Writing for Economics
Up: Economics Network > Writing for Economics
The idea of setting essays is to offer you the chance to make a longer, more complex argument. Nonetheless, in the model we recommend, the fundamentals remain the same. In each paragraph, a flow of main idea (thesis) — explanation / reasoning (justification) — evidence / example (support) is an excellent structure to use. If you read through academic writing, you will find this structure over and over. The same is true for professional writing. There are of course other structures, however this one always works and makes you sound concise and clear.
An essay has conventional sections that it is wise to follow. These are an introduction, main body and a conclusion. The 'LSE' essay structure can be described as 'say what you're going to say (intro), say it in detail (main body), say what you've said (conclusion)'. Although this may appear repetitive, it offers the reader great clarity. Also, if you think about the executive summary, background, analysis and conclusions / recommendations sections of a business report, you can see that a similar structure holds.
In your essay, try to follow this structure for your essay sections.
Statement about the context of the question — explain why the question in important (either in the 'real' world or for the discipline of economics)
Give your answer to the question
Summarise your argument in support of this answer — this summary should match the order of your paragraphs
Decide on the most logical order of your paragraphs — this might be importance, chronology or causation, but the basic flow should be simple and clear
Start each paragraph with a sentence that clearly addresses the question itself — this will be your thesis for the paragraph and if a reader only read these opening sentences, they should make sense one after the other and provide a summary of your argument Follow the opening 'topic' sentence with your reasoning and evidence for why this opening statement is valid. Be specific, not general. The more detail you can bring in, the more expert you will sound and the more persuasive your argument will be
Conclusion Summarise your argument again — as you did in the intro (different words though!)
Restate your answer to the essay question
So what? — say what the significance of your answer is either in the 'real' world or to the discipline of economics
List the books / articles you read while researching your answer
Below you'll find two essays written by students last year. Bearing the above in mind, decide which one makes the clearer argument and which, therefore, got the higher mark.
In the year 2000, there were auctions of spectrum rights for third generation mobile telephones in several European countries. These auctions generated very different amount of revenue in different countries. How can this be explained?
Auction theory as a very useful brunch of game theory is of the great interest of modern economists. Among other reasons of its popularity stands direct importance of its ideas to modern businesses and governments. Nowadays any business sector is more or less competitive, which requires all it's participants to be dynamic and creative. Modernization and expansion is a vital part of modern business world. Governments, as owners of resources that allow businesses to expand and modernize, are always ready to sell those resources as it will eventually help businesses and certainly bring revenues.
The best way for government to sell available resources is to declare an auction. That's where auction theory comes into play. Modern auction theory is a very powerful tool for designing auctions of very profitable kind. Proper auction design will rise maximum amount of money for the government and provide companies with resources they need. However actions that maximize profits for the government have a direct influence also on the life of the citizens, as Dixit puts it: "...because of significant contributions the budget, auctions affect important macroeconomic magnitudes, such as interest rates".
So, auctions held by government, and to be more specific properly designed actions directly influence the life of modern country. In this essay I would like to make a kind of short review of auctions of spectrum rights for third generation mobile phones held in Europe in year 2000. The peculiarity of these auctions lies in the fact that revenues that were generated by European governments are different as a result of differently designed actions they held. This fact allows as to trace features of the auctions that were successful and resulted in relatively high revenues for the government.
There were 6 European countries to held spectrum right auctions in 2000. They were: United Kingdom, Austria, Germany, Italy, Netherlands and Switzerland. Let's start with United Kingdom as it was the first country to hold such kind of auctions.
Strategy that United Kingdom had chosen was selling 5 licenses during classical ascending auction. Auction resulted in huge revenues: 650 euros per capita. Firstly it should be said that auctions as any normal business activity should be competitive in order to be effective. UK spectrum auction was relatively competitive attracting 13 participants. There are several reasons why this action attracted so many participants. Firstly, UK was the first country in the world to hold spectrum rights auction. Participants were not completely aware of the usefulness of 3G cell phones, but were eager to get competitive advantage in the new generation mobile communication technology. Secondly, UK sold 5 licenses to the market with 4 major phone operators. This fact attracted new entrants, since at least one of the licenses can be potentially won by new entrants to the market. Both this facts generated highly competitive auction environment and limited possible collusions. Result of the auction was a huge success for UK government.
The next country to run spectrum rights auction in 2000 was Netherlands. This auction raised 170 euros per capita. Reason of such flop, comparing to the British result was lack of competition. When auction were run there were 5 major phone operators for 5 licenses to be sold. Few entrants decided to participate in the auction, since everybody was sure that 5 licenses will be distributed among market leaders. Another factor that made things even worse was the fact that that was an ascending auction. In this case with few participants there is a risk of collusion among market leaders. Netherlands would have generated much more money if they would some how encourage competition and change the action design in such a way that it would be possible for participants other than market leaders to place bids independently of each other to reduce collusion (sealed bid).
Italy generated 240 euros per capita and attracted 6 participants. Italy intentionally reduced amount of participants by imposing a requirements that participant of the auction must satisfy. Such situation combined with the fact that Italian auction was ascending could result in possible collusions among competitors. As a result wrong auction design resulted in low revenues.
