This paper examined the link between interest rates in advanced industrial countries and the determinant of capital flows to emerging markets. Although I found this paper extremely dense, the authors did a very good job explaining the common misconception regarding foreign investment. Most people believe that falling interest rates should encourage investors to search for yield in emerging markets. Despite this making theoretical sense, much of the literature lacks support of that argument. In response to the lack of support, these authors tried to take a slightly different approach and, contrary to other recent studies, the authors found more evidence of an effect of US interest rates on emerging-market spreads. Like several other people have alluded to in their blog post, this article reminded me of the article we read on FDI. There is no "one size fits all" solution. Thus, each developing country may require a specific policy relative to that country's conditions. I am also curious what the most recent literature has to say about this topic since the article was written back in 1998.

After reading this article by the World Bank, it just blows my mind how so many people still don't believe that global climate change is a real phenomenon. The statistics in this article were absolutely frightening. This is the type of article that nearly every person on this planet should be reading. The part that I found the most fascinating, yet saddest, was the fact that changes double in magnitude going from a 2-degree warmer world to a 4-degree warmer world! Prior to reading this article, I would not have thought that just a 2-degree increase could have that significant of an effect. The other part that had the greatest impact on me is how the global climate changes will have an even greater effect on the developing countries. As we have already discussed in class, poor countries already have no other choice than to adapt to environmental changes. This will simply magnify to great extents if the government, private sector, and individuals cannot cooperate and work together to solve this issue. Fortunately, as the authors point out, there is evidence that a 4-degree warmer world can be avoided. It is just time for government, private sector, and civil society to finally take action.

Like Austin pointed out, I found the paper very interesting but also very intuitive. It makes sense to me how and why anti-tobacco pictorial warnings would decrease the odds of buying tobacco products. However, what stood out to me most while reading this article was the actual results that came from the authors' experiment. Increased distress reduces the odds of buying by 79%, increased shame reduces the odds of buying by 84%, increased anger reduces the odds of buying by 84%, increased anxiety reduces the odds of buying by 83%, increased fear reduces the odds of buying by 71%, and increased disgust reduces the odds of buying by 60%. Each of the results are huge percentages! I am slightly surprised that disgust had the lowest effect of each of the emotions mentioned above. I think of disgust as a very extreme emotion, so I am surprised it didn't have a greater effect on people.

I found Sach's and Malaney's article on the burden of malaria very fascinating. As other students have alluded to, the numbers in the article just absolutely astounded me. The fact that there are "300 to 500 million clinical cases every year, and between one and three million deaths, mostly of children" attributed to malaria is extremely devastating. Another statistic that stood out to me was the fact that "every 40 seconds a child dies of malaria, resulting in a daily loss of more than 2,000 young lives worldwide." These two statistics emphasize just how devastating a disease malaria truly is. I also found the section on the relationship between poverty and malaria very interesting. Obviously, there is an issue of endogeneity between the two variables. Does malaria lead to poverty or does poverty lead to malaria? As the article suggests, perhaps both cases are have some truth. However, to me, the theory that poverty leads to more malaria makes the most sense. In poor countries, people are unable to pay for the necessary prevention methods thus increasing the chance of malaria transmission. Despite this sound theory, evidence suggests that economic development is not enough. I found it interesting and somewhat confusing that even wealthy countries (such as Oman and the UAE) have been unable to eliminate malaria.

I found the section on when people experience mixed emotions very interesting. It is very rare that humans are only experiencing one emotion at a given time. That being said, which of the emotions will effect behavior the most? As the authors suggest, perhaps the strongest emotion cancels out the action tendencies and motivations of any other emotion. Another possibility is that the strongest emotion simply gets action priority in the given situation. If this second possibility is true, then the inferior emotion could effect behavior after the stronger emotion has already been reacted upon. I also found the section on social value orientation interesting. Social value orientation describes some people as pro-socials and others as pro-selfs. In one study on the prisoners-dilemma, researchers found that fear decreased cooperation for pro-socials, whereas guilt increased cooperation for pro-selfs.

I found the section on empathy very fascinating. In particular, I found the studies that show that people use their own emotions to understand how it feels for others to be in a similar state to be very interesting. For example, in Singer and colleagues study, they recruited couples and measured empathy by assessing brain activity in the female partner while painful stimulation was applied either to her own or to her partner's hand. The results showed that the "pain matrix" was activated both when the subjects themselves experienced pain and when they saw a signal that their partners had experienced pain. The results of the study previously discussed demonstrate the significance of understanding one's owns feelings. As discussed in the textbook, training the capacity to understand our own feelings would go hand in hand with increasing the capacity for empathy. On the flip side, deficits in understanding our own emotions would be associated with empathy deficits. I find it interesting that just simply becoming more self aware could help people become more empathetic towards others.

