This is Ferrell Carter's Typepad Profile.
Join Typepad and start following Ferrell Carter's activity
Join Now!
Already a member? Sign In
Ferrell Carter
Recent Activity
The World Bank did an excellent job of providing an extensive report on environmental hazards in certain areas of the world. What stood out the most to me was how they were able to link almost every environmental problem with a specific issue in development, such as labor or health. We have learned in class that environmental and development factors are intertwined in nature. In order to sustain development, we must innovate ways to live off the resources we have without hurting the future generations. The World Bank provided thorough evidence of CO2 emissions being one of the major concerns for environmentalists. The paper mentioned how environmental damage could interrupt migration patterns as certain climate changes could create uninhabitable land. This reminded me of what we discussed in class a few weeks ago about population patterns and the demographic transition. Interrupting migration not only would affect families’ security and thus make them more vulnerable to poverty, but it could also lead to detrimental population effects such as the Malthusian population trap. The effects of climate change go far beyond just immediate effects on the individuals the affected areas.
Eichengreen and Mody make a point to acknowledge both the supply and demand side of international finance, and how interest rates in developed countries affect investment in developing nations. I think it’s worthy to note that contrary to existing literature on the subject, higher interest rates in the US are not necessarily positively correlated with market spreads. In other words, just because the opportunity cost of borrowing increases in the US it doesn’t necessarily result in a difference between the offering price and the amount invested. Eichengreen and Mody are careful to recognize that the demand side of international finance and trading also plays an important role in regulating interest rates. While some high risk agents may opt out as interest rates rise, this will only decrease the spread among the nations willing to borrow from the US. Like other things we’ve discussed in class, this paper recognizes the importance of looking at a situation holistically rather than from just one perspective. While models do tell the story simpler, it is crucial to look at issues from multiple sides- in this case, demand and supply- in order to see what really are the driving forces in international capital flows.
Professor Casey’s paper illustrates a somewhat unconventional approach to incentivizing farmers in the agricultural sector. Typically, we would expect new technologies or other monetary incentives to persuade farmers to adopting new strategies. However, using the Keyne’s model of investment determination, Professor Casey concludes that an increase in human capital would ultimately lead to more informed decision making, and thus more investment in agroforestry Mexico. I agree with Madison that this model can be applied to several different economic dilemmas. We have focused a lot of class time on the importance of human capital and how improving the capabilities of an individual has large returns to investment. I think that it’s interesting to see this strategy applied to a situation that combines a social issue (environmental sustainability) with profit maximizing goals of farmers. Lots of people have made comments on the important of sustainability in agricultural practices, and Jean made the point that Latin American countries have faced the consequences of not adopting more environmentally friendly agricultural techniques in the past. Investing in human capital seems to be the most sustainable form of investment in any scenario, as it is reinforcing from one generation to the next.
Toggle Commented Nov 5, 2014 on Econ 280 for Thursday at Jolly Green General
One of the main things that stood out to me in these papers is how both of them focused on the importance of human capital. In the paper by Sachs and Malaney, they stress that the effects of malaria greatly reduce the human capital in countries that have higher instances of the disease. This reduction in human capital undermines efforts for economic growth for a multitude of reasons, as those infected with malaria experience high costs associated with forgoing labor or even dying from the disease. I was startled by the numbers presented in the paper, like many of my classmates. Since malaria has been a persistent problem worldwide for so long, I can see where funding efforts have been abandoned, especially in tropic and sub-tropic regions were anti-malaria efforts rarely show success. Perhaps if developed countries understood the importance of malaria prevention as a means of sustaining economic growth for these countries, they would have more incentive to contribute. Scultz and Lewis frame their entire paper around the importance of human capital. They argue that economists have misunderstood the fundamental problems in agricultural communities this whole time and that more incentives must be provided for farmers in low income countries to improve their quality. I thought it was interesting how they framed quality as a demanded good, and increasing the demand for quality will in turn lower the supply of children being born, decreasing fertility rates, which we have seen is positively associated with poverty reduction. This issue of higher fertility rates is also present in the Sachs and Malaney piece, as families bear more children when they expect the death rates to be higher. Just as we discussed in class yesterday, the push for quality over quantity will have positive effects on human capital, and thus economic growth. I also thought it was interesting how Schultz and Lewis claimed that economists are taking the wrong approach to understanding the world’s poor. Duflo had a similar point in “The Economic Lives of the Poor.” I think it is important to understand that the poor make decisions just as any other rational agent would. Schultz and Lewis say that traditional economic models apply just as well to the poor- the fact that people respond to incentives and in order to improve quality in the agricultural sector, governments must get out of the way to provide the economic incentives to do so.
