be embarrassed by these apparent miscalculations. Their approach seems to be that the plans are so new; innovative and ambitious that problems are inevitable, but that Saudi wants to lead the way globally and even scaled back projects are massive achievements. Saudi has begun to manage expectations on some fronts: One Saudi spokesperson is quoted as saying: ‘We don’t have ego; we will change course and we will adjust […] we will downscale some of the projects.’ Even if some projects are reduced or lost, Vision 2030 may offer Saudi the opportunity it wants to re-brand itself to the global community.

Vision 2030 is not without critics. From the outset there has been doubt about the credibility of many projects which seem unrealistically futuristic. Greg Priddy of the US Centre for the National Interest has said: ‘Most of these projects were never credible as business plans – hence little private foreign capital coming in’.

One of the most voiced claims is that of ‘sports washing’.

Saudi Arabia claims that sport-investments are being made to boost tourism; generate GDP and create a healthier sports-interested youth. Critics say that positivity of sport-related investment worldwide is being used to deliberately deflect from the less acceptable aspects of Saudi society such as the oppression of women and the poor treatment of homosexuals and political dissenters. Human rights campaigners have ongoing concerns about practices within Saudi. There has been a rise in the number of executions and long prison terms for controversial online views. Homosexuality remains illegal and the Personal Status Law 2022, that was hailed as progressive by Saudi, still gives men the preferential rights in marriage, divorce, and guardianship of children.

Moreover, Saudi continues to follow a form of Sharia law with punishments that include beheadings, stoning, whippings and amputations.

Green campaigners have also cast doubt on the green credentials of the Vision 2030 citing concerns over the energy needed to provide cooling systems and water desalination for sporting events as well as the snow and ice required for the Winter Games 2029.

Cash flow appears to be the biggest challenge and the PIF is pressing the Saudi banks in heavy lending to maintain the expenditure. The level of foreign investment appears below expectations and despite increasing political tensions in the Middle East and the ongoing RussoUkrainian conflict, oil prices means that the government is facing a predicted three years of budget deficit.

Regardless of these issues or maybe because of them, Saudi continues to tour the world to showcase Vision 2030, launching meetings in Cannes, Paris, and China, amongst others .

Reports of the forced eviction of indigenous Bedouin tribes has also caused unrest. The Neom site is the home to 20000 tribespeople. Lethal enforcement is rumoured to have been sanctioned to clear these villages ready for construction and opponents of the evictions have been arrested and some have reportedly been shot. The CEO of Solar Water, a company that was to provide solarpowered desalination for the project cancelled the $100 million contract after being appalled by the human rights concerns at this site.

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References:

So, are the changes that Vision 2023 brings a push for genuine change and development, or grandstanding aimed at re-branding a country with a poor global image?

It is easy to criticise a country, which has been embedded in the conservative end of Islamic belief, for not modernising quickly enough but we need to remember that 100 years ago women in the UK couldn’t vote on the same terms as men. 70 years ago, Nazis herded ‘undesirables’ into gas chambers.

Homosexuality only stopped being illegal in the UK in 1967 and Apartheid was dismantled in South Africa in 1990. The reality is that the current ideas of human rights are relatively modern constructs and not all countries have moved towards them at the same pace, but progress towards internationally agreed laws and rights should be rewarded. There are clearly some highly positive developments already.

https://www.bbc.co.uk/news/world-europe45812399https://www.neom.com/en-us https://www.nytimes.com/athletic/5237849/2024/02/0 2/saudi-arabia-sport-investments/ https://www.greenprophet.com/2022/10/the-linedrone-death-sentence/ https://sg.news.yahoo.com/energy-ceo-said-canceled100m-114730175 https://www.bbc.co.uk/news/articles/c4gz8934wrro https://www.ojp.gov/ncjrs/virtuallibrary/abstracts/sharia-penalties-and-ways-theirimplementation-kingdom-saudi-0 https://research.hktdc.com/en/article/MzQ1OTIzMjY1 https://globalbusinessoutlook.com/economy/howsustainable-saudi-vision/ https://www.agbi.com/analysis/gigaprojects/2024/04/saudi-arabia-strives-to-countergiga-project-doubts/? gad_source=1&gclid=Cj0KCQjw28W2BhC7ARIsAPerrcIC DVBxOMAlyDWfhqjxPICq6gMjje2iu0NQwuuZq80VIjUnB6nd1AaAuPVEALw _wcB https://www.agbi.com/giga-projects/2024/03/trojenawinter-resort-aims-to-be-neoms-inaugural-site/ All images are provided by the official NEOM publicity campaign

Whether we view Vision 2030 as a vanity project of a power-hungry man or a genuine attempt to modernize and become a central part of the global community, encouraging Saudi Arabia to relax laws and beliefs that oppress and to diversify away from oil monoculture can only be a good thing for the World.

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Will the US enter a recession? An analysis founded on market indicators and Austrian Theory — Thushan Peiris

In August and September 2024, western markets felt a slight shock when two major reports were released on the United States manufacturing industry and labour market. The results of the reports fell short of economists’ predictions and caused fear amongst investors both in the US and abroad. In fact, the largest drop during this period was in Japan when its Nikkei 225 index dropped 12.4% over a single weekend, its largest drop in 37 years. Whilst it and other markets recovered swiftly, it cast a shadow over the true health of the US economy. At the ground level, many Americans feel that the economy is the biggest issue of the upcoming presidential election in November by polling data as they have experienced price rises in basic goods and services. It is therefore a particularly important topic not just for American citizens, but for markets worldwide as well.

It is worth establishing the Austrian Theory on inflation as set out by Ludwig Von Mises in the early 20th century. He postulated that inflation was a result of the government spending more than what it received in the first place (through taxation or otherwise), inducing a cascading effect of price rises (whose benefits are felt by few as the market takes time to respond to such changes). For instance, if the government want to build a hospital purely with money given by taxpayers, there would be no significant price changes.

This is because, even though the taxpayer’s disposable income is reduced meaning that he/she cannot invest or buy in products as much as before, the government fills this void by purchasing goods or services. In other words, there is no net change in spending in the broad scale. However, if the government were to use money that it printed, it would increase the supply of money, thereby reducing the purchasing power of a single unit of currency. The industries which are the first customers of the government, feel the benefits. In the case of the hospital, a construction company will take advantage of prices that are higher than the current market level. Then its employees may be paid higher salaries, allowing them to spend more on goods and services driving up costs. This domino effect continues but when it reaches certain groups, a long way down the line, the market has already changed and prices are higher than what they used to be, thus driving inflation. So how is this related to the American economy?

The federal budget has been in a deficit since the early 2000s. In the year 2000, there was a budget surplus of $0.24Tn compared to a $1.69Tn budget deficit in 2023.

The decrease into deficit has not been a recent phenomenon; in the last 21 years, there has been a cumulative deficit of $20.14 trillion. Congress has increased its spending by over a trillion dollars in the last eight years, some of which can be attributed to the intervention during the COVID-19 pandemic, but a large part can be attributed to the large spending programs issued by the federal government. This includes Medicare and social security. Relating this back to the Austrian Theory, the federal government receives a certain amount of taxpayer money but proceeds to spend more than the amount it obtained. The rest of the money may come from printing or borrowing (which in turn increases the national debt). In accordance with the Austrian Theory, this should have increased inflation; with the government spending primed for it, Russia’s war in Ukraine was the suitable trigger which increased inflation in the US beyond Federal Reserve targets.

Inflation in the US soared to 9.1% in June 2022 from 1.7% in February 2021. To respond to this, the Federal Reserve increased its base interest rate from 0.25% to 5.5% from 2022 to the middle 2023, an increase of 2100%. This increase has had a significant impact on borrowing costs which can be analysed by looking at government bonds. In a healthy and growing economy, bonds show a normal yield curve, meaning that the yield of a bond increases with the maturity period. This signifies investor confidence in the short-term economic prospects of the issuer of the bond. However, the US Government bond yield curve is inverted which demonstrates that investors are pulling out of short-term bonds which implies a lack of confidence in the short-term performance of the economy.