Swiss auction was a real flop. They generated only 20 euros per capita. Here amount of participants was also artificially limited by allowing participants to join into the groups. And the price that government accepts was also reduced for some reason. Number of participants was sufficient to run profitable auction, but combination of officially permitted collusions and low reserve price resulted in absolutely insufficient revenues.
German and Austrian auctions were similar. Number of participants in both countries' auctions was low, which means that there were risks of collusion. Both countries sold licenses in blocks, allowing "number of winners be determined by bidders". Additionally Austrian government set a very low reserve price. Germany and Austria generated 615 and 100 euros per capita in revenue respectively. Germany designed auction in such a way that bids of two main market players were rationalized in a way that it resulted in high revenues.
Generally, the main difference in revenues generated from spectrum rights auctions can be explained by the difference in chosen auction design. Different auction design results in different amounts of money in revenues. Countries that tried to facilitate competitive bidding and limited the possibilities of collusion enjoyed high revenues.
Klemperer say that what really matters in auction design is "robustness against collusion and attractiveness to entry". Exactly the combination or lack of one of this factors resulted in the difference in the revenues generated by European countries. Any country that wants to increase revenues from auction must try to facilitate the competition among bidders by trying to make participation in auction as attractive as possible and eliminating any barriers for participation. There should be no cooperation between participants, as it will result in lower bids and as a consequence in low revenues. Countries should not choose auction design that facilitates collusion, as ascending auction in our case.
Of course there are several other reasons for difference in revenues, among them there is a fact that UK as a country that run the first spectrum rights auction in the world, might have enjoyed high revenues simply because participants were new to the licenses and had no idea of their true value. Overall economic situations in the counties as well as political might also result in differences in revenues. But the main reason for difference in profitability of the spectrum licenses auctions is difference in auction designs which were effective in some countries and not in the others.
A.K. Dixit and S. Skeath, Games of Strategy , 2nd edition, Norton, 2004
Paul Klemperer, Auctions: Theory and Practice Electronic version of book on http://www.paulklemperer.org/index.htm
In the year 2000, European auctions of 3G mobile telecommunication licenses raised over 100 billion euros in government revenues. The countries that participated were United Kingdom, Netherlands, Italy, Switzerland, Germany and Austria. There was a big differential between revenues raised in each country with United Kingdom leading at 650 euros per capita and Switzerland coming in last at 20 euros per capita. The reasons for this big discrepancy in revenues is likely due to poor auction designs and the sequence in which the auctions took place.
When it comes to auction design, the two crucial components are attracting entry and preventing collusion. Ascending auctions encourage bidders to act collusively and deter weaker potential bidders as they know that the stronger bidder will always out bid him. On the other hand, (first-price) sealed-bid auctions act in the opposite direction from ascending auctions. It does not give bidders a chance to collude and encourages weaker bidders to participate. However, the disadvantage of using a sealed-bid auction is that it is more likely to lead to inefficient results than an ascending auction. The reason for this is that sometimes bidders with a lower value may beat opponents with a higher value. Hence, there is no perfect auction design and they must be customized to suit different environments and targets.
United Kingdom was the first to hold the auctions and they are a good example of how a well-planned auction design and good marketing strategies can lead to a favourable outcome. As there were five licenses and 4 incumbents, they had an ascending auction. To prevent collusion, each license could not be shared and each bidder was allowed no more than one license. Also, the fact that at least one license was available to new entrants lead to fierce competition from nine new entrants. To top it all off, UK had a solid marketing strategy which was planned over three years (1997 - 2000). All this helped contribute to UK raising 39 billion euros and being the most successful out of all the countries that took part in the 3G auctions.
Netherlands, Italy and Switzerland made the mistake of following UK and carrying out an ascending auction when a sealed-bid auction would have served them better. This resulted in revenues less than that achieved by UK.
In the case of Netherlands, they had five licenses and five incumbents. This deterred new entrants as well as facilitated collusion. For example, Deutsche Telekom colluded with local incumbents to bid for a 3G license. A sealed-bid would have worked better as this would have discouraged joint bidding, raise higher revenues as well as give new entrants a glimmer of hope.
Italy had their auction next but failed to learn from Netherlands and UK. Their auction design was not robust and failed to adapt to the environment in Italy. They adopted the UK design but had the additional rule that if bidders did not exceed licenses, the number of licenses would be reduced. They did not realize that having one more bidder than license does not assure that the outcome will be competitive. Also, Italy had failed to anticipate that firms would react differently to those in Netherlands and UK as they now had more information. Hence, weaker bidders were discouraged by previous auctions and did not bother to participate and since the participation rate was low, it made it easier for the strong bidders to collude. A bad auction design that was not tailored to the Italian environment and a low reserve price resulted in Italy only earning less than 25 billion euros.
Switzerland was the most unsuccessful amongst all the countries that held the auctions. It raised only 20 euros per capita in its ascending auction and this can be attributed to an unfeasible auction design, badly formulated rules and an absurdly low reserve price. Since the beginning, weaker bidders were deterred by the auction form. They felt that they did not stand a chance against the strong bidders and hence did not bother participating. This resulted in little competition. Furthermore, The Swiss government committed auction suicide when they permitted last-minute joint-bidding! This resulted in nine bidders colluding to become just four. The last mistake that the Swiss government made was to set a reserve price that was way too low. Since there were four licenses and four bidders, bidders ended up paying only the reserve price.
Germany and Austria chose a more complicated auction design.
