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Gyung Jeong
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A few decades ago, not many people expected China to become a country with one of the biggest economies in the world. However, as we are all aware, this is no longer the case. Many people expect that China’s economy may soon surpass that of the US or EU in a few years. What does this tell us? This paper by Ravallion provides guidance on how to improve all of our economies, although he specifically only talks about Africa. This paper explicitly discusses the relationship between China and Africa, and how Africa can learn from China’s successes and failures. Obviously, as the author points out, there were some problems caused by China’s way of improving its economy and fighting against poverty. There are also some key differences between China and Africa. However, China’s overwhelming successes prove that it is worthwhile to learn from its story. One of the most significant lessons we can learn from China is its use of “strong state institutions and governments.” Although it is a dictatorship, strong leadership by the government has led the country to success. Through policy implementations and public investments, the China’s government has obviously been doing something right. Of course the extent of how much control their government has over the people is not ideal, but a stronger government than the one Africa currently has may result in an improved economy. As the author points out, Africa has seen a significant political change in recent times and is still going through political turmoil. With strong governments and policies, this will hopefully be relieved. Naturally, African has to have its own form of reform and strategy to fight against poverty, but the example of China can be a model for them to use and improve. This paper reminded me of South Korea and its rapid postwar economic growth. As we talked about in the class, just like China, South Korea was one of the poorest countries in the world only a few decades ago. However, it is now one of the top 10~20 economies in the world. After the Korean war, South Korea implemented a strong government (dictatorship) that enforced policies and economic development for the whole country, although the gap between the rich and the poor became bigger. I am not trying to say that strong government is always a good answer/solution for the economy but we can learn from China to improve our economies.
Toggle Commented Dec 5, 2013 on China and Africa (Econ 280) at Jolly Green General
From the first sentence of the executive summary, we can immediately sense the urgency that the author is trying to convey. If we do not take actions to reduce greenhouse gas emissions, then more than 4 C degrees can go up. Although the 4 degrees increase might not look serious, we know that this can affect various regions, sea level, and eventually human beings. No one is immune to the impacts of climate change. However, the distribution of these impacts will be disproportional against the poor regions. This is what the paper is approaching. Due to the fact that they are poor, they lack the resources and conditions that help them to protect themselves from being challenged by the negative impacts of climate changes. It will be also hard for them to adjust and adapt to the changes whereas the rich people tend to adapt to the new changes quickly with their resources. Also, another impact of the climate changes on the poor people is that these changes can slow down the economic growth in the poor countries. As they face their lack of resources and poor conditions, as they tend to work closer with the environment, they can be hurt by these changes, which eventually slow down the growth. I hope that the countries that signed up for Kyoto Protocol actually follow what they promised and hopefully figure out the ways to work with the poor countries.
As we discussed in the class on Tuesday and others mentioned above, this micro-finance article talks about alleviating poverty by providing access to credit, insurance, and savings to the poor. However, as the paper points out, this point of view might be too optimistic and it may not actually alleviate poverty in reality. The paper provides evidence by using the randomized studies. The randomized experiments allow a certain amount of reliability and show the treatment effects. As Esther showed us in the video on Tuesday, randomized experiments involve experiment and control groups with and without treatment respectively. As Esther argued, randomized controlled trials allowed us to distinguish the drugs or the treatments that work and the ones that do not work. We can also apply this method to the social policies about which ones work and which ones don’t. When we think about which policies to implement, we must think about the psychological effects and predict how people will behave.
Toggle Commented Oct 25, 2013 on Microfinance (econ 280) at Jolly Green General
In this paper, Esther Duflo examines both sides of the bidirectional relationship between economic development and women’s empowerment. The first argument is that gender equality will improve when poverty rate declines. However, others believe that gender equality is necessary to achieve economic growth. As “Jspencer” points out, we are facing the classic “which came first: the chicken or the egg?” dilemma. This leads to the question of what would be the most productive and the fastest way to improve both the economy and the status of women. The issue is should the government enact policies for economic development or policies that empower women and their rights? Just like other classmates have said, I agree with Duflo’s argument that economic development alone cannot resolve the gender inequality issue. To take it one step further, I think policies aimed at empowering women are necessary and can also improve the economy. As Daniel pointed out, single mothers are a large proportion of the poor. I totally agree with Daniel’s idea that if there is a policy for them, there will be multiple benefits. It will allow women to have more income, which will also reduce poverty. Also, it will reduce gender inequality.