Furthermore, the inverted yield curve has steepened from a year ago showing the drop in confidence by investors. It is worth pointing out that a steepening inverted yield curve is one of the largest indicators of an economic recession.

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In any case, the short-term outlook is not as optimistic as it may have seemed 6 months ago. Despite inflation coming down and an imminent interest rate cut, ordinary Americans feel increased prices the hardest, the unemployment rate is slowly rising, and an economic recession would do them and the world no favours at all.

In conclusion, unless there is an increase in taxation (current low rates will expire well into next year) or large government spending cuts such as repealing parts of Medicare (which is projected to go bankrupt by 2031), an economic slowdown seems to be on the cards in the near future. The chance of a recession is small but certainly larger than before and certainly possible.

In addition, the jobs market added fewer jobs than projected (only 142000 compared to a projected 167000) in the last quarter. This implies that fewer jobs are needed because certain industries are slowing in their expansion.

One such industry is the manufacturing industry, its response can be measured through the Purchasing Managers’ Index or PMI. It is a diffusion index which details whether the manufacturing industry is in a state of expansion, stagnation or contraction.The PMI recorded in September 2024 was 47.9, down from 49.6 the previous year, indicating that the manufacturing industry is in a state of slow decline. This again is another indicator of a recession.

Additionally, there has been an increase in the VIX indicator. The VIX or Volatility Index uses S&P 500 index options to give market expectation of volatility in the stock market. A VIX below 20 is considered to mean that the market has lower risk and stock values are on the rise whereas A VIX above 30 implies great uncertainty in the market. In the last 3 months, the VIX has spiked to 38.57 and is currently at 22.38. Whilst the VIX can only provide projections for the next 30 days, given the recent and sudden increases, the VIX shows that the market is more uncertain than it was a year ago and that stocks are, at least in the short term, not growing as they should. This is reflected in the recent stagnation in the S&P 500 and Dow Jones Industrial Average market values.

Naturally, there are many other indicators to be considered when projecting the economic outlook of the US. There are certain events to occur such as the election which can only mean a big change in economic policy regardless of the victor. It could also be argued that the interpretation of the indicators discussed could point to economic slow-down rather than a widespread recession.

This debate cannot be more aptly reflected in the prediction of the interest rate cuts by the Federal Reserve in the coming weeks. Some would say that an interest rate cut is happening at all means that the Federal Reserve is gaining confidence in the economy, whereas the fact that analysts predict a cut of 25 base points as opposed to a previously thought 50 points implies that the Fed is having second thoughts about a recession.

References: https://www.bbc.com/news/business-63960721 https://www.weforum.org/agenda/2023/10/unitedstates-european-economy-interest-rates-27-october/ https://www.cryptoglobe.com/latest/2024/08/japansstock-market-crash-rivals-1987-sparks-global-panicprofessional-trader-explains-why-it-is-happening/

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Should we have a four day a week work schedule?

— Taisei Masumoto

I was inspired by a talk at LSE by Sarah O’Connor, a columnist at the Financial Times who proposed the idea of a four day working week to better the lives of employees.

Following this talk, my curiosity grew on whether this idea would work and the long- and short-term benefits.

The traditional five-day workweek has been the norm in many parts of the world for many years in order to increase economic growth. However, the idea of a four-day workweek schedule has gained much traction in recent years, fuelled by the desire for better work-life balance, increased economic efficiency and overall employee wellbeing. While the idea is appealing to most workers and employees, there are several challenges that needs to be overcome. This article dives deep into the pros and cons of a four-day work schedule, helped by research and relevant case studies, offering an overall judgment on whether this growing idea could be seen in the near future of work.

There are also environmental benefits to a four-day work schedule. With one less day of commuting and factories polluting, there would be a significant reduction in the carbon emission levels.

A study by the University of Reading discovered that a four-day work schedule could decrease the UK's carbon footprint by over 20% as the miles driven by car would decrease by 558 million. This reduction would mostly come from the reduction in commuting through mediums such as driving but also factors such as energy needed for offices decreasing would help reduce the carbon emissions. However, with the new technological advances such as solar panels, wind turbines, and hydroelectric power stations, the cost of energy and pollution from these factors may not affect the global carbon footprint to such a great extent.

One of the many advantages of a four-day workweek is the possibility for increased productivity. The idea is that with fewer hours of work for employees, they will be more motivated, focused, and efficient in their tasks. One study

by Microsoft Japan in 2019 found that applying the fourday workweek led an increase in productivity by 40%. Due to the reduction of hours to work, businesses discard the meetings that are not needed and instead use that time to work more efficiently to boost the country’s economy.

Furthermore, a four-day workweek offers employees increased time to spend with family, leading to an improved work-life balance. This added day off can significantly reduce anxiety and stress, which are commonly diagnosed in working adults. According to a survey by the Society for Human Resource Management (SHRM), employees who work a four-day week are reported to have had much higher job satisfaction and significant decrease in stress compared to workers who work the traditional five days. Therefore, the decrease in stress and anxiety levels can help workers to work more efficiently and be more engaged at work. However, according to the same article, the SHRM stated only 9% of organisations have implemented this.

For employers, a four-day week schedule has the potential to lead to more cost savings. This can be seen especially in overhead expenses such as office supplies and utilities.

For employees, fewer workdays can mean reduced commuting costs and savings on meals and work-related expenses. In some cases, these financial benefits can be substantial, making the four-day workweek an attractive option from an economic point of view.

In addition to this, in a competitive job market, companies that offer a four-day workweek will quickly gain traction from workers. The idea attracts those who are younger and have families so employers will be able to hire those workers who have potential as they are young. The promise of a ‘longer weekend’ and shorter work schedule then helps to retain those workers as they build up trust and reduce turnover rates and unemployment. This allows firms and businesses to increase profits and contribute more to economic growth.

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Nevertheless, one of the key issues with a four-day work schedule is the potential impact on customer service and client relations. Clients may be used to being able to access services five days a week instead of the suggested four. Companies which are extremely popular and have high service demand may struggle to respond to the clients’ needs, creating service gaps. This can worsen customer relations with the firms which may lead to clients leaving. Hence, companies might need to implement staggered schedules or rotating teams to ensure that customer service standards do not slip, which can complicate operations and increase costs.

Although a four-day week schedule may initially seem like an effective way to relieve workers of stress, in the longrun, it may not benefit workers at all and could possibly increase the stress by a lot more. This is because some employers would want to keep high profits, therefore, they could compress the five-day workload into the four days.

This could increase stress as workers may think they have to finish all their work within the four days.

Although the four-day workweek holds potential as a modern approach to work-life balance and efficiency, it is not a solution that can be used for all modern industries.

Different businesses would need to consider the benefits and costs to see whether one outweighs the other. If done effectively, then the model may be used to maximum efficiency which would help maximise profit and mental wellbeing for employers and employees respectively.

Nevertheless, it will take time to increase the popularity of the model and so during the stages of some companies implementing this and others not, this may lead to some confusion to employees and consumers until it has become the new standard schedule.

In some regions, labor laws and regulations are based on a five-day workweek, and moving to a four-day schedule could lead to legal challenges. For instance, laws regarding overtime may have to be changed or adjusted and companies may be reprimanded by the law if the employees feel as if they are being overworked. Navigating these legal issues can be complex and time-consuming, adding another layer of difficulty to implementing a fourday workweek.

References:

To conclude, the practicality of a four-day workweek depends on many factors such as the company culture, business, and the type of specific job roles. For organisations which are slightly more on the creative end of sectors, this idea may be very beneficial to them as this allows more stress-free time to come up with more ideas and become more innovative. However, for industries which are very customer-interacting, this idea would not be as beneficial and could be more costly as this could lead to service gaps and worsen the customer relations.

https://www.theguardian.com/technology/2019/nov/0 4/microsoft-japan-four-day-work-week-productivity https://www.shrm.org/topics-tools/news/all-thingswork/phenomenon-four-day-workweek https://www.forbes.com/sites/amynguyen/2021/06/10 /how-a-four-day-working-week-could-cut-uk-carbonemissions-and-boost-mentalhealth/#:~:text=Researchers%20from%20the%20Unive rsity%20of,by%20558%20million%20each%20week. https://research.reading.ac.uk/research-blog/workless-to-save-the-planet-how-to-make-sure-a-four-dayweek-actually-cuts-emissions/ https://www.economist.com/the-economistexplains/2021/07/08/could-a-four-day-working-weekbecome-the-norm? utm_medium=cpc.adword.pd&utm_source=google&ppc campaignID=18156330227&ppcadID=&utm_campaign= a.22brand_pmax&utm_content=conversion.directresponse.anon https://www.british-business-bank.co.uk/businessguidance/guidance-articles/staffing/four-day-workingweek-pros-and-cons-for-your-business - :~:text=A fourday working week could increase your employees' health,having more time to rest.

