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February 13, 2005

Mid Year Review and Advice for Incoming Students

Version 0.05 - 14-02-2005

I didn't have much time to sit down and write this out earlier, I've been extremely busy trying to get my act together and see if I can still manage a respectable grade on my course. Now that the issue is moot, I might as well tell you how to get it right at the LSE.

First of all, congratulations! Beyond all doubt, you are entering what could arguably be the best ranked non-phd course in the world. LSE and it's row of Nobel Prize winners (the first thing you notice when you enter the Students Service Center) still has better recall among people in the know, than any other institution serving Economics as a course. The biggest reason for this is perhaps the fact that it solely caters to instruction in the social sciences, but some amazing work has come out of this place over the last one hundred years!

This paragraph is mostly a quick review of where I'm from and a lot on the Indian educational system.
In case you haven't read my profile, you can find little bits of it here, and here. I finished my undergrad in India, so coming here was obviously going to be something entirely different. In all fairness, I didn't study much Economics in India - the style and approach to the subject could fool you into believing you are studying an Economic History course. I recently recieved some critique on this issue, and felt that I should elaborate a little further. At the undergraduate level, almost all Economics courses in India (excepting Calcutta which I don't have any information on) are effectively a three year journey into the origin and development of the subject. Most of the reading material we used were 'do it yourself' guides to understanding how to pass an exam... one that contains no problem sets and little or no mathematical material. Exams are usually essay questions geared to test your understanding of the historical significance of what you learnt. JG raises the point that Delhi/Calcutta offer problem set approaches with technical levels that may exceed those that are offered in the United States. My own personal opinion is to strongly disagree with that opinion. Atleast when it comes to Delhi/Bombay/Madras, friends who still study / just graduated from these institutions confirm that the system hasn't changed in the last two years that I haven't been around. Once again, with regard to Calcutta, I don't have much information so I won't say anything except for the fact that they're one of the only institutions to offer a BSc. in Economics (a la United Kingdom) as against a BA. Please don't take this as an absolutely negative comment on the Indian system. There are many advantages to the way in which we are taught. We get a much better bigger picture than most other systems in the world. Whereas history of Economic Thought is optional most everywhere, most Indian Economics students must compulsarily enroll in a HET course or related option. This brings about a much better intuitive understanding of Economics as a whole. However, I still stand by the fact that the entire systematic problem-set approach is on the whole a non-existent entity in India (Calcutta may be the sole exception). The first time I did a problem set was at the LSE, at summer school.

My offer of admission came in November last year; I was one of the first applicants, and I really pushed hard on my app for an admit. From the looks of it, most of my peers have an 800 in their GRE Quant. Its something that probably appears to be an initial way to chaff the applications, as do many other institutions around the world. However, that doesn't mean they don't admit non 800s... but those that get in without an 800, are exceptional on most other counts (and would have got an 800 on any other day). That leads me to an important point - expect to see the crème de la crème of students when you get here. One interesting observation is that I encounter people who would cruise through Grad school in the United States like a world champion ice skater. When I ask them, "so are you thinking about Grad school in the US", a lot of them often tell me that they'd love to do a PhD but rather die than go study in the US. They detest the thought of their European liberal freedom being curtailed. There are a *lot* of students who feel this way, and in a way, the American in me feels a tinge of sadness - these guys are insanely brilliant... and Goldman Sachs gets them instead :)

To keep this review in focus, I'll stick to the MSc. Economics one year course, and dabble a little bit into the MSc. Econ two year and the MSc. Econometric and Mathematical Economics degree. The MSCE2Y is basically the combination of the Diploma course - a one year undergraduate course that beefs up your concepts - very often required for Indian students, and almost always required for non-economics students, and the MSc proper that I'm doing right now. The EME course is considered the gold standard of "Psycho-Insane" existence. It's a year of crazy-assed Econ/Math/Stat courses, and a year of advanced Economics/Econometrics courses that are one level higher than what we learn at the MSc. Economics course.

MSCE1Y students are required to compulsorily take the September course in Economics (EC400). The rule is that you need to pass this in order to continue to the course. If you fail or are on the border, though they may ask you to leave, no one to my knowledge had that treatment meted out to them. Instead I think some may have been asked to attend additional Math prep classes organized specially for them. I'm not too sure on this, but this is what they had told us would happen.