I also found the section on mood and affective priming very interesting. I think it makes perfect sense and why mood induction would shift a person's mood. We have all experienced watching a sad movie and how it changes your mood even after the movie is over. However, I find it extremely fascinating how people's moods can be altered subliminally through affective priming. In one experiment, the groups of participants were subliminally presented with angry, happy, and neutral faces. Afterwards, the participants poured, consumed, rated, and indicated their willingness to pay for a non-alcoholic drink. Interestingly, those exposed to happy faces poured and consumed more of the beverage and also increased their willingness to pay for it. On the other hand, those exposed to angry faces showed the opposite effect. I found this experiment particularly interesting. Whether it is ethical or not, subliminal marketing could be extremely effective...

I thought Rodrik's paper went along really well with the discussion our class had had on Tuesday. As discussed in class, an economic theory can be applied, but in order to see an effect, one must make the assumptions in the model true. Similarly, Rodrik explains very clearly that economic "principles do not translate directly into specific policy recommendations." The translation from economic theories to policy recommendations requires additional factors that are contingent on economic and political context. There is certainly no "one size fits all" for economic growth strategies. Like Riley, I also found Rodrik's quote from Feynman very insightful. I had never thought about the fact that people talk about subjects that we know nothing about. Although I do not think this is always the case, I certainly understand his point and can think of many instances where this is true.

I found the "Applications" section in Chapter 3 very interesting. Diffusion models can be applied to answer questions about the effects of differences in groups of subjects such as aging. Researchers found that "age does not affect drift rates but does result in a larger non-decision time and wider boundary settings." Contrary to my intuitive prediction, many diffusion models have uncovered stable individual differences across very different tasks. The results about age, which are large, can be applied in many testing domains. Age was the only topic discussed in this section, but I am very curious about what other researchers have discovered and how their results can be applied.

As both Daniel and Sarah mentioned, the part that surprised me the most in this article was the fact that the extremely poor "do not seem to put every available penny into buying more calories." I had always naively assumed that the poor spent whatever money that possessed on food and nutrition. I also found it extremely interesting how the poor spent most of their remaining money on festivals. These two findings demonstrate just how many choices the poor do indeed make each and every day and that they often "choose not to exercise it in the direction of spending on food..." Lastly, I found the section on self-reported happiness very fascinating. Although the poor "feel poor," their levels of self-reported happiness or self-reported health levels are not particularly low. Despite this finding, the poor do report that they are under a great deal of stress. I found these two findings to be somewhat contradicting.

I completely agree with Austin's comment. It is absolutely fascinating how technology has changed so many different aspects of life. It makes perfect sense why two subjects, neuroscience and economics, would pair so well together. I am very excited to see how this new field of study will change the field of economics in general over the next few years. The section in Chapter 1 about the dopaminergic reward prediction error (DRPE) hypothesis reminded me of a reading for Econ 280 called "The Rise and Fall of Development Economics." In this paper, the authors talked about how economists in the 1950's had a difficult time expressing their ideas on high development theory in tightly, specified models simply because they did not know how to. Similar to the problems the economists in the 1950's faced, neuroeconomics is a very new, unexplored field of study and may require some setbacks or complications before it can be put into standard economic models. However, in the end, I believe that neuroeconomics will give incredible insight into people's decision-making and social behaviors.

"Model-building, especially in its early stages, involves the evolution of ignorance as well as knowledge." When reading this sentence, it reminded me of several economics courses I have taken here at W&L. On several occasions, professors have started off a class by saying, "So you know that assumption that you made in your previous class, well that is completely wrong and we will be making a new assumption in this class." This paper also made me wonder if there are any other alternatives to the simple modeling in economics, but as the author points out, "the problem is that there is no alternative to models." As demonstrated in the history of development economics, creating controlled, "silly" models is a very easy way for people to grasp the complexity of the real world. That being said, I agree with Austin's point about remaining open minded and supporting Hirschman's verbal style of presentation.

"Model-building, especially in its early stages, involves the evolution of ignorance as well as knowledge." When reading this sentence, it reminded me of several economics courses I have taken here at W&L. On several occasions, professors have started off a class by saying, "So you know that assumption that you made in your previous class, well that is completely wrong and we will be making a new assumption in this class." This paper also made me wonder if there are any other alternatives to the simple modeling in economics, but as the author points out, "the problem is that there is no alternative to models." As demonstrated in the history of development economics, creating controlled, "silly" models is a very easy way for people to grasp the complexity of the real world.

The very last line of the article stood out most to me: "Adam Smith's world is not inhabited by dispassionate rational purely self interested agents, but rather by multidimensional and realistic human beings." When people think of Adam Smith, invisible hand most likely comes to mind. However, as this article discusses, people are not rational and are driven by an internal struggle between their "passions" and their "impartial spectator." Due to these observations, I question our economic models and the laws and policies that derive from them. Rather than assuming that people are rational and self-interested as we do in the standard economic models, wouldn't it make more sense to apply models in which individuals are irrational and behave the way in which Smith describes?