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Do successful businesspeople benefit others when making their money, when spending it, both or neither?

— Conor Maguire The assumed theory that everyone always benefits when businesses make or spend money is not always true.

Within this article, I will be discussing why spending and making money can in fact be both beneficial and detrimental to society, concluding that overall, it is more valuable than not. In this article, I will be relating to how making money normally leads to more spending from the business and discussing what I feel the most important components are avoiding the obvious assumptions that increasing spending perfectly increases growth in the economy.

The Popular theory of Trickle-down economics seen under Thatcher and Reagan has more recently been discredited by economists who argue the majority of people do not benefit when businesses spend their money, or don’t spend their money! This is for similar reasons discussed in Dr Hope’s “The Economic Consequences of Major Tax Cuts for the Rich” where the general consensus is that when rich people are given more money, they often bargain more for their own compensation at the expense of workers, increasing cuts in spending on areas which previously would have been left, all in an attempt to maximise their profits. In closer relation to the question, when businesses make more profits, it would not be unreasonable to assume for the same reason, they do so by reducing spending on certain areas that benefit others and areas which previously benefitted society now have been changed to maximise profit.

According to ‘World Bank, Our World Data’ a 1% rise in income for the wealthiest 20% of a society is likely to shrink annual growth by 0.1% within five years. By contrast, raising the income of the poorest 20% by a single percentage point increases annual growth by 0.4% over the same time frame. While this primarily focuses on individuals this credits the previous statement that just because businesses make more money doesn’t necessarily mean they will reinvest it back into the economy.

It is also heavily dependent on the state of the economy, if interest rates are high, that will discourage spending as there is more benefit to saving. As well as this the higher the income or net-worth of an individual, the higher their MPS (marginal propensity to save) tends to be as they are more able to satisfy themselves as their wealth goes up, meaning money earned is less likely to be spent back into the economy and rather saved.

As well as this, the small minorities that will benefit from the businesspeople spending their money is less than once though. When businesspeople make more money, they tend to spend it between themselves, keeping the wealth at the top and the people lower down don’t see the benefits from it. This can be shown by the top 1% of adults holding significant amounts of national income with the number rising from 7% in 1981 to 15% in 2007. It is similar to companies, when an established named companies need to increase its orders form suppliers, they will go to another established, named supplier. The only exclusive benefit to this is that by business expansion, more job opportunities will become readily available to others.

One argument that aligns with the view that other people benefit when businesspeople make money is the profit purpose paradox. This is the understanding that firms will not succeed if they exclusively focus on making a profit meaning they have to account for other purposes.

Patagonia which has already reached eco-friendly objectives like 100% renewable energy also remains fighting for a bigger change by aiming for their packaging to be 100% reusable, home compostable, renewable or easily recyclable. By Patagonia having a ‘fully integrated purpose it can infuse internal stakeholders with a sense of meaning and provide external stakeholders with a reason to believe in the organization’s mission. By these businesses having alternate objectives it means when they make more profit it is not only is society reaping the expected benefits of more jobs etc, but they also now have more money to put towards projects that help the world as a whole. Companies like ‘Two Blind Brothers’ who put 100% of their profits to curing eye disease or FIGS who donate a pair of scrubs to resource-poor counties for every item sold.

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Nearly all mainstream companies have an alternate purpose that is beneficial to society as this is how the paradox needs to be managed; companies that exist only to produce a profit don’t last long. And companies that don’t pay attention to profits can’t exist to fulfil their longterm purpose. Finding this balance allows companies to stay afloat while being constructive to society. Proving that the recognised companies today will have some sort of incentive which helps people in some way.

So, if they make more money, they have the ability to put more towards these good causes helping more people.

While there is not a strong counter to this argument, Milton Friedman would argue ‘the business of business is business’ alluding to the fact that a company's goal should be to maximise profits and not worry about being ethical.

Overall, by business making more profits, it means more money can go towards causes like those mentioned meaning more people are helped proving the positive externalities businesses can have when making money.

One key aspect that is a direct benefit of companies making higher profits is that they are able to give more money to charities who need it. Philanthropy is the donation of money towards good causes. A lot of companies take part in this as other than the feeling that they are helping the world, it also benefits their public relations. Companies like Tesco donate 4.39 percent of their pre-tax profits, as well as companies like LifeArc, whose objective is to fund research projects for rare diseases. One project they funded was a charity close to my heart. (Lily Foundation) I’ve witnessed the real benefits of this on a personal level as it was helping a condition my sister had and the effect it had on the company’s research and development was astronomical. Companies like this can be so advantageous to society by directly preventing illness and stopping death. The clear benefit of companies making more money allows them to donate more to charities helping more people, including the families that can get the support they need. With this being said the harmful omission and opportunity cost of potentially taking scarce resources from one community and giving it to another who is deemed to ‘need it more’ can lead to crises, as well as companies having to choose between charities meaning while some people benefit others do not.

Companies spending on areas like innovation can also directly help others as it can solve solutions to issues that harmfully impact the world. Inventions such as solar panels slowing global warming directly come from companies spending on research and development. The impact of new inventions cannot be understated as some societies could not function without companies spending money on innovation. Not to mention how critical it was in saving lives when finding the vaccination for COVID-19. By businesses making more money it allows them to pay in areas where utility is the main focus and, depending on the product, people's lives can be made easier. Companies recognise how important this is, like Amazon who spend over 73 billion on innovation alone, putting them are the forefront. However, we have to take into account the negatives of innovation, the automation of technologies means humans are getting replaced as an unmatched rate leading to loss of jobs, resulting in worse living standards.

In conclusion, without the benefits that businesses reap, society would not be able to function as well as it does today. It is important to separate spending and making, however, when businesspeople make money, it tends to mean they spend more. The most prominent example of this is through philanthropy, but the importance of the goals businesses are setting around climate change and fair trade are almost equally as important. While there is some inequality in the level people benefit when businesspeople make money as well as the imbalance in the extent of how different businesses help society. To conclude, more people benefit than are negatively affected.

References: https://eprints.lse.ac.uk/107919/1/Hope_economic_con sequences_of_major_tax_cuts_published.pdf https://thedocs.worldbank.org/en/doc/7712714769086 860290050022016/original/WhoaretheGlobalTop1.pdf https://www.statista.com/statistics/265645/ranking-ofthe-20-companies-with-the-highest-spending-onresearch-and-development/

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The role of Immigration in shaping our economy — Aayan Samanta

Immigration is a sensitive topic for the politicians of Britain. Under the Tories, there has been more immigration, with net migration more than doubling figures recorded back in 2010. One study shows that around 6.8 million foreign-born people were in the workforce as of the first quarter of 2024, which is over a fifth of the total workforce, revealing the importance of foreign workers in maintaining and shaping our economy.

This is a negligible change and is not thought to have the exaggerated impact which is being displayed in the media.

It is therefore surprising to hear that the same study suggests that immigrants have a greater effect on other migrants themselves. This is because the skills of the new and old migrants are more likely to be similar, revealing that there is not much effect on those low-skilled workers, but more of an impact on other migrant workers.

The common argument for increased immigration is that there would be an increase in skilled workers providing for the economy, resulting in more output, and increased economic growth. However, a counter to this, believed by those who are anti-immigration, is that skilled immigrants coming into the country, would take jobs from British workers, or decrease the wages of these British-born workers with less skill. In a study done by Social Europe in 2018, they found that most citizens in the European Union had negative feelings about immigration, with 38% thinking it created more problems than benefits.