EC400 can be a nightmare to anyone, irrespective of what kind of a background you're from. The reason is that it is extremely cramped. In three weeks they take the life out of you - filling you with information that you would ordinarily wish to consume over a few months. You attend one week of economics revision, one week of Micro-Math, one week of Macro-Math, and three weeks (concurrently running) of Statistics. Econ revision is out of a Hal Varian's Intermediate Microeconomics and is fairly straightforward. Micro-math is out of Simon and Blume - concepts such as concavity/convexity, quasi-concavity, optimization, Kuhn-Tucker conditions. If these are strange terms to you, now is a good time to start brushing up - you have about six months, which should be a fairly good amount of time to get started.

The macro-math is by far the most interesting. One gripe I had was that the math-macro is only taught for 4 days. It was exciting stuff - differential equations to get you warmed up, followed by dynamic optimization techniques such as the Bellman Equations and Hamiltonians for continuous time. There is an extra chapter on Markov chains, but we didn't get time to go through it.

Now a quick warning: The math that we do at the LSE in EC400 is not the math that Chris Silvey burned in hell with. It is far more theoretical in the US - they spend a lot of time using basic set theory / functions / mapping concepts and build you into more advanced ways. Here, its very cookbook - its a one year course and they teach you how to apply the tools you need to get through it. If you are expecting hardcore theoretical Math, then you'll be in for a surprise (pleasant or otherwise).

Once you get through the September course, you have to write the exam. You then get a weekend to cool off all those 2 hour nights. Some of my posts from back then will give you a flavor of what life was like. 1) "The Butchery Begins" 2) "Ten days on" 3) "Week Two and the Torture Ahead"

For the first few weeks of the main course, you won't really feel the burden of the material being covered. The reason for this is that there is a significant decrease in the speed of things. September was all about 5 hour work-days with quizzes every day and problem sets on top of that. October is a slower pace - especially the first three weeks when you still don't have classes or tutorials.

Three core courses are required - Micro, Macro and Econometrics. Each of these comes in two versions, MSc. and Advanced. This year, they were particularly strict about not allowing MSc. students to take the advanced course. It is something that I felt strongly about earlier (here is my post on that), and I still strongly believe that it is an unfair decision to be stringent about admitting MSc. students into the Advanced course. My personal gripe comes from Micro, where I am still to learn something that is profoundly new. In my summer school course (Intermediate Micro), which is a 2nd year level course, we pretty much learnt everything that we're doing in MSc. Micro. The main text is Varian in the MSc. course, whereas in the advanced course it is MWG... which is the bible of all bibles in Microeconomics. My advice: if you are sure you have done a significant amount of Micro in the past - especially game theory and basic industrial organization (monopoly, price discrimination, duopoly, bargaining etc), then push hard for Advanced Micro. Dr. Pratt, who was the person responsible this year, can be deceptively sweet, but will send you back to Msc. quite speedily. You have to burn with passion with whoever is deciding on admitting you. Make sure you do it! This applies for Macro and MEI as well. However, there is one caveat to this. The MSc courses are a lot more 'fun'. They give you a nicer take on what the subject is about. This applies to all three subjects... but most importantly to Micro and Macro. In Micro you get to do classic papers that may not be covered in Advanced Micro (which is highly theoretical and covers a smaller footprint of the subject). A good barometer is, "if you've read The Market for Lemons (Aklerof) and can solve a problem set on it, take Advanced Micro". Watch out for Corner Solutions (the famous Piccione Corner Solutions are exam classics... and should always be respected deeply!)

Macro is exciting. From day one you are introduced to the fact that most of the macro you learnt as an undergrad was all crap. I remember that in high school, many of my friends who took Chemistry used to whine about how everything they learnt in the 9th and 10th grade was pure bullshit and that they had to effectively unlearn everything and start from scratch on completely different principles. Macro at the graduate level is a lot like that. IS-LM and many related concepts are usually not mentioned at all for fear of the Dynamic Optimization gods showering lightning on you. It is very micro-founded, and goes into great lengths to teach you about representative agents, utility functions in macro, asset pricing, monetary policy, et al. Alex Michaelides and Danny Quah do justice to the course in terms of the footprint. Michaelides's section requires you to be quite nifty with discrete time, whereas Quah's course will have you mastering differential equations and dynamical systems a lot faster than you might have wished for. I have a lot of respect for both of these people and the stuff that I've learnt for them. It's the ONLY subject that I wake up in the morning and actually want to study. It is the only Mock exam that I crammed my brains out for. In short - don't miss it for the world.