Dani Rodrik notes that while per-capita income for the world on average, life expectancy, infant mortality, and literacy percentages has increased, there are certain countries that have pretty much stopped growth from the 1980’s. It is perplexing that while some countries such as China, Malaysia and South Korea have developed quickly and ended the century with high productivity levels, others, such as Latin America and Africa, have not been as successful. This leads the author to the question of “What do we learn about growth strategies from this rich and diverse experience?” In this question, Rodrik emphasizes on developing a broad understanding of the contours of successful strategies aimed at achieving economic convergence. I agree with Colleen that this paper by Rodrik explores how to spur entrepreneurship activities with investment incentives. The example of South Korea reminds me of the lecture on Tuesday. Professor Casey mentioned that one of the reasons that South Korea was able to grow quickly in a short amount of time (GDP per capita was about 70 dollars in 1960s whereas it is over 30,000 dollars now) was that the government implemented the policy that asked people to save (or the incentives for investment) by looking closer. This was done successfully due to the understanding of the details and local knowledge. This leads to his argument that the real lesson is to take economics more seriously for growth strategies.
Toggle Commented Sep 26, 2013 on Growth Strategies - Econ 280 at Jolly Green General
Just like many others have commented, one way I saw in this paper by Krugman was that the models discussed do not actually fit complexities of the real world, due to the fact that many of the key assumptions do not accurately reflect reality. This reminds me of our lecture on Tuesday about Lewis-two-sector and the Big Push by Rosenstein Rodan (Big Push is the example of high development theory that Krugman provides). As Professor Casey pointed out, these theories are meant to be used as tools to guide the policy makers and show possible implications of applying these theories. They are not meant to be used directly to real world situations since they depend on many assumptions to make the complexities of real world economics simple. This reason leads to Krugman’s argument of invalidity of high development theory. The problem with this theory is that it depends on the assumption economics of scale which nobody knows how to put into formal models, the problem of dealing with market structure. However, as Daniel points out, I think it might be difficult for theories in general to reflect the complexities of real world economics (and the development issues that Krugman raises). Most theories are shown as simplifications of reality and should be used as tools that guide people; they are not deliberately built to mislead people. Unless economists learn how to incorporate every single factor of reality into models, it is impossible for theories to represent reality accurately.
As many of our classmates mentioned above, this paper examines the choices that the extremely poor make and observes the economic lives of the extremely poor. The first question that immediately came into my mind was how do we define the “extremely poor (EP)” people of the world. As the authors mention, “the EP people are currently living on no more than $1 per day per person, measured at the 1985 PPP exchange rate.” However, I am not sure if this is the correct or the best way to define it. Professor Stiglitz once argued in “GDP Fetishism,” (http://www.project-syndicate.org/commentary/gdp-fetishism) that GDP is not an accurate measurement of economic growth and that it is hard to put all the factors of the growth into one single number, GDP. As Professor Stiglitz stated, it might not be accurate to define the EP as the people who live under $1 per day. It is possible that there are people who might live on more than a dollar but still the circumstances and economic status might be the same as EP. This is just my thought of the definition. It is also interesting to see the data that shows how EP people spend their income. I first thought that they would spend money on food most of the time, but (although they do spend a great portion of their income on food) it is surprising to see that they also spend money on festivals, forms of entertainments such as movies, and radio or television. They do not spend that much money on these activities, but it is still interesting that they have money for entertainment activities.
Toggle Commented Sep 12, 2013 on Economic Lives of the Poor at Jolly Green General
It is true that deep below the ocean surface is a place where humans have rarely ventured. However, it is also true what Professor O’Dor said, “The disturbing truth is that humans are having unrecognized impacts on every part of the ocean, and there is much we have not seen that will disappear before we ever get a chance.” This lack of awareness of this issue makes the situation even worse. To be honest, all kinds of climate changes, over fishing, acid rain, etc., are caused by humans, but we are not really trying to improve our ecosystem. As the article suggests, bottom-trawling is the worst over fishing method. It basically catches most of the fish from the sea, including over one million sea turtles. I am not saying fishing is bad. What I am saying here is that we should not fish for more than what we need. If it’s possible, we should just fish enough so that we can eat enough, without damaging the fish population. Also, lack of public awareness of these issues is a big problem. People have to know and understand the situations because all these negative impacts will come back and hurt us.
