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Benjamin Bayles
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I found this to be a rather persuasive article . The carbon tax promoted seemed to mirror the double dividend tax we discussed early in the semester. They referred to it as the ““revenue recycling effect” but the general idea was the same, “tax revenues to reduce existing factor taxes.” This is an idea I agree with. I do worry though how difficult it would be to set the tax to the right amount. If you set it to high for example you could cripple businesses as they would be unable to keep up demand at higher prices. If you set it to low however you many not have any serious impact on carbon emissions. While you could adjust the tax after its implementation, I feel that risks placing too many incentives for firms to manipulate their books or behaviors in hopes of manipulating future changes to the tax.
Toggle Commented Mar 30, 2016 on ECON 255 for next Thursday at Jolly Green General
I think this article brings about many of the costs associated with coal that people never fully realize. So much is talked about global warming and the carbon emissions that emerge from burning coal other environmental issues can be easily overlooked. Granted the article is slightly dated, it attributed “2,800 cases of lung cancer, 38,200 non fatal heart attacks and tens of thousands of emergency room visits, hospitalizations, and lost work days” to coal-related pollutants. While I knew there were other adverse effects to burning coal I did not realize, until this article, how expansive they have been. I also did not completely understand the chemical makeup of coal, but it appears to be comprised of every substance we have been taught to avoid, ie. “mercury, lead,… arsenic,… carcinogenic substances.” These substances are not only released in the burning of coal, but as we have discussed briefly in class, they are released in every stage of the process (extraction, transport, processing and combustion). If pollutants are released at every stage however, this should make pollution reduction easier in the long run. Innovation in any stage of the process should lead to pollution reduction.
Toggle Commented Mar 9, 2016 on ECON 255 for Thursday at Jolly Green General
The article claims that recent estimates have found the “economic value of benefits from biodiversity natural ecosystems may be 10 to 100 times the cost of maintaining them.” I don’t doubt the long term economic value to be immense, but this just seems extremely hard to calculate. Granted the study was done by Cambridge(an extremely respected university), it seems implausible to be able to place a value on biodiversity seeing as so much of its benefits are based on the resilience and stability provided. This does perhaps explain the large range provided (10 to 100), but with it being so large it makes me wonder how valuable this claim is. I tried to find the study to determine if, and in turn, which revealed preference model they used, but was unsuccessful. Most of the models we have discussed so far seemed to be on more immediate and tangible traits (seeing more sea turtles, number of whale sharks to swim with, etc…) It seems it would be harder for people to place value on something as abstract as biodiversity.
Toggle Commented Mar 3, 2016 on ECON 255 for Thursday at Jolly Green General
I had a spring term presentation on the effectiveness of aquaculture and have been a huge believer in it ever since. This article does mention it, but I feel it has so much potential it deserves a larger focus. It has been 4 years since my research but aquaculture was growing exponentially last I checked. I think it would be interesting to discuss any progress in the industry and if it is conceivable for farmed fish to one day be our exclusive (if not nearly exclusive) source of seafood. (As is the case with beef, pork, chicken, etc..)
Toggle Commented Feb 10, 2016 on More Chapters from Kahn at Jolly Green General
The basic idea discussed in this article is essentially what we discussed in the previous class; natural resources are very difficult to price and therefore are often not accounted in decision making. Unfortunately, just because we do not know how to measure the impact, does not mean that an impact is not being made. The article mentions that these impacts are viewed as an “inevitable ‘cost of doing business.” While some cost is “inevitable” it seems foolish to act without some idea how large these costs can become.(you cannot utilize cost benefit analysis without knowing the cost) No businessman would go into a deal having no idea what his costs would be, yet when we do not account for damage to the environment this is, in essence, what we are doing.
Toggle Commented Feb 3, 2016 on ECON 255 for next Thursday at Jolly Green General
I found the philosophical questions presented in the tragedy of commons to be my favorite aspect of both readings. “Each man is locked into a system that compels him to increase his herd without limit -- in a world that is limited,” I feel was both interesting and demonstrated the issue extremely well. I was more intrigued however by the quote “the morality of an act is a function of the state of the system at the time it is performed.” There are countless examples of this throughout society aside from those presented, (ie. racism, slavery, footbinding, childhood marriges, etc.) where something is found acceptable at the time only to be considered nearly evil in the future. This adds an additional confounding variable to making policy because not only do you have to account for what is moral today, but be cognizant of what may be considered moral in the future. Use of fossil fuels is a clear example of something that is, in todays world, considered not only moral, but perfectly acceptable by most. It is easy to see however, a day where burning or wasting natures non-renewable resources will be as sinful and inexcusable as many of the actions of the past we so harshly condemn. Certainly some may already feel this way, but I wonder if this will become the norm as the adverse effects begin to make larger impacts.