Econometrics is a slightly weaker spot for me. The course is quite interesting - they don't get too complicated with the stuff you have to learn. In fact, I studied out of Gujarati, which is an undergrad textbook to learn the concepts, and then used lecture notes to actually get by. Though Green is the recommended textbook, you will find that both Vassilis Hajivassiliou and Stephen Nickell are excellent with their lecture notes. The problem sets are very difficult. Don't be surprised if you cannot answer most of it until the end of each term. I personally have given up attempting them... and will study like crazy in my vacation time to make up for it. The lectures themselves are harmless - they're fun to attend and you learn a lot about basic theoretical Econometrics. If you haven't done Econometrics/Time Series before, don't think about doing Advanced Econometrics.

I'll write a brief bit on my own personal opinion of what this course has done for me. I'll refrain from being personal, but let's make sure you know that I have a lot of personal opinions just like any other young hot-blooded 22 year old in the middle of his test of manhood :)

I have learnt far more than I had expected to at the LSE. The sheer experience of interacting with all these people is maddening. Every other guy on the row you're sitting in is from some kickass institution, or (this ones for you Kevin) comes from the Potato/Chicken heartland but can solve a mean differential equation while levitating in yogic bliss. The strongest feeling I often get is that I am extremely academically inadequate to be here. Very often I feel like I didn't deserve the admit... and that I was just really street smart to get in. Look, I have a big ego, so don't think for a second that I'm NOT pompous. I'm as street smart as you find them... but you know what... this just isn't a place for that. You may survive one Danny Quah quick fire question (as I just about scraped through in our first class with him), but after that, you'd better run like your arse is on fire and start reading and cranking out those problem set solutions. LSE forces you to tune up more. It pushes you to demand more of your own knowledge. It however knows when to let go - unlike most grad schools in the US. This is both good and bad. Its good because just when you think you're going to die, you get a little breathing space. Its bad because popular belief sides with death as the only way bring out the best in you. When you graduate from LSE you still won't be ready for Grad school in the US - not by a long shot. However, in a crude way you'll be academically street smarter - a better player at the jack of all trades game, and that will be your best weapon when you reach the doors of hell. I discuss grad school at length, only because there’s so much to talk about. If you want to study at the LSE and get a job... its just a one line affair: no shit... you'll get lapped up before you can count to ten... provided you're shrewd enough to get hired. Lehman, Goldman, “everyotherman” will come by, drop a business card, and invite you to drink and eat with them. Do it, apply smart, and you're in before Dorothy reaches Kansas. I'll leave it at that.

I haven't talked at all about the optional subjects - purely because this is a more opinionated discussion and I thought it best to leave it until later. You get the first three weeks (and more if you really need to) to decide on which optional you want to take. There are lots - go read the LSE website - and you can attend different lectures to decide which one you want to attend. One word of advice: decide on your shortlist before week one of main term and attend all lectures that are on your shortlist. They don't wait for you to make up your mind - you make it up as you go along. If you didnt attend the lectures you missed out on a crapload of stuff.

My own optional was Monetary Economics, and my various frustrated constipated posts (click here) will enlighten you on that. Make sure you choose wisely - this is the subject that you'll obsess over. You have to write a master's thesis on it which counts for 50% of your grade... the final exam being the other 50%. You will quite often read sleep and eat this subject - especially if most of the students in your class are PHD students (optional subjects are common for MSc and PHD students). Monetary is a course dominated by research students - the level of the course is far higher than the rest of the MSc. Seriously - I've written enough about this one so I'm going to let it go. You will enjoy it... but only if its where your interest lies. Mismatches on the optional subject will lead to a slow and painful conclusion to your year.

There is a lot more to write about - the social life, living and adjusting to London - but these are well covered by many other sources of information. If you think something is missing in this lengthy and burdensome write-up, mail me and I'll add to it.

Links:
1) LSE
2) Econ @ LSE
3) Postgrad Courses @ Econ @ LSE
4) Staff & Faculty @ LSE
5) My page at LSE

Update: Syllabus/More details on courses. Links with (*) contain reading material that is not locked by LSE internal passwords and is freely accessible. Links with (-) may have locked materials. (eg: */*/* = Freely accessible materials for all three portions of the course).