According to a similar study done at UCL (University College London), immigration between 2001 and 2011 has provided £25 billion to the economy during a budget deficit, showing that immigrants have made positive contributions to the economy. This is emphasised by the lack of benefits given to migrants, as this study also suggests that immigrants are 43% less likely to receive government benefits compared to natives.

Ipsos did a study on the attitude towards immigration as of February 2024, attaining similar results. Out of the 3000 British adults interviewed, 35% believed that migration does not have a positive impact. Moreover, the proportion of people who believe immigrants are having a positive impact in the UK has been steadily decreasing since 2022, revealing that this view may be becoming more popular as time passes.Whether this opinion holds as a fact in the economic sense is another question, however.

The main reason immigrants can get employment is that they are allowed into the country via a work visa, as well as having more desirable qualifications. Most immigrants who come to the UK complete their education before immigrating. This can act as a shortcut in the UK in accessing productive work, as they can use this labour force, instead of spending state money on education, to provide and improve the skills of the low-skilled workers for the long term. In the 10 years from 2001, the human capital provided by immigrants saved the UK £6.8 billion on government spending on education.

If we were to look at multiple studies, there is enough information provided to show that migration does not impact wages as much as they are believed to. According to the Migration Advisory Committee, immigration had no impact on the average unemployment of existing workers, though a minor change was recorded for low-wage workers. Following this Oxford study, we learn that from 1994 to 2016, immigration reduced the hourly wage of UKborn workers who were low earners, by 0.5 pence a year.

This raises more questions about the immigration system in countries like England. Seeking human capital from other countries is not necessarily wrong and is the optimal choice in stimulating the economy both short and long term, however this may be viewed as neglecting your own country's education, and therefore could be seen as negatively impacting those who have lived in this country their whole life.

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Following another study by the Migration Observatory, we can learn more about why immigrants can stay employed compared to UK workers. One reason is that foreigners are often overqualified. We can use Pakistan and South Asia as an example. As of 2022, out of 262,000 high-skilled workers from these countries, 40% were working in lower-skilled jobs. Similarly, for EU-8 countries, like Czechia or Poland, around 44% work in these jobs. We continue to see these patterns for multiple foreign countries, where for most of them at least 20 % work in lower-skilled jobs.

Why does this happen? There are a few reasons which could be behind this. One is that some foreign skills are not easily transferable to the UK, or are hindered by language barriers.

This would prevent workers who are highly qualified in other regions from providing these qualifications in the UK, resulting in them getting lower-paid jobs where their skills may not be used to their full potential. As stated before, due to the influx of people with these skills, this would only create more problems for those who do not possess many of these traits at all, due to low education. This creates a cycle; the government has a low budget on education, people lose the opportunity to pursue highly applicable skills, leading to a struggle to get a job with a high salary.

References: https://www.socialeurope.eu/theyre-taking-our-jobsreally https://www.ipsos.com/sites/default/files/ct/news/doc uments/2024-03/immigration-tracker-2024-charts.pdf https://migrationobservatory.ox.ac.uk/resources/briefi ngs/migrants-in-the-uk-labour-market-an-overview/ https://migrationobservatory.ox.ac.uk/resources/briefi ngs/the-labour-market-effects-of-immigration/#kp2 https://www.ucl.ac.uk/economics/aboutdepartment/fiscal-effects-immigration-uk https://www.lse.ac.uk/research/research-for-theworld/economics/why-low-skilled-worker-wages-havestagnated-even-while-the-economy-has-thrived

Following on from this, do these working immigrants create problems for the economy? No, it is proven that they help to stimulate the economy and that they are also their own competitors. The only other point which has been revealed is that low skilled workers are not able to compete. This is not the fault of a working immigrant though. In fact, this question should be phrased differently. Is there a lack of support for low-skilled workers in teaching them the necessary skills?And why aren’t their wages rising as the economy grows?

These questions are complicated to explain, but they are questions for the government and businesses. In fact, in a study done by an LSE professor, she revealed that wages for low-skilled workers have stagnated, even when the economy has been thriving. This shows that this is a much larger and complex issue. Therefore, it is not as simple as saying migrants do not provide enough benefits for our country.

Even though we have only explored this view from an economic standpoint, we have shown that immigrants provide benefits economically and can help the government reduce spendingon education. Whether more money should be spent on education for low-skilled workers, is now a decision to be made by the Labour government.

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Is the main driver of the use of AI in the financial services industry: economic, social or political?

— Caitlin de Sousa

Artificial Intelligence (AI) has been an emerging concern in recent years, for many in the labour force, especially in the highly automatable financial services industry. Adoption of this technology in firms and businesses has been driven by the need to create products that dominate the market – the best products economically, socially and politically.

However, the prospect of an economy which values AI productivity and efficiency over human labour efforts, feels threatening towards the security of those in automatable jobs as the media seems to suggest that they are easily replaceable, with ‘almost 73% of financial services employees from Great Britain and the USA being convinced that generative AI will make their work redundant’. Now, as AI takes over the financial services industry, predicting trading cycles and profitable purchases, it seems as though human workers are becoming obsolete - so why do employers still seek to introduce it? This is due to the positive impacts of AI, which increase consumer satisfaction, innovation and profit. In an industry where competition is hugely prevalent, using technology to increase productivity and profits is leading to an increase in the use of AI – one which could be argued is inevitable. In this article, I will be exploring the three drivers which influence the use of AI in the financial services industry.

A huge motive for the introduction of AI in the financial services industry is due to the economic benefits that it brings. The McKinsey Global Institute estimates that up to 30% of the global hours worked across the economy could be automated by 2030. However, even with this predicted loss of jobs, there is incentive for the replacement of human workers with AI, as it could increase profit. In stock trading, AI has transformed the way that investment decisions are made. Rather than relying on human intuition, subjectivity and research, traders use algorithms to analyse large sets of data, making beneficial trades based on market trends and patterns. This gives firms an advantage through high-frequency trading, which allows them to take advantage of price discrepancies that AI picks up on, to trade at the best possible price, for maximum gain.

However, it can be argued that algorithmic trading does not work 100% of the time, due to the ever-changing market conditions which humans can respond to in a more efficient way than AI. This is because humans can make decisions situationally - not via an algorithm, allowing them to move flexibly with the market. Although realistically, firms will still be motivated to favour the introduction of AI in the Investment sector due to the high likelihood of AI producing large amounts of revenue for the firm.

Figure 1 Another economic motive for the introduction of AI is the increase in productivity, and reduction in errors that it brings. It has been argued that AI will undoubtedly be more productive than humans, mostly due to its inability to get sick or tired. Employers would benefit from this massively, as there would be no fluctuations in the revenue stream, meaning profit can be maximised. AI is not intelligent enough to ask for wages, meaning that employers can use it instead of humans, decreasing the cost of labour. This is seen through Figure 1 above, which shows that if there is use of powerful AI, the annual labour productivity growth in the US increases considerably, up to 2.9%. Peter Engelke provides support for this statistic by arguing that modern technology has begun to affect nearly every dimension of human existence, because it outperforms humans, especially in administrative tasks.

This should be balanced against the fact that AI is not costless, as it costs vast amounts of money to buy and implement. It brings high energy costs, increased inequities and retraining, meaning that the benefits of AI are negated somewhat by the amount of time and money that must be spent to implement it. However, the tangible positive effects on productivity via AI may be a greater incentive than the cost in the long run, with academic studies showing a 3 percentage-point rise in the labour productivity of firms adopting AI, showing the benefits for 14 firms overall.

Another major driver for the introduction of AI into the financial services industry is due to the overall social benefits it brings to employers and employees alike. AI has been stereotyped as a force for evil, through the possible impacts it may have on employment in automatable industries.

Although, in reality AI will not only help people keep their jobs, but also to create new ones, whilst improving the existing ones, as seen through the banking sector. This is evident through the similar introduction of new technology in the form of ATMs which slowly worked to replace many bank tellers. However, banks quickly discovered that the ATMs were not only productive: they also reduced overall costs. This allowed the banks to open new branches with the extra money, so overall the number of bank branches increased by 40% in the same period, resulting in increased numbers of tellers being employed, with other tellers retraining to take on roles similar to checkout clerks, Thus, it is evident that AI will be extremely impactful in the modern world, as it increases the number of jobs, allowing markets to expand whilst firms gain higher profits from both AI and humans working together.