Toggle Commented Oct 29, 2014 on Econ 280 for Thursday at Jolly Green General
While child labor is a sensitive topic, I too was intrigued by Udry’s rational approach to the issue. Going back to previous discussions we’ve had about the usefulness of economic models, Udry is able to take such a complex and ethical issue and boil it down to a pretty simple cost benefit analysis. No, it doesn’t go into the “growth diagnostics” approach as presented by Rodik, but it does create a good base foundation for analyzing child labor from an economic perspective and seeing why families make such difficult decisions. Like Udry and other classmates, I would be in favor of subsidy programs such as Opportunidades and RPS to have more presence on the global stage in order to reduce child labor. However, like Daphine and Kate pointed out, it comes down to the issue of funding. Just as families don’t consider the future value of education to outweigh the current costs of forgoing labor, developing countries without access to strong credit markets may not see the benefit of implementing poverty alleviation policies such as these in order to break out of the poverty cycle. I also appreciated Udry’s point to distinguish between individual wills and the will of the household in his section on agency. This is something we have touched on in class with the discussion of women in poverty and how altruistic actions towards children tend to stem from the matrons of the household. A thought that crossed my mind in this reading was what would happen if you gave agency to the children? Without educational opportunities that explained the future value of education, many might choose to stay unemployed. While children hardly ever make decisions for themselves, much less the financial status of the household, it would be interested to see if policies directed at children would have an affect on the willingness of children to work. Perhaps broader educational programs that explained these costs and benefits in addition to subsidies would mitigate some of the problems faced with controlling for cultural norms and other extraneous factors that exist among countries.
Toggle Commented Oct 23, 2014 on 280 Paper for Thursday at Jolly Green General
I agree with Wilson’s point that the very basis of economics is realizing the shortcomings of simplified models in order to understand their usefulness. While Hirschman and other high development economists of the time seemed to “fail” at relating these simple models to their more robust theories, such as economies of scale, Krugman explains that this made their ideas “unteachable.” I would disagree and say that complex economic theories are the reason for teaching economics. Though they may not come out perfect on paper, the simple models alone provide only a broad and unrealistic picture of the world. If by “unteachable” he means “imperfect,” then I suppose he is right. Reading through some of the previous posts, it seems that a lot of the other bloggers agree that there are almost two sides: Krugman and the pro-modelers and Rodik and the case-by-case analyzers. I am under the impression that the two can go together quite nicely. For any science, as Krugman pointed out, there are models. Though some may be hesitant to embrace such rigid structures in a field such as social science, the subject is a science and thus requires some kind of scientific approach to looking at things. Each model is potentially a blank slate. It can tell the basic stories, but it cannot account for specific characteristics of countries and their politics or economies. For this reason, a case-by-case analysis is necessary for each and every development study that uses a basic economic model. As Krugman says, “[modeling] involves the evolution of ignorance as well as knowledge.” In other words, you have to give up specificity and detail to produce an economic model that tells a story. You have to start with something, an empty drawing of Africa, to get somewhere. In order to make up for this loss, Rodik’s point of taking everything case-by-case could fill in the gaps.