I am really glad to hear that the company is planning to build another 500-megawatt plant in California. If this kind of big company starts to build solar energy plants then it is pretty obvious that other companies will follow the same path. Although, as the article suggests, there are a lot of obstacles, such as high costs and regulations, this plan will ultimately reap more benefits than costs. I think it is a good idea that they decided to build the plant in California where by 2030, it will require that they deliver 1/3 of their power from renewable sources to the state. It is beneficial to both of the company and the state. In addition to its profits, if the state government relieves its strict regulations for the companies to build solar plants and the company supplies electricity, they can save the cost and help each other. I hope to see more businesses and governments working together.
The trade-off between economic growth and clean energy has always been a problem. I am glad to hear that it is possible for New York, which is the third largest populous state, to cover all of its energy by 2030 by renewable resources. Although in the beginning, it may seem extremely costly, we have to think about the future value. As we briefly talked about, it is the debate between whether getting the benefits right now with no cost is beneficial or bearing costs first for the future benefits is more beneficial. However, as the research shows, 78% of energy will be covered by solar and wind, and it’s long-term benefits and new jobs will outweigh the costs and the sacrifices made by the conversion. New York will begin soon. However, we should not just stop here. Other states have to join too, which will eventually lead to a global conversion.
It is hard to believe that a twenty year period has changed the environmental politics dramatically from geographic lines to the partisan lines. However, we must understand that the politicians are completely divided into two separate parties and seem to be unable to agree with each other. It is also interesting to see the fact that in 1991, 89% of Republicans supported the Clean Air Act Amendments whereas only about 4% of Republicans support American Clean Energy and Security Act of 2009. Most of them are just unaware or choose not to be aware of the threat posed by climate change. The current policy for climate change is not going to be the most cost-effective policy for reducing greenhouse has emission for the economy as the article suggests. Although the end of the article gives us some good news, politicians should gather up together and start thinking seriously about what kind of policies they have to come up with the rules that can benefit both of the economy and our climate.
Toggle Commented Mar 14, 2013 on Another Political Football at Jolly Green General
As the article suggests, it shows the transition from using coal to using natural gas and renewable energy. This also means that they will invest more on solar and wind power systems. This is the most interesting part of the article to me. United States declined to join Kyoto Protocol due to economic reasons and was reluctant to take any actions to save the environment. However, just like China decided to put tax on carbon emission, United States is also learning that the problem is getting worse and that they have to do something about it. It is also impressive that there are companies that spend their own money to build emission control and reduce the level of emission. I hope this is a beginning of new era. This transition might be costly in the beginning but once we have the solar and wind power generations ready, it will be cheaper and better for the environment.
Does anyone remember 2008 Beijing Olympics? It was one of the biggest events that China had ever hosted. Because it was an extravagant event, China spent a lot of money. However, unlike other countries that previously hosted the Olympics whose main focus was either fighting against terrorism or building infrastructure, China’s main concern was air pollution. They tried everything, like not driving on certain days, to make sure that at least the air quality during the Olympics would improve. This example really portrays the air pollution problem with China. It has reached a level where one-third of the urban population breathes the contaminated air and, as a result, lung cancer is the number one cause of death in China. According to EIA, the coal consumption in China alone has reached the consumption level equal to that of the rest of the world (about 47% of the world’s coal consumption). This statistic is the reason why air pollution level is “beyond index”. Fortunately, it seems China is aware of the situation now. As Professor Casey said in class, China now requires tax on carbon emission. In this way, they can possibly reduce air pollution and improve air quality. However, the problem is that it will take a long time.