Despite this, we cannot guarantee that jobs will be enhanced by AI and not be replaced. It is expected that AI will be replacing most communications jobs as AI seems to be able to improve the quality of customer service. It does not bring any emotions into the economic transaction and provides answers almost immediately as AI is available 24/7. This is supported by an article which suggests that AI will be more successful in reaching customers and clients, with 80% of customers expecting AI to improve customer service, and 43% of financial services firms already using AI to personalise the customer experience.

However, we take into account that there may be customer resistance towards the use of chatbots in financial services, as they feel as though they should be able to talk to and share their private issues and information with a human who may understand their request better. Nevertheless, currently companies are implementing chatbots for their primary customer support activities and these chatbots are becoming efficient in answering up to 80% of the queries. This would motivate many firms to pursue AI, in order to improve client service and satisfaction in the long run.

A final motive for the introduction of AI into firms is due to the competitive political benefits it brings to the financial services industry. Currently, AI is inspiring innovation through its unlimited possibilities to make services transparent and provide easy access for every person. It can also help promote innovation through identifying market gaps and analysing trends, in order to meet the market optimum equilibrium, where all customers’ needs and wants are satisfied. It is beneficial for many firms to embrace it and add it into their everyday processes in order to improve services, as this may allow them to become leaders of an industry if they embrace it straight away. This would be in the political interest of many firms in order to get ahead of the curve – ahead of another technological revolution which will increase innovation further. A source from ZUCI provides support for this claim by stating that without implementing AI, there was a 44% risk of lagging behind competitors in the market. So, it would be rational for firms to implement AI, in order to get ahead of the other firms in the same market by accepting the newest AI to improve their business processes.

However, it could be argued that AI would not lead to increased innovation, as most firms would have the same resource, or AI, so would produce similar results, although this is not strictly true as some firms would choose to develop their own AI, causing increased innovation and market advantage.

We must take into account how AI impacts countries differently, as this depends on the environment in which AI is being used, and the skill set of the workers. Many firms who offer financial services tend to outsource assignments and projects to lower income countries, via their political connections. The introduction of AI might be beneficial to those in England, where workers might be able to retrain quickly, but would not be beneficial in countries such as Ethiopia, where 85% of jobs are at risk of automation via AI, whereas in the US it is only 47%. This therefore emphasises how AI could negatively impact those who cannot afford to lose their jobs in industries such as the financial services industry, as they are unable to retrain quickly. Employers who want higher profit and value human labour less may choose to make workers redundant without thinking about the consequences it may have. So, it could be argued that implementing AI increases political inequality.

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However, this may be a long-term effect of the implementation of AI, as the technological development of poorer countries is still very slow as there is a high supply of workers, but capital is scarce and hence expensive, as it must be transported and installed. ‘Standard economic theory’ predicts that production in these countries would be tilted towards more labour-intensive techniques still being used, showing a balance in the economy between AI and human labour: making sure that AI and humans can work together in order to maximise profits and satisfaction for consumers and clients. Therefore, incentivising the adoption of AI, as people can keep their jobs, and slowly retrain when, and if AI is implemented.

In conclusion, it is evident that the main driver of the use of AI in the financial services industry is economic, with the social and political drivers deriving from it. I believe that the profit motive and increase in quality of service provides the strongest motivation for most firms. Over time, AI will continue to transform the world. It will not just benefit employers but also employees and shareholders: increasing precision, highlighting better business decisions, increasing profits, and also substantially increasing overall satisfaction.

Therefore, it would be unwise for firms to not embrace and implement AI, as although AI might lead to a net reduction in headcount of human workers in certain areas of the financial services industry, such as customer service and accountancy, which will be supported by efficient AI – there will be a counter balance in terms of the economic, social and political benefits: creating a more developed and productive future for the entire financial services industry. In the words of Malcolm X, ‘The future belongs to those who prepare for it today.’

References: https://www.financemagnates.com/forex/ai-might-becashing-out-30-of-finance-careers/ https://www.fool.com/investing/stock-market/marketsectors/information-technology/ai-stocks/ai-ininvesting/#:~:text=How%20is%20AI%20being%20used https://www.zucisystems.com/blog/how-is-ai-drivingcontinuous-innovation-in-finance/ https://www.clearpointstrategy.com/blog/aicompetitiveadvantage#:~:text=Customer%20Experience%3A%20AI %2Ddriven%20chatbots https://www.jstor.org/stable/resrep29327 https://www.statista.com/statistics/1378626/growthof-labor-productivity-ai-adoption-2023/ https://aiindex.stanford.edu/report/ https://blogs.lse.ac.uk/medialse/2024/06/05/ai-isexpensive/ https://www.economist.com/finance-andeconomics/2023/05/07/your-job-is-probably-safefrom-artificial-intelligence https://www.jstor.org/stable/resrep53114.9 https://ideas.ted.com/will-automation-take-away-allour-jobs/ https://biztechmagazine.com/article/2023/12/how-aishaping-customer-service-financial-services https://wobot.ai/blog/the-role-of-artificial-intelligencein-reducing-workplace-stress https://www.project-syndicate.org/commentary/poorcountries-technology-dilemma-by-dani-rodrik-2021-02 https://www.jstor.org/stable/26617369 https://www.isaca.org/resources/news-andtrends/industry-news/2023/can-ai-be-used-for-riskassessments

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The costs and benefits of hosting the Olympic Games — Matthew Boyde

The Olympics is one of the most high-profile sporting events in the world, and in 2024 over 10,000 athletes competed in 32 different sports. Yet, the number of cities bidding to host the games has decreased rapidly since London 2012, where there were 9 bids. This was followed by just 4 for the Rio 2016 games, 3 for Tokyo 2020, and just 2 for the 2024 Olympic Games. One reason for declining bids is due to the vast cost of the hosting a games compared with the lack of perceived benefits. This article will aim to explore both these factors.

There are multiple obvious and short-term costs of being a host city. Large amounts of infrastructure have to be built to facilitate hosting athletes and fans alike, such as transport systems to the venues as well as, in some cases, the venues themselves and accommodation. The International Olympic Commission (IOC) mandates that there must be at least 40,000 hotel spaces for spectators, and in the case of Rio, this meant adding an additional 15,000 spaces to meet this requirement, at the cost of the city. In addition, the Zika virus had swept Brazil in the run up to the games and there was anger amongst some Brazilians as they felt that money spent on the games, could have been spent on managing the outbreak. For the 1992 games, Barcelona spent around $12bn on infrastructure in the end, 75% of the budget for the games.

32 sports were on display in Paris, and as more are added, more money must be spent on the venues to host these sports, such as velodromes, pools and stadiums. Boston’s failed 2024 bid stated that they would spend $400m alone on a new stadium. Since the Sydney 2000 games, security costs have quadrupled from $250m in Sydney to $1.6bn in Athens, thanks to the 9/11 attacks. Much of the costs for a games are fronted by the public sector at national and local levels. The London games cost over $11bn to put on, with 64% of funding coming from national government and 13% from the Mayor of London. This cost may be covered through slightly higher tax levels, or in the case of London funding for grassroots sport was cut to fund the games.

This was unsurprisingly unpopular with citizens across the UK, with similar feelings now reciprocated across cities that may potentially bid, as residents would rather see government spending on services such as education and no cuts to grassroots sport rather than money spent on a two-week sport event.

Critics also argued that the loss of grassroots sport may lead to higher levels of anti-social behaviour, requiring higher police budgets, as well as that reduced sport may see health problems increase and in turn place higher strain on medical services and in extreme cases, see productivity reduced, as less mentally and physically able workers are often the least productive. As costs rise and cuts must be made, the opportunity cost for hosting a games becomes harder and harder for a host city and host nation to justify as the value of next best alternatives such as healthcare or education spending become prioritised over an Olympic games. This results in the number of bidding cities following a downward trend.