Germany's auction design was an ascending auction of twelve blocks of spectrum from which bidders could create four three-block licenses or six two-block licenses. Germany's auction design was very susceptible to collusion and deterring new entrants but they were lucky and managed to earn high revenues.
Austria, on the other hand, adopted Germany's auction design but was not so lucky and only earned 100 euros per capita. The reason for this was that there were 6 bidders competing for 12 blocks of spectrum and a very low reserve price (one-eight of the reserve price in Germany). So instead of trying to get three blocks of spectrum, the bidders divided the 12 blocks of spectrum equally and paid the reserve price. This reason lead to Austria earning less per capita revenue than UK and Germany.
The other factor that affected the amount of revenue earned by each country was the sequence in which the auctions took place. Looking at the results of the 3G auctions held in 2000, it can be seen that the most successful auctions were the first of their type (United Kingdom and Germany). The reason for this is that between auctions, bidders learnt from previous auctions, came up with new strategies and learnt more about their rivals. However, the auction designs remained almost the same and were unable to keep up with the new ideas the bidders had come up with. This resulted in the later auctions not being as successful as the first.
In conclusion, the reason for the different revenues earned amongst the countries that took part in the 3G auctions is due to the auction designs and the sequence in which they took place. Revenues depend on how well the auction design is able to attract entry and prevent collusion. Also, it has to be able to adapt to new environments. For example, a good auction design takes into account the information bidders have and the knowledge they have gained from previous auctions. A sensible reserve price is of high importance as well and should not be overlooked like in the case of Switzerland and Germany. Lastly, auction design is not "one size fits all" and the failure of the government to design an auction that suited the country's environment lead to different revenues being earned.
A.K. Dixit and S.Skeath, Games of Strategy, 2 nd edition, Norton, 2004
Professor Kenneth Binmore, "Economic Theory Sometimes Works"
Up: Home : Study Guidance > Effective Writing and Referencing > Structuring an Essay
- Structuring an Essay
The standard way to think about structuring an essay is in three parts.
This should explain why the question is important. It should also signpost how you are going to tackle the question in the main body of the essay and it can include the conclusion of your argument.
The introduction should be short and concise – you rarely get any marks for it directly. Most students spend too long on their introductions, at the expense of their analysis and conclusion (especially in exam questions).
This should be a series of paragraphs. Each might be a self-contained argument (which follows the Thesis – Justification – Support rhetoric) or the argument might be spread over several paragraphs (if your justification is long, for example).
It is important to make sure your paragraphs flow logically. Typically they will be ordered in terms of importance, although other orderings are possible (e.g. chronological).
This should restate your main argument (although not in exactly the same words as the introduction). You can remind readers why the issue is important, and make some tentative policy implications from your analysis.
It might also be possible to mention other considerations which are possible areas of future investigation but which you haven’t had time/space to address.
See Bray et al . for more about structure.
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How to Write a Good Economics Essay
Last Updated: March 7, 2023 References
This article was co-authored by Emily Listmann, MA . Emily Listmann is a private tutor in San Carlos, California. She has worked as a Social Studies Teacher, Curriculum Coordinator, and an SAT Prep Teacher. She received her MA in Education from the Stanford Graduate School of Education in 2014. This article has been viewed 125,226 times.
A good economics essay requires a clear argument that is well-supported by appropriately referenced evidence. Research your topic thoroughly and then carefully plan out your essay. A good structure is essential, as is sticking closely to the main essay question. Be sure to proofread your essay and try to write in formal and precise prose.
Preparing to Write Your Essay
- For example a question such as “Discuss the macroeconomic consequences of rising house prices, alongside falling interest rates” could be divided into 2 parts: 1 part could be on the effects of rising prices, and 1 on the effects of falling interest rates.
- In this example you could begin by discussing each separately and then bringing the 2 together and analysing how they influence each other.
- Be sure to keep the question at the forefront of your mind and don’t veer off topic.  X Research source
- Be sure that you understand all the key terms that you are being asked about.
- Try to keep your reading focussed closely to the essay question.
- Don’t forget to look at any lecture or class notes you have made.
- 3 Come up with a thesis statement . A thesis statement is the main argument you will make in your essay. It should be 1-2 sentences long and respond to the essential question that’s being asked. The thesis will help you structure the body of your essay, and each point you make should relate back to the thesis.
- Once you have put together a list of key points, then try to add in some more detail that brings in elements from your research.
- When you come to write out your essay, you can develop a paragraph based on each point.
- All of the evidence and explanation will be in the main body of the essay.
- Order the key points in the body of your essay in such a way that they flow logically.
- If you are writing a longer essay, you can break the main body into different sections.  X Research source
- If you have a word limit, be sure to take this into account when you are planning.
- Allocate yourself a rough number of words per section.
- The introduction and conclusion can be just a paragraph each.
Writing the Essay
- What your essay is about.
- What material you will cover in the essay.
- What your argument is.  X Research source
- Having this stated clearly at the start can help you to stay focussed on the question as you work your way through the essay.
- Try writing out this one or two sentence statement and sticking it up in front of you as you write, so it’s stays at the forefront of your mind.
- Try to begin each paragraph with a sentence that outlines what the paragraph will cover.
- Look at the opening sentence of each paragraph and ask yourself if it is addressing the essay question.  X Research source
- Try to engage with arguments that run counter to yours, and use the evidence you have found to show the flaws.