I, along with what seems like most other students, appreciate Rodik’s broad approach to development economics and what strategies work for different countries. Though he didn’t flesh out the ideas of the social sphere as a key proponent to economic development, Rodik did mention that market successes must be linked to social protection, social insurance, and democracy. The ideas of social protection and democratic ideals get back Duflo’s point that social (namely gender) equality and growth have this symbiotic relationship. Though Rodik did not directly address social reforms as policy suggestions, he hints that such policies and institutions would facilitate economic growth. Along these same lines is Rodik’s consideration of local conditions when applying development strategies. He says that since such conditions come “institution-free,” economists must have an understanding of the conditions of a country in order to enact effective policies, since development works on such a case-by-case system. I agree with what Jean wrote about this idea being similar to the idea of “clinical economics” that we discussed in class. In order to prescribe development strategies, economists must first understand the background and conditions of a country of interest. I can compare this to my experiences in the Dominican Republic. For three years in high school, I went for a week at a time to rural villages outside of Puerta Plata with a missionary that my dad had become friends with. We usually visited 5-6 villages per trip and they were so vastly different. Even at this micro-scale, there would be no way that one development strategy would work for each one. In village one, they needed clean water since the river was so badly polluted, while in village two they had found clean water and now needed medication to treat worms that they had contracted from previously polluted water. Bringing “aid” to any of the villages would be almost useless without first spending time there and understanding what they needed the most to sustain themselves. I think this relates well to what Rodik discusses in his essay and how each development story will ultimately be different from the last.
Toggle Commented Oct 1, 2014 on ECON 280 Paper at Jolly Green General
In response to Jean’s comment about maternal instinct, I can’t help but ask if the idea itself is a sort of self-fulfilling prophecy for women. Not to discredit the notion itself; I think that maternal instinct is very much a real thing and that both mothers and fathers bring unique values to raising children. However, the idea that women are supposed to spend more time and energy on raising children as a result of said “instinct” only perpetuates the rate at which we see women staying at home, not contributing to the workplace, and therefore not gaining equal participation in society. This seems pessimistic, but it reminded me of the section in Duflo’s essay in which girls and boys took the same math test, and only after the girls were told that there should be no differences in grades between the boys and the girls did the girls achieve comparable scores to the boys. Perhaps putting less emphasis on the role of maternal instinct and more emphasis on the role of women as powerful conduits to development, less gender inequality would persist. We can see women taking an active role in development through the RPS experiment presented by Gitter and Barham. Since women with more power (education relative to males) tend to invest more in the education of their children, this results in the increase of human capital in their children. While the findings on food expenditures weren’t as directly correlated, this evidence still speaks to the fact that women can and do act as important factors to development, just as Duflo writes of in her essay.
Toggle Commented Sep 24, 2014 on ECON 280 paper #2 at Jolly Green General
What stood out to me in this piece by Banerjee and Duflo was the question they asked on page eight: “Should we worry about the fact that the poor are buying less food than they could?” Like a lot of my classmates, I was struck by the fact that food seems to be the first thing to go when a budget decreases. Like Jean mentioned, it seems “irrational” to start cutting calories before cutting out other consumer goods. However, by asking this question, Banerjee and Duflo imply that there are broader consequences associated with this kind of decision-making. Is this to suggest policies that require certain proportions of income spent on food? Or are they simply alluding to the fact that we as people have an ethical obligation to care for the wellbeing of others? This question really stood out to me in the reading because it addresses the reader and takes this case study beyond the scope of the poor village. Also, I was surprised to learn that private education and health systems tended to provide lower quality care than their publicly funded counterparts. In the US, at least in education, you tend to see the opposite. I think they made a good point to point out that households may not even be sure that private education and healthcare is truly better in these poor areas. As for private healthcare, it seems to have more success in terms of people using it. But it is truly alarming to think that in some of the poorer neighborhoods, healthcare providers could actually cause more harm than good as Banerjee and Duflo wrote of India on page 18. It begs the question of whether or not private healthcare and education are actually worth the investment.
Toggle Commented Sep 17, 2014 on 280 reading for Thursday at Jolly Green General
Ferrell Carter is now following The Typepad Team
Sep 17, 2014