However, if a games could turn a profit for a city then the cost of hosting is easily justified. Much of the revenue comes in four main ways: ticket sales, broadcast rights, sponsors and licensing. Around half of the revenue at any games is generated by broadcast rights, yet the IOC shares less than 30% of this with local broadcasters. In London the IOC took around $2.6bn from broadcast revenue. It becomes clear that even if London retained all the broadcast revenue, it would come nowhere near to the cost of hosting the games. However, the city keeps all sponsorship and licensing deals and this does provide useful revenue. This resulted in the total revenue of the London games being around $5.2bn, before money taken by the IOC is excluded. This obviously shows that London made an initial loss of around $6bn on the games so in this respect hosting cannot be justified. Therefore, the wider economic benefits must be observed to justify hosting a games.

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Perhaps the most obvious of the indirect benefits is the tourism from spectators wishing to watch a games. It is estimated that 471,000 trips were made to London from abroad to watch the Olympics. The apparent increased tourism increases revenue for hotels whilst tourists also spend their money across the city. As the UK can be considered to ‘export’ the service of tourism, theory follows that, ceteris paribus, injections to the circular flow of income increase and this leads to economic growth for a city and a nation.

It also ‘puts cities on the map’, with the best example being Barcelona, which overtook Madrid as a tourist destination after it hosted the games. However, yet again, there are issues with this. The EOTA describes the Olympic Blight as an instance where money is spent on the games and not on the traditional tourist attractions. In addition, the presence of the games discourages other tourists from visiting. The Beijing 2008 games saw a 39% decrease in hotel occupancy and a 30% decrease in visitors. This sees a reduction in spending in the local economy and this may be amplified if hotels are not locally owned, as profit leakage may occur, removing money from a city rather than keeping the profits where they were earned.

There is also arguably a further indirect benefit from hosting a games. A games allows a nation to show off its goods and services and after a games, exports from a country appear 20% higher, for example the Seoul games.

Figures from the UK government state that in the four years after the games, there was a £14.2bn benefit to the UK economy, surpassing the £9.3bn cost of running the games, mainly from securing contracts and from investment from foreign firms into the UK. Countries hosting a games are perceived as wanting to become more globalised and open to trade, which attracts this investment, such as China committing to a WTO agreement on trade liberalisation two months after winning the rights to host the 2008 games. This liberalisation allowed increased free trade with fewer restrictions across the world and allowed the Chinese economy to expand its rapid export-led economic growth.

In the 5 years after the Rome 1950 Olympics, Italy moved towards currency convertibility, which allows transactions to occur in currencies that are not of the domestic buyer.

This makes international commerce much easier and may boost the exports of a nation, signalling an increase in Aggregate Demand as exports have risen. This may create jobs within an economy, in turn raising output and GDP, leading to positive economic growth. However, benefits for a host city may be often overestimated. A £1.9bn boost was promised for London as well as 8000 long term jobs, and in Salt Lake City, the local economy expected a $4.8bn boost (in 2002 dollars) and 35,000 jobs. There was later found to be no notable employment increase in Salt Lake City after it hosted the games, resulting in vast amounts of money being spent for very little, if any, economic growth in the city, making the Salt Lake City games in essence a pointless vanity project.

So can a city be justified in hosting the games? Figures released by the UK government in the aftermath of the 2012 games revealed that 2 years after the games, there had been a £14bn boost in UK trade and industry, beating the target of £11bn over four years. Whilst those who model potential impacts will always conclude that the games will produce an economic benefit, it must be remembered that their funding is provided by those with a vested interest in the games seeming profitable. Due to the immense costs of hosting, developing nations should not host due to the large opportunity cost and lack of evidence for tangible and difficult to quantify economic benefits. They should rather spend the money on tackling social, economic and environmental problems within the country. This leaves the games as largely a vanity project for cities in developed nations, yet if areas are regenerated for the games, such as Stratford, then the economic benefits may be a bonus of a games as there is compulsive evidence against every games producing an economic benefit. This in part explains why so many cities are no longer bidding to hold the games, as they cannot justify the public expenditure without sufficient evidence to suggest that they will receive adequate returns.

References: https://apnews.com/article/2020-tokyo-olympicsgames-total-cost-8ec49ea2ea9d7316f37ffd20770a2742 https://www.gov.uk/government/news/turning-thegames-into-gold-economic-boost-from-london-2012has-passed-14-billion https://www.jstor.org/stable/10.7864/j.ctvwrm3xc.9 https://www.jstor.org/stable/23756386

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S S S C C I C I I M M M O O O N N N O EEECCCOO AAAYYY W W W H H T H T PPPAAAT 19

Several students are interested in LSE as a prospective university, for similar degrees.

What has been your favourite and least favourite part of your course and experience so far?

Bilal Ismail left Trinity in 2022 and is going into his final year, studying accounting and finance at LSE. He is currently the co-president of AIC and cofounded Kickstart Education with Zain.

First of all, your degree! What made you choose to do a degree in finance and accountancy?

I decided to study Accounting and Finance because I felt it would be a great stepping stone for a career in finance, and the range of modules on offer really caught my eye. I loved Economics at A-Level, so I was thrilled to find out that my course also includes Macro/Microeconomics and Econometrics.

I think that Accounting and Finance is a very versatile and practical degree. What really excites me about this field is how it combines these practical skills with wide-ranging applications.

Accounting is often referred to as the language of business, and I think it's an important skill for navigating the corporate world, managing personal finances, or even pursuing entrepreneurial ventures.

I’m also really drawn to the flexibility this course offers. Whether it's learning to code in Python or earning exemptions for the ACCA qualification, the degree feels forward-looking and adaptable, preparing me for whatever path I choose to take.

Overall, it just feels like a course that will keep opening doors for me, both now and down the line.

My favourite experience at LSE so far has been joining the LSE Alternative Investment Conference society. As a society, we organise the world’s largest student-run investment conference, bringing together over 60 senior leaders and 300 delegates from universities around the globe. It’s been an incredible opportunity to delve deeper into the industry and connect with amazing people from all walks of life. I’m thrilled to have recently been elected as President, and I can’t wait to lead the team next year!

On the flip side, my least favourite experience would probably be learning management accounting—it can be pretty tedious at times.

That said, it has been really enjoyable and rewarding to share the LSE journey with an amazing friend like Zain.

What are your future career and business plans?

I am currently interested in pursuing a career in Investment Banking.

I’ve enjoyed the experiences I’ve had so far, including attending various programs and participating in Spring Weeks in the field. I’m excited by the steep learning curve and the career opportunities these fields offer. They are centred around advising and working with successful businesses, which is something that personally intrigues me.

I hope to complete an Investment Banking Summer Internship to gain more hands-on experience as I have a lot to learn!

Alongside my career aspirations, I’m always eager to continue developing business plans with friends and seeing where our ideas might lead. We hope to introduce Kickstart to other Premier League teams and even expand into Europe.

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What has been the most fulfilling experience in the context of your business so far?

Teaching the Chelsea academy players, followed by a tour of the training ground, we felt as if we had signed for the first team!

Could you give some advice to those students who are interested in finance?

Start exploring as early as you can and stay open to new experiences. Apply for Work Experience and Spring Weeks, join societies, and work on personal projects—anything that helps you discover your interests and build your CV. These activities will give you plenty to talk about in interviews and demonstrate your passion. Even if an experience isn’t directly related to the industry you're interested in, it can still induce transferable skills that are valuable and applicable.

Also, seek advice and mentorship from former students —they can provide valuable insights as you navigate your own path. And if you have a business idea, think it through, seek feedback, ask questions, and give it a go. Whether it succeeds or not, you’ll always learn from the experience.

Zain Mirza left Trinity in 2023. He is going into his second year, studying accounting and finance at LSE. He founded Mentor Zone, and co-founded Kickstart Education with Bilal.

Could you tell us a bit about what inspired you to launch Kickstart?

Kickstart was originally a small tuition company which operated from my dining room. Since then it has grown to an education partner for large organisations such as Chelsea F.C. Academy. I launched Kickstart with the goal in mind for older students to teach younger students. I soon discovered that matching a tutor and tutee with common interests outside of academics has an enormous impact on their progression with that tutor. I believe that identifying this early on is a key reason for the business’ success so far.