- It might help to imagine someone reading the essay, and anticipating the objections that he might raise.
- Showing that you have thought about potential problems, and you can make an argument that overcomes them, is a hallmark of an excellent essay.  X Research source
- If there is conflicting evidence, discuss it openly and try to show where the weight of the evidence lies.  X Research source
- Don’t just ignore the evidence that runs counter to your argument.
- In the conclusion you can add a few sentences that show how your essay could be developed and taken further.
- Here you can assert why the question is important and make some tentative suggestions for further analysis.
Proofreading and Making Revisions
- As you read through it, think about how closely you stick to main overarching question.
- If you notice paragraphs that drift off into other areas, you need to be tough and cut them out.
- You have a limited number of words so it’s essential to make every one count by keeping tightly focussed on the main question.
- Think about how you use the evidence too. Do you critically engage with it, or do you merely quote it to support your point?
- A good analytical essay such discuss evidence critically at all times.
- Even if the evidence supports your argument, you need to show that you have thought about the value of this particular piece of data.
- Try to avoid making any assumptions, or writing as if something were beyond dispute.  X Research source
- Remember an academic essay should be written in a formal style, so avoid colloquialisms.
- Avoid contractions, such as “don’t”, or “won’t”.
- Try to avoid paragraphs that are more than ten or fifteen lines long.
- Think about how it looks on the page.  X Research source
- Always include a bibliography, but don’t include references to things you haven’t read or didn’t inform your argument.  X Research source
- Your teacher will know if you just add a load of titles into your bibliography that are not evidenced in the body of your essay.
- Always follow the bibliography format used by your department or class.
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You Might Also Like
- ↑ http://www.economicshelp.org/help/tips-economic-essays/
- ↑ http://www.writing.utoronto.ca/advice/planning-and-organizing/organizing
- ↑ http://carleton.ca/economics/courses/writing-preliminaries/academic-essay-writing/
- ↑ https://www.economicsnetwork.ac.uk/archive/lse_writing/page_11.htm
- ↑ http://homes.chass.utoronto.ca/~mcmillan/writing.pdf
- ↑ https://www.royalholloway.ac.uk/economics/documents/pdf/essaywriting-departmentofeconomics.pdf
About This Article
Before you begin writing your economics essay, make sure to carefully read the prompt so that you have a clear sense of the paper's purpose and scope. Once you have read the prompt, conduct research using your textbook and relevant articles. If you cannot find research materials, ask your instructor for recommendations. After your research is done, construct a 1-2 sentence thesis statement and begin outlining your main ideas so that your essay will have a clear structure. Make sure to leave time to write a draft and revise your work before it is due. If you want to learn more, like how to cite the sources you used for your essay, keep reading the article! Did this summary help you? Yes No
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How To Write A Good Economics Essay
In the Singapore-Cambridge GCE ‘A’ Level Economics (H2), the essay paper accounts for 60 per cent of the total marks. Therefore, good essay writing skills are essential for obtaining a good grade in the examination. Although there is no one best way to tackle an essay question, students can use “ The 8-Step Approach ” to construct a good answer.
The 8-Step Approach
Step 1: Read the question carefully.
Step 2: For a two-part question, look at the mark that each part carries as it indicates the length of the answer expected. Further, consider part (b) before attempting part (a) to prevent any overlap between the answers.
Step 3: Pay particular attention to key words as they indicate the content areas on which you are required to focus.
Step 4: Pay particular attention to command words as they indicate what you are asked to do. A list of command words commonly used in the GCE ‘A’ Level Economics paper together with their explanations can be found on Economics Tuition Methodology.
Step 5: Make a note of the relevant economic theories and concepts that come to your mind without paying attention to their degree of relevance.
Step 6: Prioritise the relevant economic theories and concepts in accordance with their degree of relevance.
Step 7: If the list of relevant economic theories and concepts is too long, consider ways to merge them. Otherwise, what you did in Step 6 should help you decide which of them to apply and which of them to ignore.
Step 8: Organise the relevant economic theories and concepts that you have decided to apply in such a way that there is a structure to the answer. The answer should comprise an introduction, body and conclusion. It should be about four pages in length, excluding the diagrams which you are required to draw to substantiate your points.
Consider the following question: Discuss whether the growth of the Chinese economy would be detrimental to the Singapore economy.
The introduction should define the economic terms in the question. It should also give an overview of the approach in a clear and concise manner. For structured questions, however, an overview of the approach may not be necessary. You should not form a judgment in the introduction. In other words, you should not use the conclusion as the introduction.
Economic growth refers to an increase in real national output. The effects of the growth of the Chinese economy on the Singapore economy can be discussed in terms of the effects on the balance of payments, national output and hence national income, unemployment, inflation and income equity.
The body should contain the thrust of the answer, usually comprising a few paragraphs, with each paragraph containing only one main idea. The main idea in each paragraph should be succinctly conveyed in the topic sentence, with the rest of the paragraph elaborating the topic sentence by giving details, examples, facts and statistics. The topic sentence is usually, but not always, the first sentence in the paragraph. Sometimes, the topic sentence can be the only sentence in the paragraph if it is self-explanatory.