Toggle Commented Mar 4, 2013 on Off The Charts at Jolly Green General
Bush administration's leadership vacuums restriction on the emission of greenhouse gas, which led to these ten states (initially nine states), joining together to create the Regional Greenhouse Gas Initiative (RGGI). s the report suggests, throughout this program, the states were able to reduce the carbon emission, to put about 1 billion dollars back into the pockets of consumers, and to create 16,000 job. It also created revenue for these states. As the article questions, if there is any doubt against this program, then they should consider decline in power-sector emissions with steady economic growth caused by the program. During this economic recession, this success should be learned by other states. They should also start enacting these programs in order to grow back the economy
Toggle Commented Feb 11, 2013 on Hurray for Market Forces!!!! at Jolly Green General
I really like the way this article begins: “Dealing with global warming will be expensive.” This addresses the trade-off that we have to make; either we pay right now to save the future or we don’t do anything to keep the cost low to have a worse future. Whatever we decide to do, it will change the outcome. However, as this article suggests, we are facing an even larger problem. What we are experiencing is due to 0.8 degrees centigrade, but the experts argue that it can be 4, 5, or even more degrees in the future. However, the fact that the budget is shrinking to its smallest share of the economy shows that the government does not really take this problem seriously. Also, the fact that United States’ tax on energy amount is $6.30 per ton, which is one of the lowest among the 34 nations of the Organization for Economic Cooperation and Development countries, shows the lack of concern we have for this huge dilemma. Although there are some states that do ask for more tax, it is still low. The best answer to solve this problem and to have a better future is to raise the tax on energy. The fact that US is one of the nations that has the lowest amount of tax on energy per ton surprised me. Increase in tax will affect the economy, but the trade-off has to be made.
President Obama did a great job talking about climate change and energy in his second inaugural address. As we learned in class, increase in price of an object means that the item is scarce. For the past few years, as we know, the price of gasoline has risen tremendously, which, one can argue, is a sign that we have to find another source of energy soon. Some might argue that the increase in price is due to OPEC and its oil policies, but, regardless, we need to find another source of energy to keep the cost low. Because of this reason, it is extremely important that President Obama talked about it in his speech. The planet has been warming up over the past 100 years, and global warming has become a serious problem for the whole world. Some argue hurricane Sandy, which devastated a portion of Northeastern US, was heavily influenced by global warming and climate change. These climate changes can affect our lives heavily just like hurricane Sandy. However, according to the PollingReport.com database, not everyone is concerned about this problem. Although 57% thinks US government should do something about global warming, not everyone actually cares about the problem. We wait until the problem actually begins to have an effect in our lives to start addressing it; however, at that point, it might already be too late. We need to begin working against this issue now, in order to overcome it.
When I read about Pigouvian taxes in the book and learned about it in class, I thought they did produce deadweight losses. However, this article and what the professor taught us in class (the lecture about this article) cleared up this misunderstanding. Although both Pigouvian taxes and fiscal taxes are taxes, Professor Zetland clearly separates them by arguing that Pigouvian taxes do not produce deadweight losses whereas fiscal taxes do. The difference is that fiscal taxes are designed to generate revenue while Pigouvian taxes are designed to reduce behaviors. It is extremely important to notice this dissimilarity.
Toggle Commented Jan 28, 2013 on My Bad..... at Jolly Green General
Although there has been numerous attempts to find a solution to reduce pollution through arguments and conflicts, the problem has yet to be resolved. A huge factor in this struggle is that not all countries are the same; in other words, every country has different issues that need to be focused on, when considering pollution. Underdeveloped countries have different priorities than developed countries. Charging all of the countries the same amount of money for polluting the environment is unfair and simply not possible because the more developed countries have already used up a lot of their natural resources and caused pollution. These are the countries that should have to pay more money. The nations that are currently polluting hold more responsibility in this problem than others. Because of their irresponsible actions, other people and governments have had to pay.
Gyung Jeong is now following Caseyj
Jan 13, 2013
It is extremely important to note the slowly increasing temperature changes and more frequent natural disasters, such as Hurricane Sandy, due to global warming. That is why we, as people affected by these changes, need to be aware of the situation and be more proactive. Although it is true that we are taking steps forward to reduce the amount of greenhouse has emission, it is still not enough to make a huge difference. That is why we need to consider taking more actions to prevent the higher levels of greenhouse gas emissions. The legislation to impose fees on greenhouse gas emitters is most likely not going to pass, due to the lack of concern and apathy of the people. It will be extremely hard to pass this bill due to several reasons, such as the fact that most people in Senate have a business mindset and another fee for businesses will definitely not be popular. As Doug commented, economy can be another reason. During this kind of recession, as we are trying to recover from it, it is really hard for firms and companies to accept higher taxes. As we talked about in chapter 1 of our textbook, trade-offs between economic activities/gains and the preservation of environment are difficult. The opportunity cost of preserving the environment might be even higher. However, it is a step forward in becoming more proactive; it is also for the better future.
Toggle Commented Jan 13, 2013 on Rumor has it..... at Jolly Green General
Gyung Jeong is now following The Typepad Team
Jan 13, 2013