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Did you have to overcome any difficult challenges when starting up your own business?

Yes, I met several challenges very early on. One of them was constantly being the youngest person in the room (by a long way). This feeling was daunting and definitely challenging, as it often felt like I had to prove myself to be taken seriously. Being the youngest in the room came with the assumption that I lacked experience or maturity, which led to moments of self-doubt.

However, I learned to use my age to my advantage by bringing fresh perspectives and innovative ideas to the table. I also focused on being well-prepared and knowledgeable, which gradually earned me respect and credibility.

Over time, I realised that confidence in my abilities and a willingness to learn from others were key to overcoming this challenge.

We heard that you also co-founded MentorZone. Has it been difficult to run and participate in two businesses simultaneously whilst being a university student?

Yes this has arguably been my biggest challenge yet. University is intense and owning a business involves taking on a lot of responsibility. People are paying you to receive a quality service and it is your job to make sure they are satisfied (at a minimum, of course a successful business will make sure every customer is beyond satisfied).

Running Mentor Zone with a partner relieves the pressure slightly and definitely makes it easier during times of hardship when you need a shoulder to lean on. After a few years and many online sessions we are hosting our first in person event in September, so looking forward to that!

What do you feel your USP is compared to other services of the same industry?

My USP was using young tutors who resonated well with the students to build a stronger relationship and allow for faster academic progression. We were also in an untapped market (providing academic support for ages 914 in sporting academies) which meant there was limited competition (back when we started) giving us time to grow and become a main player in the market.

What are your future career and business plans?

I don’t have any new business plans at the moment. I’m currently focusing on growing my two businesses Kickstart Education and Mentor Zone.

My future career aspirations involve working within the field of management consultancy. I am particularly interested in helping organisations improve their efficiency, develop strategic plans, and navigate complex changes.

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Lucy Ellis-Keeler left Trinity in 2015. She has a BA in Philosophy from Bristol University, and is currently working as a Vice President at Citibank. She was recently recognised at the Rising Star 2024 Awards as a rising star in Banking and Capital Markets.

What has been the most fulfilling part of your career so far?

The most fulfilling part of my career so far has been the unique opportunity to immerse myself in various aspects of compliance across different business within the bank. This year, I had a great opportunity to build a comprehensive compliance framework from the ground up for a new business, spanning some really interesting areas like Digital Assets and Strategic Partnerships. This allowed me to shape the foundational principles that guide the team’s operations, a challenge that was both demanding and deeply rewarding.

Additionally, my voluntary work with Women in Banking and Finance UK has been incredibly gratifying. As the co-chair of the Future Leaders Shadow Board, I have been able to contribute to an organisation that has championed diversity in financial services for over 40 years, driving initiatives that empower and support women in the industry. These experiences have not only expanded my professional expertise but have also allowed me to make a meaningful impact in areas I am passionate about.

Beyond my professional responsibilities, I’m also passionate about shaping future careers and supporting women in the workplace. I mentor students through Career Ready and the University of Bristol, helping them navigate their early career paths. I spearhead volunteering and donation initiatives for Smart Works, a charity that assists women in securing employment through interview coaching and professional dressing. This year I was honored to have been recognized for my impact, winning the WeAreTheCity Rising Star Award in the Banking & Capital Markets category. Furthermore, I was selected as a UN Women UK delegate for CSW68 and serve as a One Young World ambassador, roles that allow me to advocate for gender equality on a global stage. These diverse experiences have enriched my career and fuelled my commitment to making a meaningful impact in both my industry and the broader community What was the most interesting/tricky question you received in an interview?

One of the most interesting and tricky questions I received in an interview involved analysing case studies on bribery and corruption. At the time, the technical elements were quite complicated, and while this kind of scenario now feels like common sense given my experience, it was daunting then. I remember feeling a bit insecure because, having studied Philosophy at university, I didn't know the content inside out like those interviewing me did.

However, instead of pretending to know everything, I focused on asking clarifying questions to better understand the context. This approach helped me formulate my responses and, ultimately, mirrors what I do in my day-to-day work. It's crucial to have the confidence to ask questions rather than feeling the pressure to have all the answers upfront.

What inspired you to go into the financial services industry? Were you considering any other career paths?

What inspired me to go into the financial services industry was the dynamic and ever-evolving nature of the field. I was drawn to the idea of working in an environment where innovation, global impact, and strategic thinking intersect. Value exchange has always been at the core of humanity, driving us to achieve and innovate, and the financial services industry embodies this principle in a way that deeply resonated with me.

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Financial services offers the perfect blend of challenges and opportunities to make a tangible difference, whether it's through supporting businesses in navigating complex regulatory landscapes or helping to drive forward important initiatives like diversity and inclusion. The chance to engage with these critical areas and contribute to something larger than myself ultimately solidified my decision to pursue a career in this field.

Could you briefly give us an overview of a ‘day in the life’ as a Vice President at Citibank?

As a Vice President at Citibank, my favourite aspect of the role is that no day is ever quite the same—it always depends on the needs of the business and ongoing projects. My role is in compliance, where I support a specific business unit in adhering to laws, rules, and regulations across the globe. A typical day often starts with catching up on emails and Teams messages, especially since many of my stakeholders are based in the U.S., and I sometimes need to catch up on updates or requests that came in overnight.

In the mornings, I usually review relevant press releases or promotional materials, such as podcasts, to ensure these are compliant with local regulations prior to release. Lately, I’ve also been working on upskilling by taking a course on Chainalysis to deepen my understanding of cryptocurrency and blockchain technologies.

Throughout the day, I have numerous calls, including those focused on regulatory remediation projects and discussions with the business about various initiatives to ensure compliance with regulations. I also keep a close eye on emerging regulatory developments and assign impact assessments to the business for items that are of particular interest or relevance to them.

Sometimes in the evenings, I have additional meetings and calls, and occasionally, I attend networking events with Women in Banking and Finance. These events are a great opportunity to connect with professionals across the industry and engage in discussions that are both inspiring and insightful. The variety and dynamic nature of the work, combined with these networking opportunities, make each day fulfilling and engaging.

What advice would you give to your younger self?

If I could give advice to my younger self, I’d start with a simple but powerful message: just go for it.

Be brave, take risks, and don’t be afraid to try new things. Stepping out of your comfort zone is where the real growth happens.

I’d also encourage myself to view life as an investment portfolio—diversify your assets. Goals shouldn't just focus on one area, like work, but should span across different facets of life such as health, relationships, volunteering, and personal growth. A balanced approach ensures that progress in one area supports growth in others, truly embodying the essence of work-life balance.

When setting goals, I’d remind myself to be SMART about it—making sure each goal is Specific, Measurable, Achievable, Relevant, and Timebound. Without clear metrics, it’s impossible to track progress or make necessary adjustments.

Another key piece of advice would be to focus on getting just 1% better every day. Instead of aiming for drastic, unsustainable changes, concentrate on making small, consistent improvements. These incremental changes will build up over time, leading to significant transformations without overwhelming yourself.

Lastly, I’d stress the importance of being kind to yourself. It’s easy to become obsessed with achieving goals, but it’s crucial to strike a balance between discipline and self-compassion. Regular check-ins, self-kindness, and allowing yourself the grace to progress at a steady pace are key to maintaining both your mental well-being and your motivation. Remember, the journey is just as important as the destination.

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What potential career paths are you considering after university? Why?

Lev Titov left Trinity in 2022 and is going into his final year studying Economics at UCL. Co-editing the second and third issue of the Trinity Economic Review during his time at school, he was delighted to see that the publication has kept going.

Why an Economics degree?

An Economics degree is like a multi-tool. The quantitative skills you learn are the knife— essential for dissecting and analysing problems using regressions and statistical methods.

Qualitative skills are the scissors, enabling you to craft well-structured arguments and insights in essays and conferences. Staying updated with current affairs is your bottle opener; perfect for social settings. I promise I’m fun at parties.