Example (A Paragraph of the Body)
The growth of the Chinese economy may lead to a deterioration in the balance of payments of Singapore. The balance of payments is a record of all the transactions between the residents of the economy and the rest of the world over a period of time and is made up of the current account and the capital and financial account. The production of low value-added goods such as disk drives requires low-skilled labour. Due to its larger amount of low-skilled labour, China has a comparative advantage over Singapore in producing low value-added goods. When the Chinese economy grows, the supply of the low value-added goods produced in China will increase which will lead to a fall in the prices. When this happens, the demand for the low value-added goods produced in Singapore will fall as people switch to the low value-added goods produced in China. Therefore, the growth of the Chinese economy will lead to a fall in Singapore’s exports of low value-added goods. For example, Singapore’s exports of hard disks have decreased partly due to the growth of the Chinese economy. Furthermore, due to the same reason, Singapore’s imports of low value-added goods from China will increase. When these happen, the current account and hence the balance of payments of Singapore will deteriorate. When the Chinese economy grows, households will become affluent which will lead to a larger consumer market. Therefore, the growth of the Chinese economy will attract foreign direct investments away from Singapore. For example, the growth of foreign direct investment in Singapore has generally decreased over the last two decades partly due to the growth of the Chinese economy. Furthermore, due to the same reason, firms in Singapore will increase investments in China. When these happen, the capital and financial account and hence the balance of payments of Singapore will deteriorate.
For part (a) questions, the conclusion can be a summary or a recommendation, which is more for aesthetic purpose. For full-length and part (b) questions, the conclusion should be an evaluation, which carries 5 out of the total 25 marks.
In the final analysis, the benefits of the growth of the Chinese economy to the Singapore economy are likely to outweigh the costs. Due to the large amount of high-skilled labour and hence comparative advantage in producing high value-added goods in Singapore, Singapore’s exports consist of mainly high value-added goods with low value-added goods accounting for a smaller proportion of total exports. Therefore, economic growth in China is likely to lead to a larger increase in exports of high value-added goods than the decrease in exports of low value-added goods in Singapore which will lead to an increase in aggregate demand resulting in an increase in national output and hence national income. This is particularly true in view of the fact that Singapore is continually moving up the value-added chain. Indeed, the exports of Singapore have been increasing over the last few decades when China has been experiencing rapid economic growth. Furthermore, Singapore is a small economy that is highly dependent on external demand with the domestic exports accounting for a large proportion of the aggregate demand. Therefore, the increase in exports is likely to lead to a substantial increase in aggregate demand resulting in a substantial increase in national output and hence national income. In addition, as Singapore imports a large amount of intermediate goods due to lack of factor endowments, the increase in imports of cheaper intermediate goods from China is also likely to be very beneficial to the Singapore economy as the cost of production in the economy is likely to fall substantially.
In the Singapore-Cambridge GCE ‘A’ Level Economics examination, you are given only 45 minutes to plan and write the answer to an essay question. As you need about 35 to 40 minutes to write the answer, you have only about 5 to 10 minutes to plan the answer.
When you are planning the answer to an essay question, you should not be too concerned with producing the ‘standard answer’ because it does not exist. What is required of you is to show evidence that you have understood the question and that you have the ability to apply relevant economic theories and concepts to answer the question in a coherent manner that demonstrates the five core thinking skills: knowledge, comprehension, application, analysis and synthesis, and evaluation. Knowledge and comprehension are often considered the lower-order thinking skills. Application, analysis and synthesis, and evaluation are often considered the higher-order thinking skills.
When you are writing the answer to an essay question, you are encouraged to use diagrams that are correctly labelled to illustrate understanding of the relevant economic concepts. However, you need to take note that diagrams that are incorrectly explained or incorrectly labelled may do more harm than good. In contrast, diagrams which are correctly explained and correctly labelled illustrate understanding of the relevant economic concepts and substantiate your explanations and therefore will be awarded accordingly.
You should not write everything that you know about a given content area. In other words, you should answer the essay question directly, with the help of the key words and the command words, taking into consideration the marks allocated. Indirect answers and irrelevant answers will gain no marks.
You should refer back to the essay question occasionally to stay focussed on what is required of you to do. This is to avoid writing off the point.
Legible handwriting is crucial to obtaining a good grade in the subject. Although you will not get bonus marks for legible handwriting, you will not get any marks with illegible handwriting.
Good grammar will enhance the quality of the answer.
Essay writing skills will be discussed in greater detail in economics tuition by the Principal Economics Tutor .
Economics Tuition @ Economics Cafe Principal Economics Tutor: Mr. Edmund Quek
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A State-Ranker’s Guide to Writing 20/20 Economics Essays
So, you want to know how to improve your preliminary and HSC economics essay...
1. Introduction to this Guide
So, you want to know how to improve your preliminary and HSC economics essay writing? Look no further! In this guide, I’ll be covering key tips to help YOU smash the structure, amaze with your analysis, conquer the contemporary, and ultimately master the mystery of maximising your marks.
My name is Cory Aitchison, currently one of the Economics tutors at Project Academy . I completed the HSC in 2018, achieving a 99.95 ATAR as well as two state ranks — 6th in economics and 12th in chemistry. Graduating from Knox Grammar School, I also topped my grade in economics and was awarded Dux of the School for STEM. Believe it or not, at the beginning of Year 11 I initially struggled with economics due to the transition in conceptual thinking required in approaching economic assessments in comparison to my other subjects such as English. However, through Year 11 and Year 12, I built up key tips and strategies — that I’ll be sharing with you in this guide — to help me not only consistently achieve top marks in my internal assessments, but to ultimately go on to achieve the results I did in the HSC.
