This paper seeks to discover a causal relationship between interest rate changes and the state of global financial markets, using interest rates and capital flows to emerging markets as proxy variables. The results follow an intuitive path, but curiously enough, the authors also decide to control for things such as poor credit risks dropping out of the market. This is a very important distinction to make, and is likely the problem with many of the previous studies that found results contradictory or at the very least different from what was expected. Another interesting point the authors emphasize is the distinction between a supply push and a demand pull. I had not considered thinking of capital flows in that way. As a direct result of htis, we need to use a different econometric technique, or at the very least consider this fact, to properly evaluate data. (The authors mention the flaws in OLS regressions due to this.)This added element forces us as economists to consider many different things when considering policy implications. For example, should we be considering raising interest rates (as will likely happen in the coming months in the US), we must consider whether emerging markets are trying to borrow more money and capital or not. If they are not, then raising rates would be pointless, as it would further reduce the quantity of emerging market bonds being put out, and kill spreads. If the opposite were true, then this added demand would be met by increased quantity of bonds from a developed market, and the market would shift towards an equilibrium that will likely increase global utility.

Building on my previous comment, this article reminded me of an article that we read previously in class that detailed the problems with models. Those are all very evident to me here, as the assumptions used to create this model are very complex. There is very likely omitted variables (natural climate change, cooling of ocean temperatures, etc.). Therefore, the accuracy of the conclusions drawn is most likely not statistically probable. For example, NASA found that the melting of the ice from the Arctic area will cool, or possibly slow or stop, ocean currents, causing "Europe's average temperature would likely drop 5 to 10°C (9 to 18°F), and parts of eastern North America would be chilled somewhat less. Such a dip in temperature would be similar to global average temperatures toward the end of the last ice age roughly 20,000 years ago." Therefore, due to the complexity of the real world, and the lack of measurable statistics throughout history, most of the assumptions made by the models used in this paper are guesswork. My previous comment assumed the accuracy of the science and assumptions behind the model. That being said, if it is true, it is certainly frightening, and as humans we should explore potential changes that can be made to prevent global climate change. For example, the anecdote about Russia losing $25 billion in agriculture due to a heat wave. This cannot happen to a developing economy. Developing economies rely on agriculture and mineral extraction to boost their economy, and global climate change will clearly damage these countries more than others. Therefore, preventing humans from causing climate change is a problem that must be solved now, before conditions change for the worst.

One problem with pollution is that it is a negative externality. However, it is not just a statewide or national externality. It is a global problem, and therefore must be dealt with globally. If some countries make a change, it may help, although it may be negligible, depending on how the other countries react. For example, if the production of high emission cars is banned in the US, but owning and operating a high emission vehicle is not, then another country could produce this vehicle and sell it to the US. In this scenario, the impact would be minimal. Therefore, the whole population must come up with some method of minimizing the effect that humans are having on the environment. This change must be global, and must be enforced globally.

The article written by Sachs and Malaney brought some very interesting facts to light. For example, the fact that a child dies every 40 seconds from malaria is astounding to me. This article also does an excellent job at predicting the social and private costs of malaria, and by extension, other deadly diseases. For example, students miss an average of 11% of school days a year in Kenya due to the disease. Additionally, malaria contributes to mental health problems in a country as well. The paper summarizes numerous other examples of malaria harming humans and human output, and it is truly awful to think of the damages this rampaging disease causes. The Nobel lecture is very interesting, especially in juxtaposition with the Sachs and Malaney paper. Malaria is most prevalent in countries with lower production. Clearly, there is a link between these papers. Both articles emphasize that investment in health helps improve gdp. Therefore, in future policy decisions, it should be important to keep this in mind as we seek to improve not only economic growth, but also economic development.

In the abstract for this paper, Rodrik discusses two things, namely that neoclassical economic analysis is more flexible than expected, and that igniting economic growth is very different from sustaining it. However, throughout this paper, his main point seems to be different. He points out that there is no one route to economic prosperity for a country, by juxtaposing Latin America with areas of Asia. Latin America conformed to the Washington Consensus, but for various reasons they have not been as successful as areas of Asia. Asian countries tended to implement policies vastly different than those that Western civilizations embrace. However, China, India, South Korea and others had terrific growth rates. According to Rodrik, the reasoning for this is that they protected and embraced basic ideas. These include protecting property rights, market-oriented incentives, sound money and fiscal solvency. Rodrik's main claim in this paper is that it doesn't matter how these ideas are implemented, as long as they are observed and accepted by countries. If these conditions hold and countries employ "high-quality institutions", Rodrik claims they will be succesful. Ultimately, I agree with what Andrew Head said in his blog post. Rodrik does not make a very distinctive or even perceptive claim. He essentially says that countries need to protect and observe some basic fundamentals, but it does not matter what "high-quality institutions" are accepted to implement these fundamentals. This is almost equivalent to saying that countries are very different, and that there is not one right way of improving an economy. This claim likely could have been made without all of the statistical and anecdotal evidence presented by Rodrik.

This article does a good job representing how the poorest people in the world live. However, I would argue that only having $2.16 or less of purchasing power in some areas is not as awful as we perceive it to be. Many of these people live in areas that don't use money for many things. Instead, they trade in actual physical goods such as crops, tools and things like that. That being said, it is still important that people in power do all they can to advance these areas into more modern financial and economic times. To do this, they need have enough production of the staple products such as food, tools and basic services. This can be achieved by having the government bring in modern technologies or tools to increase production beyond that of the basic worker. Should these people successfully increase their production, they can use the excess of labor to learn different trades and further increase their earning potential. They can also send people to schools and pressure the government to increase the level of the poorer schools. The paper discusses this, and it is one of the fundamental elements of a growing economy. Ultimately, increasing both the quality and quantity of education of the poor is one of, if not the, most important things that can help improve the economic and financial outcomes of a region.