Syllabus/Reading Links:
1) EC400 - September Course | Course Guide
2) EC411 - Microeconomics for MSc. Students | Course Guide */*
3) EC441 - Advanced Microeconomics | Course Guide */*
4) EC413 - Macroeconomics for MSc. Students | Course Guide */*
5) EC442 - Advanced Macroeconomics | Course Guide */*/-
6) EC402 - Methods of Economic Investigation | Course Guide -/*/*
7) EC443 - Advanced Econometrics | Course Guide -/*

Update 14-02-05
Gstergia from the Testmagic Grad Forum asked me:

"Beyond all doubt, you are entering what could arguably be the best ranked non-phd course in the world."

Why The Times rank LSE 4th in the UK?(http://www.timesonline.co.uk/section/0,,6734,00.html)

"That leads me to an important point - expect to see the crème de la crème of students when you get here."

But they admit 120+ people each year +20 MSc EME and charge 15,500 pounds (creme de la creme means intelligent, not rich, right?)

"Now a quick warning: The math that we do at the LSE in EC400 is not the math that Chris Silvey burned in hell with. It is far more theoretical in the US - they spend a lot of time using basic set theory / functions / mapping concepts and build you into more advanced ways. Here, its very cookbook - its a one year course and they teach you how to apply the tools you need to get through it. If you are expecting hardcore theoretical Math, then you'll be in for a surprise (pleasant or otherwise)." (emphasis added)

But all top PhD Econ programs ask for solid math background (right?)

"When you graduate from LSE you still won't be ready for Grad school in the US - not by a long shot. However, in a crude way you'll be academically street smarter - a better player at the jack of all trades game, and that will be your best weapon when you reach the doors of hell." (emphasis added)

Where do I have to get my MSc from to be prepared for US Grad school?

My Reply
1)Times ranking - They're rankings :-) At the end of the day, no one in England will argue LSE's first rank with regard to Economics, taking institutional and academic factors into account. I have friends at Warwick and Cambridge, and students who graduated out of Cambridge's second BA, and they have respect for the course we're doing. However, I don't want to toot the horn too much - there are definitely some downsides to being at LSE... but outside North America, I really wouldn't be able to graduate from anywhere better. I have a personal dislike for rankings as such - but of course this is an opinionated matter. (I supposedly graduated from India's best Econ school three years running, but everyone who graduated from the school as well as those that run the course know that we dont even belong in the top ten.)

2)Top PhD schools do ask you for solid math - but at the end of the day if you're able to do a graduate level course with the tools that you learn, thats what they REALLY want to look for. Thats usually the deal with LSE. Many many students out of LSE get into excellent PhD programs (and many don't). The math you do at LSE will be more than adequate to get started at grad school in the US, and most PhD schools will recognize that fact. However, there is truth to the fact that EME students are better off statistically in PhD admit rates. This however could be countered with the fact that most EMEs want to do a PhD whereas most MSC Econ guys want to get the fat investment banking and consultancy jobs - so there is some self selection involved. Out of 120 students, around 20 apply to PhDs. There are about 10 EMEs this year - most of them are looking at PhDs.

3)When I wrote the line about LSE not preparing you for grad school, I think intended to imply that theres no preperation like actually getting to grad school and beginning your course. LSE *does* prepare you academically, and leaves you with a lot more breathing space in your first year of grad school where you have to take your price and income theory general exams in most schools. There is no MSc. that will prepare you to cruise through the first year of grad school - only going to the course pages and ploughing through the problem sets on your own will be helpful that way.

Posted by vinayak on Feb 13, '05 at 2:41 PM | Permalink

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Comments

Posted by: mdl at February 25, 2005 6:20 PM

Posted by: Vinayak at February 25, 2005 5:34 PM

Posted by: JG at February 16, 2005 7:27 PM

Posted by: KLH at February 15, 2005 6:14 PM

Posted by: Vinayak at February 14, 2005 10:22 PM

Posted by: JG at February 14, 2005 9:54 PM

Posted by: David at February 14, 2005 2:23 PM

Posted by: Jacqueline at February 14, 2005 8:11 AM

Posted by: Shweta at February 13, 2005 4:53 PM