2. The Correct Way to Write
First off, you need to understand something: HSC economics essays are NOT english essays! They aren’t scientific discussions, nor geography reports, nor historical recounts. They’re unique and often quite different from other essays that you might’ve done previously in high school. The style of writing and approach to answering questions can be confusing at first, but follow these tips and you’ll be ready in no time:
Phrasing should be understandable and concise
Unlike some subjects where sophisticated phrasing is beneficial to getting marks, HSC economics essays should emphasise getting your point across with clarity. This means don’t run your sentences on for too long, be aware of any superfluous words, and make sure you actually understand yourself what you’re trying to say in a sentence.
GOOD: “An increase in interest rates should lead to decreased economic growth.”
NOT GOOD: “As a result of a rise or increase in interest rate levels from their previous values, the general state of economic activity in the domestic economy may begin to decrease and subsequently indicate the resultant situation of a decrease in economic growth.”
“Understandable” does not mean slang or lacking in terminology
Just because you want to get a point across, doesn’t mean you should resort to slang. In fact, using economic terminology is a strong way to boost your standing in the eyes of the marker — if you use it correctly! Always make sure you use full sentences, proper English grammar, and try and incorporate correct economic terms where possible.
GOOD: “This was a detrimental outcome for the economy.”
NOT GOOD: “This was a pretty bad outcome for the economy.”
GOOD: “The Australian Dollar depreciated.”
NOT GOOD: “The Australian Dollar decreased in value.”
Analysis should be done using low modality
Modality just refers to the confidence of your language — saying something “will” happen is strong modality, whereas saying something “might” happen is considered low modality. Since a large portion of economics is about applying theory, we have to make sure that we are aware that we are doing just that — talking about the theoretical, and so we can’t say for sure that anything will happen as predicted.
Some useful words include:
May, Might, Should, Could, Can theoretically
Don’t use words like:
Must, Will, Has to, Always
3. How to use Statistics
“What’s most important is that this contemporary is used to bring meaning or context to your argument…”
Using contemporary (statistics) can often seem straightforward at first, but using it effectively is usually harder than it looks. Contemporary generally refers to applying real-world facts to your analysis to help strengthen (or weaken) the theoretical arguments. This can include many different statistics or pieces of information, including:
- Historic economic indicators, such as GDP, inflation, GINI coefficients, exchange rates, or unemployment rates
- Trends or economic goals, such as long-term GDP growth rates, or the stability band for inflation
- Names of economic policies, such as examples of fiscal or microeconomic policies
- Specifics of economic policies, such as the amount spent on infrastructure in 2017
Whatever statistics you deem relevant to include in your essay, what’s most important is that this contemporary is used to bring meaning or context to your argument — just throwing around random numbers to show off your memorisation skills won’t impress the marker, and in fact might appear as if you were making them up on the spot. Rather, your use of contemporary should actively improve your analysis.
GOOD: “Following a period of growth consistently below the long-term trend-line of 3%, the depreciation of the AUD to 0.71USD in 2017 preceded an increase in economic growth to a 10-year high of 3.4% in 2018.”
NOT GOOD: “Economic growth increased by 1 percentage point in 2017 to 2018”
NOT GOOD: “GDP was $1.32403 trillion in 2017”
GOOD: “The 2017 Budget’s Infrastructure Plan injected $42 billion into the economy — up 30% from 2016’s $31 billion, and 20% higher than the inflation-adjusted long-term expenditure.”
NOT GOOD: “The 2017 Budget’s Infrastructure Plan injected $42 billion into the economy”
That in mind, don’t think that these statistics have to be overly specific. As long as the general ideas gets across, it’s fine. You don’t need to say “$1,505,120” — just “$1.5 million” will suffice.
Ask yourself: if I get rid of the contemporary from my paragraphs, does the essay still have enough content?
Further, don’t get roped into the “contemporary trap” — where you fall into the mindset that “if I memorise all these statistics, my essay will get good marks”. Including numbers and contemporary at the expense of having a robust theoretical explanation and analysis will definitely be detrimental in getting you top marks. Particularly in trial exams and the HSC when you’ve got all these numbers floating in your head, it can be tempting to try and include as many as you can (often just because you can!). To avoid this, always try and focus your arguments on analysis and syllabus content first, contemporary second. Ask yourself: if I get rid of the contemporary from my paragraph, does the essay still have enough content?
4. Must Have Insightful “However”s
If you really want to extend your analysis and show the marker that you know your stuff, including insightful “however”s is a strong way to do it. What I mean by this is that for each of your paragraphs, try and include a counterpoint that highlights the flexible nature of economic theory. There are broadly two kinds of “however”s:
These are counterpoints that are based on theory — often there will be theoretical limitations for many of the concepts you come across in economics. It’s always important to include these limitations as it reinforces your knowledge of the actual content of economics.
“Although the Budget and fiscal policy can be effective at stimulating economic growth, it is also restricted by the “implementation time lag” limitation since it is only introduced annually.”
These are counterpoints that are based on contemporary — highlighting how although something should happen theoretically, this isn’t usually what is observed in reality. This can be particularly powerful in that it combines your knowledge of theory with your analysis of contemporary.
