A recent article in the New York Times on students interviewing for Harvard here (thanks to Newmarks Door for the pointer) is food for thought for students wanting to study in top universities. I have had the priviledge of discussing future education plans with many students since coming to HKU 6 years ago; here I'll outline a few thoughts that might help you in your plans.
1) EVERYONE wants to go to Harvard- and nearly everyone who applies fails to get in. So be realistic.... apply by all means, but have a plan B, because you'll probably need it. And just to be safe, have a plan C, D, and E as well. When I talk to students, nothing worries me more than those who have not thought seriously about what they'll do if their plans don't work out. Life is too valuable to waste, waiting and hoping that you might get in if you apply again next year.
2) I DIDN'T go to Harvard. (If you're curious, you can trace my progression through universities here or here). There are many other excellent universities in the world, and going to any good university will open many excellent career opportunities to you. Sure, going to Harvard would give you an advantage, but there are other ways of achieving your career objectives.
Aside from those general principles, a few more that are specific to students contemplating postgraduate studies in Economics:
3) If you are not desperate to do research, than a PhD is not for you. Some top undergraduate students choose to stay on at university simply because it is what they know. Like most things in life that are worth doing, a PhD is difficult and requires persistence. If you start a PhD without complete commitment, you'll probably drop out without finishing, wasting a few years of your life in the process. By the end of your second year of undergrad, you should have some good ideas on where you WANT to be in future. Actively work towards that end.... don't just drift into further studies.
4) As an application of 3), if you can be persuaded NOT to do a PhD, you probably should not do one. (If you come to me for advice, I will first try to persuade you that you should do something else).
5) You MUST take lots of Maths courses. You can bluff your way through most undergrad courses with very limited maths. But economics gets increasingly mathematical the further you study; writing descriptive essays, no matter how polished, will probably not get you a PhD, let alone a job.
6) And finally, a PhD from a bottom-ranked university may give you very few career choices. Don't loose sight of the role of your studies- they're ultimately a means to obtaining the career you want, not an end in themselves.