I’m still undecided about my next steps. One option is a career in finance. I can apply what I’ve learned in class and it would be a typical path an economist undergraduate may take. Law is another option, offering the chance to study for two more years and then work in a fast-paced commercial environment, something I would enjoy. Economic research is yet another avenue that interests me, but the cost of a master’s in the UK is prohibitive—£30k isn’t exactly pocket change, especially when you factor in the lost income from not working. I’ll probably end up taking a year out to travel to think about it and to hopefully ward-off a burn-out crisis that may hit as I approach my thirties.

What books/podcasts would you recommend?

Cliche, but Freakonomics is an excellent read. The book is not fancy, or impressive, but I found that Steven Levitt, the co-author economist, demonstrates exceptionally inspired creative thinking. The book blends creative ideas with familiar statistical tools like regressions and hypothesis testing, concepts the reader might know from A-level Maths, to drive impactful, outside-thebox thinking. My key takeaway is that taking an unconventional approach to a simple question can lead to innovative insights. That is exactly what I will aim to do in my own research. Keeping the question simple and relevant makes it engaging and valuable, far more so than complex analysis that lacks practical appeal. Just remember, keep this book off your personal statement. Instead, look into the research papers the book is based on and explore the tools Levitt uses. Write about that instead, don’t mention the book.

What has been the best part of your degree?

One last question - microeconomics or macroeconomics?

(Or something else completely?)

The best part of my degree has been the freedom to structure my time independently.

I’ve been able to dive deeper into the topics I find interesting, whilst also working and maintaining a social life, just about. The content of the degree itself was challenging, but became much more enjoyable in the second year, and I anticipate it will be even more rewarding in my final year.

Macroeconomics. It is exciting because it explores economic development, policy and politics, adding a dynamic and engaging dimension that microeconomics often lacks. While microeconomics can sometimes feel unbearably dry, I do appreciate aspects like micro-econometrics. This field is practical, involves real data and makes use of powerful tools to analyse outcomes. When combined with a compelling question, it allows for some serious economic thinking to take place.

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What potential career paths are considering after University? Why?

you

After university, I plan to break into private equity and eventually start my own fund. Most people do a master’s degree to get in, so that’s likely what I’ll do next. I’m interested in looking at how companies work and how they can be made more efficient. Private equity is a good balance between being hands-on with businesses and working across a diverse portfolio of companies. It can be highly lucrative and provides amazing opportunities to learn the skills necessary to grow and transform any company.

Max Sherwood left Trinity in 2022.

He is going into his final year, studying Economics at Durham University. He has interned at Grammont Finance S.A. and has also done work experience at TP ICAP. Why an Economics degree?

Economics is great because there’s so much application to what you are learning, and the global perspective you gain will be helpful in all aspects of life and relevant to current affairs.

The ability to specialise means that you can tailor your studies to your interests in statistics, finance, micro or macroeconomics. Also, economics is so multifaceted it doesn’t matter what you want to do as a career; it’s an excellent starting point – if you’re unsure about career paths, economics is a great way to keep your options open.

What has been the best part of your degree?

I think the best part of the degree is that you have a level of freedom to explore what interests you – you start learning everything, but by the final year, you can specialise in any field that excites you.

Equally, the networking opportunities I’ve had have been fantastic. I’ve met so many people from all over the world who are like-minded and open new doors for careers.

What books/podcasts recommend?

would

you

Reading any economics articles, especially from the FT and the Economist, helps build your picture of the world economy. Econtalk podcasts were helpful in the lead-up to my application – they’re great for their deep dives on topics. I’m listening to In Good Company with Nicolai Tangen, a great business podcast exploring the nuances of running successful companies.

What was most beneficial in helping you prepare for your university application?

I think surrounding yourself with the subject gives you the best chance to succeed in applications – as many news articles, research papers, and podcasts as possible will help. But, if I could go back and apply again, I would enter more essay competitions – they’re strong evidence of commitment to economics and the academic skills which will put you ahead in the degree.

One last question - microeconomics or macroeconomics?

(Or something else completely?)

I prefer microeconomics mainly because it’s far more nuanced in its approach to understanding how businesses and individuals make decisions.

The frameworks are generally more reliable and rely less on heavy assumptions than macroeconomics, and there tends to be more real-world application. I have also really enjoyed modules in behavioural economics and finance.

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What books/podcasts/films would you recommend for those looking to further their interest in Economics, Business and Finance?

Films: The Big Short is a classic but excellent depiction of the events that led to the Global Financial Crisis. Although, Margin Call is close second.

Podcasts: Wake Up to Money, FT News Briefing, Bloomberg Businessweek Book: When Genius Failed (Roger Lowenstein) What has been the hardest part of your university experience and career so far?

Nathan Thomas left Trinity in 2017. He studied Economics at the University of Bath and is currently working as a Quantitative Research Associate in Fixed Income at Fidelity International What was your favourite part of your degree?

The module I enjoyed the most was Econometrics (Statistics for Economists - you either love it or hate it…) - it balanced mathematical content with realworld applications, thus I use quite a bit of the skills learned from this module in my day-to-day!

Do you have any advice for those looking for work experience at firms such as Fidelity International?

It definitely helps to start as early as possible - many financial services firms have opportunities available for sixth-form or first year university students. As soon as you start university (and after you’ve experienced Fresher’s Week), start applying to “Spring Weeks”, which are one-week-long insights into top financial services companies. This can really help bolster your CV and many firms treat these weeks as feeders into their summer internship and graduate roles, so you won’t regret it!

University is quite different to school in that you need a high level of self-motivation. Your grades and career are all in your hands, so it’s important to remain switched on whilst also enjoying yourself. Building this resilience will put you in excellent stead for when you graduate, as the playing field becomes even more competitive.

Can you explain what your role as a Quantitative Research Associate entails and why you decided to apply for it (including the pros and cons of your role)?

The main aspect of my role is using data to create predictive signals that trade financial assets. As an example, I could screen the financial metrics of a company (profit, debt ratios, etc.) such as Netflix compared to its peers and suggest a trade. This quantitative approach aims to remove human behavioural biases and can outperform based on the fact that markets are not perfectly efficient. I applied for quant-based roles as I enjoyed coding in Python (I started teaching myself in 2020), but also had a strong Economics background. This role is a nice marriage of both of those skills.

If you had to work in another sector of finance for a week, which would it be?

Pros: I get to work on thought-provoking, challenging problems.

The industry moves at a fast pace, and you remain at the forefront of innovation (e.g artificial intelligence has helped me to code more efficiently).

I have frequent client interaction, which means I can continue to develop my interpersonal skills as well as my technical skills.

I’ve experienced quite a bit of finance so I’d actually like to see what it’s like to work in the law sector (partially because I have watched the whole of “Suits” on Netflix…)

Cons: Working in Quant at a large company sometimes means that approvals/processes can take longer than you would like.

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What advice do you have for those who would like to follow a similar career path as you?

For a quant role, it is essential to learn how to code. Python is a popular language, but there are also other languages out there such as C++. To keep it interesting, try and work on a project individually as this is one way you can differentiate yourself from the crowd.

Famous Quotes ‘Many individuals are doing what they can. But real success can only come if there is a change in our societies and in our economics and in our politics.’

David Attenborough (Broadcaster & Naturalist)

Network – it’s hard to know what you want to do just by reading a few bullet points on a job description. By reaching out and speaking to those who are in certain roles, you’ll better understand if the job sounds like something you’d enjoy.

A rare but useful skill is the ability to explain complex quantitative/mathematical concepts simply and effectively to different stakeholders.

So, when you are learning concepts in university, try and explain the concept to your friends/family as this will definitely prove useful in the future.

‘If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.’

Milton Friedman (Economist & Statistician)

‘The difficulty lies not so much in developing new ideas as in escaping from old ones.’

John Maynard Keynes (Economist)

Please note that the Trinity Economics Review Team and Trinity School assert no claim over the photographs, diagrams or data used in this publication

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Our thanks to all the students and alumni who have provided articles and interviews for this magazine and to the Economics and Business Department for their continued support .

TRINITY SCHOOL

Edited by Caitlin de Sousa and Matthew Boyde