“Despite the expansionary stance that the RBA adopted in 2012–2016 for monetary policy, Australia’s annual GDP growth rate has remained below the trend rate of 3% — against the theoretical expectations. This could be attributed to factors such as …”
5. How to Interpret the Question
When you first look at a question, before you even put pen to paper, you need to come up with a plan of attack — how can you ensure that you answer the question correctly, and give the markers what they want? There are three main points to look for when interpreting essay questions:
Knowing your verbs
As you may (or may not) know, NESA has a bank of words that they like to pull from when writing questions, and these words impact how they want their question answered. These verbs should help steer your analysis onto the right path. For example:
Explain: “Relate causes and effects”
To answer these questions, you have to demonstrate a thorough understanding of how theory and events impact each other and the economy. This verb particularly emphasises the idea of a process — you need to be able to make clear links as to how each step leads to the next, rather than just jumping to the outcomes.
Analyse: “Draw out and relate implications”
These questions usually wants you to investigate the connections between different aspects of economic theory. Generally this involves showing a holistic understanding of how different areas (such as micro- and macroeconomic policies) come together to make a cohesive impact on the economy. It usually helps to think back to the syllabus and how the points are introduced when figuring out which ideas to link together.
Assess/Evaluate: “Make a judgement based on value/a criteria”
These require you to not only critically analyse a topic but also come to a conclusion given the arguments you provided. This type of question usually gets you to make a judgement of the effectiveness of some economic theory — such as the ability for economic policies to achieve their goals. Make sure you actually include this judgement in your answer — for example, say things like “strong impact”, “highly influential”, “extremely detrimental”.
Discuss: “Provide points for and/or against”
Similar to assess, discuss wants you to provide arguments towards and against a particular topic. Although it doesn’t require a specific judgement to be made, it does place greater emphasis on showing a well-rounded approach to the argument — providing relatively equal weightings towards both the positive and negative sides of the discussion.
Linking to the syllabus
When trying to understand what the question wants from you, I found the best way to approach it is to consider what points in the syllabus it is referring to (To do this, you need to have a solid understanding of the syllabus in the first place). Once you’ve located it, try drawing upon other topics in the vicinity of that dot point to help you answer the question.
For example, if the question mentions “trends in Australia’s trade and financial flows”, then you know from the syllabus that you probably need to talk about value, composition and direction in order to get high marks. Further, it may also be worth it to bring in ideas from the Balance of Payments, as this is the next dot point along in the syllabus.
Digging into the source
For essay questions that provide a source for you to include in your answer, this is another goldmine from which you can discern what the marker really wants. If the source mentions microeconomic policy, it probably wasn’t on accident! Even if it may not be obvious how to link that to the question immediately, try and draw upon your knowledge and implications and see if there’s a different angle that you might be missing.
6. Putting it All together — Structuring your essay
My essays usually consisted of four main parts: an introduction, a background paragraph, body paragraphs, and a conclusion.
Your introduction should not be long. I rarely wrote an introduction longer than three sentences.
First sentence: Answer the question (thesis)
Try and answer the question, while including the main key words of the question in your answer. Don’t directly restate it — instead, try and add meaning to it in a way that represents what you’re trying to get across in your essay.
For example: if the question was “Assess the impact of microeconomic policy in improving economic growth in Australia”, my first sentence might be “Microeconomic policy has had a significant impact in increasing aggregate supply and thus long-term economic growth in Australia since the 1960s”.
Next sentences: Introduce your arguments/paragraphs
In this part, it’s fine to almost list your paragraphs — there’s no need to do a whole sentence explaining each. That’s what the paragraphs themselves are for.
For example: using the same question as above, my next sentence might be “Although trade liberalisation may have been detrimental for short-term growth in manufacturing, policies such as competition policy and wage decentralisation have been highly effective in fostering economic growth in Australia”.
The aim of a background paragraph is threefold: to get across the main theory that underpins your argument; to establish the economic context for your argument; and to show the marker that you “know your stuff”.
For example, if the essay was on monetary policy, you may want to describe the process of Domestic Market Operations (how the reserve bank changes the cash rate) in your background paragraph, so that you don’t need to mention it each time you bring up changing stances. Further, it may be good to showcase the current economic climate — such as GDP growth rate and inflation — to give context to your analysis in your essay.
Some ideas for what to include in this paragraph include:
- Key theory such as DMOs or the rationale for macroeconomic policies
- Economic indicators that provide context to the time period that you’re working in, such as growth rates, inflation, unemployment rates, exchange rates, cash rates, etc.
- A brief description of the recent Budget (if talking about fiscal policy), including the stance and outcome
Bear in mind that this paragraph shouldn’t be too long — it isn’t the focus of your essay! Instead, aim for around 100–150 words at most. At this point in your essay, it may also be good to include a graph (more on this later).
There’s no set rule for how many body paragraphs to include in your essay — I generally aim for at least 4, but there’s no real limit to how many you can (or should) write! Unlike english essays, it’s totally acceptable to just split a paragraph in two if you feel like the idea is too large to be written in one paragraph (as long as each paragraph makes sense on its own).
When writing a paragraph, I usually follow this structure:
This is where you answer the question, and outline your argument or idea for this paragraph. If you are doing a discuss/assess/evaluate essay, try and make your judgement or side obvious. For example: “Trade liberalisation has been detrimental in its impact on economic growth in manufacturing industries”.
These sentences are where you bring together the theory and contemporary to build up your argument. Remember, the theory should be the focus, and contemporary a bonus. Try and weave a “story” into your analysis if you can — you should be showing the marker how everything fits together, how causes lead to effects, and ultimately bringing together relevant economic concepts to answer the question. Feel free to also include graphs here when they help strengthen your argument.
Fit in your “however” statements here. For discuss questions, this however section may take up a larger part of the paragraph if you choose to showcase two opposing arguments together.
Link your argument back to your overarching thesis, and answer the question. Following on from your “however” statement, it can often be a good idea to use linking words such as “nevertheless”, “notwithstanding”, or “despite this” to show that taking into account your arguments presented in the “however” statement, the overarching idea for the paragraph still remains.
Like the introduction, your conclusion should not be overly long. Rather, it should briefly restate the arguments made throughout your essay, and bring them all together again to reinforce how these points help answer the question.
Aggregate Demand / Supply Graph
Graphs are a great way to add extra spice to your essay — not only does it help strengthen your explanations of economic theory, it also makes it look like you wrote more pages than you actually did! Graphs, such as aggregate demand graphs, business cycle graphs, and Phillips curves, can be great in reinforcing your ideas when you mention them in your essay. They usually come either in background paragraphs or body paragraphs, and it’s usually best to draw them about a quarter to a third of the page in size. It’s also good practice to label them as “Figure 1” or “Graph 1”, and refer to them as such in your actual paragraph.
Although they can be beneficial, don’t try and force them either. Not all essays have appropriate graphs, and trying to include as many as you can without regards for their relevance may come across negatively in the eyes of the marker.
8. How to Answer Source Questions
If your essay question involves a source, try and refer to it multiple times throughout your essay. For example, this can be in the background paragraph and two of your body paragraphs. Rather than just adding in an “…as seen in the source” to one of your sentences, try and actively analyse it — show the marker that you understand why they included it, and how it actually helps strengthen your arguments.
9. Plan You Essay
Don’t be afraid to use the first page of your answer booklet as a planning page. Taking a couple minutes before you answer the question to lay out your scaffold for body paragraphs is a great first step to helping ensure that you actually end up answering the question to the best of your abilities. It also serves as a great reminder to keep checking as you finish each paragraph to ensure that you actually wrote what you intended. Just make sure to make it clear to the marker that those scribbles on the page are just a plan, and not your actual essay!
10. How to Prepare for Essays in the Exam
I find it much better to prepare paragraphs and ideas that you can draw upon to help “build up” a response during the exam itself.
Don’t go into the exam with a pre-prepared essay that you are ready to regurgitate — not only are there too many possibilities to prepare for, but it’s also unlikely that you’ll actually answer the question well with a pre-prepared response.
Instead of memorising sets of essays before the exam, I find it much better to prepare paragraphs and ideas that you can draw upon to help “build up” a response during the exam itself. What I mean by this, is that in your mind you have a “bank of different paragraphs” and ideas from all the topics in the syllabus, and when you read the exam, you start drawing from different paragraphs here and there to best formulate a response that answers the question. This allows you to be flexible in answering almost any question they can throw at you.
On top of this, ensure you have a solid foundation in both the theory and contemporary — knowing what statistics or topics to include in your essay is useless knowledge unless you have the actual content to back it up.
Now that you know the basics of how to write a good HSC economics essay, it’s time to start practising! Have a go, try out different styles, and find what works best for you. Good luck!
If you would like to hear more from me and get the PDF version of the guide complete with additional diagrams and tables, click here !
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What is the best method of structuring an Economics Essay
Before beginning to write an essay, it is vital to write a plan. This won't have to take more than 5 minutes but helps you to write efficiently and with clarity. To do this, first read through the question carefully and pick out the key words within it. Then write a couple of brief bullet points on what ideas you'll mention within your essay. Then whilst writing your essay keeping looking back over your plan and your essay will stay on topic.
The best method of structuring an essay is to split it into 3 key parts: the introduction, body and conclusion.
In the introduction it is best to first define all key definitions contained within the question (e.g. "Economic Growth"). You can then go on to mention any key facts about issue in question and why the question is relevant.
This should be divided into a paragraph per idea put forward to address the question. It is best to focus on 2-3 ideas you can explain fully instead of trying to rush more. It is also good to follow the structure of first presenting your idea, explaining it using economic terminology and then mentioning any issues or disadvantages with it. It is also vital in Economics when explaining your ideas to use diagrams if they are relevant as it is a fantastic way to show examiners you understand the economics behind it. It is also best to make them reasonably big (about 1/3 a page) and to give them a Figure number and title (e.g. Figure 2: The Effects of Increased Government Spending) in order to make it clear what you're showing in the diagram and making it easy to reference back to. Also when drawing the diagrams it is best to first do it in pencil so you're able to change any mistakes you make.
Top Tip: it is invaluable to keep up to date with economics in the news and mentioning any relevant facts or figures you have seen in you essay. This shows you're going the extra mile with your studies.
In the conclusion, you can summarise your ideas argued in the body of the essay and come to a final thought on it. This is also a good place to mention any economic knowldge you know relative to this topic, although it is better to keep your conclusion relatively short but concise, in order to focus on the body of your essay where you can best demonstrate your learning.
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