Toggle Commented Jan 22, 2016 on ECON 255 for Friday at Jolly Green General
While the article goes into great depths explaining all the issues that could occur I found the most interesting point to be why. The issue of global warming is obviously an example of a negative externality, but what makes it unique is its expansiveness. If it were a simple localized case of pollution you could tax the firm or industry causing the problem thereby making the MPC equal to the MSC. In this case the government would enact this tax. Climate change however is on a global scale. Government interest’s which typically considered the “social” interest become the “private” interest and governments consequently chose the optimal level of CO2 emissions which maximize their countries MPB and MPC. The global social benefit is ignored. This leaves it up to larger governing bodies, such as the UN, the daunting task of aligning countries MPC with the globe’s MSC(without nearly as much power as traditional governments).
Toggle Commented Nov 11, 2015 on ECON 280 for next Thursday at Jolly Green General
While not a focal point, I felt the discussion on longer lifespans to be the most interesting part of the paper. It related back to his larger point on the necessity to increase the quality of human agents, but in a way I had previously not fully appreciated. Shultz claims under the “social-economic view” that “man has the ability and intelligence to lessen his dependence on cropland, or other traditional agriculture,” but he is only able to do so through cultivating that “ability and intelligence.” In society, one can only cultivate these traits by investing in them. Similar though to an explanation in prior readings that high death rates in childbirth explained the under education of women, shorter lifespans reduce the willingness to invest in children’s future. By increasing lifespans then we not only receive the “satisfaction that people derive from longer life” but we gain an increasingly educated and efficient workforce. Each year of life would in theory increase the marginal benefit of education. As we mentioned in class however, if we cannot increase the quality of these later years the economic benefit of education and the individual will remain stagnant. (for each additional year the lifespan increases)
Toggle Commented Nov 4, 2015 on econ 280 for Thursday at Jolly Green General
In my life I have never doubted that my father has my best interest in mind and, ultimately, I would always trust in his financial and investment decisions. PEA’s initiative to distribute aid through the mother demonstrates however, that in many households other children are not as fortunate. This is something I have clearly taken for granted. In harsher situations and especially among uneducated parents it is inevitable that parents will have a tendency to make more selfish decision. The fact that men may be more susceptible to this selfishness than women led me to wonder if the results found here can be extrapolated to other social programs. For example, if money can be given to mothers instead of fathers, and subsequently be spent more responsibly, could we find other programs where redistributing the aid could lead to more responsible investments?
Toggle Commented Oct 19, 2015 on Econ 280 for Tuesday at Jolly Green General
I found the concluding remarks of this paper extremely powerful. “It’s because somebody knows something about it that we can’t talk about physics. It’s the things that nobody knows anything about that we can discuss.” While it is clearly an exaggeration it does stand as a reminder of how little we really know. Unsurprisingly, Economics like so many other fields has no “universal principal” which we can apply to help other struggling countries around the world. The principals that China has implemented will not (and has not) necessarily work for India, Latin America or Africa. Therefore as we aim to solve each regions problems contextually I feel the “four stylized facts” about policies act as a good starting point. While all are obviously important I feel the fourth point about sustained growth is the most difficult and requires the most effort. When it comes to developing anything really this is where I feel most of the failure comes from.
As I read, I found the breakdown of how the “poor” spend their money to be fascinating. I too fell into the “common image of the extremely poor … that they do not get to make many real choices.” I think a big reason why so many support this image is the failure to understand how far one can stretch the $1.08 and $2.16 per day. In part because this is based on a 1993 Purchasing Power index (the dollars per day they have now in 2015 is presumably significantly higher) and in part, as mentioned in a prior post, because a lot of what they buy is not necessarily paid for in traditional currency (crops, tools, livestock, etc.) they’re income gives them a surprising degree of choice. The choice to spend such a high percentage on festivals and entertainment seems ridiculous at first, but considering how much the develop world spends it is hard to condemn these decisions. (May be worth looking into the percentage of income the develop world spends on similar luxuries) I went to Brazil last spring term and will never forget the number and quality of TV’s I saw in what appeared to be a horribly impoverished neighborhood. Based on my experience and this article I am shocked by the amazing efforts people will go through to make room for luxury goods.
As I read I could not help but feel a bit a futile about the validity of our economic research. Obviously we have made great strides, but still so much seems to be based on imperfect models being tested with imperfect science (especially in reference to Neuroeconomics). How much can we draw from a model that is flawed if the machinery (fMRI’s and others) we are using to test the model is also flawed? I obviously agree with Herbert Simon’s point that “if one could understand how the machinery of cognition worked, one could better understand why people make the choices they do,” but I question how long it will be before we are truly able to do so. Ultimately, I feel we will need to combine the Behaviorist’s emphasis on refining psychological principals and the experimental economists emphasis on improving psychological methods to attain increasingly useful data.
Toggle Commented Sep 22, 2015 on ECON 398 at Jolly Green General
As I read I was increasingly impressed by the difficulties that arose in making accurate models. Krugman implies the models have progressed greatly over time in their usefulness and popularity claiming “In the 1940s and even in the 1950s it was still possible for an economist to publish a paper that made persuasive points verbally, without tying up all the loose ends… such a paper would have been unpublishable any time after 1970,” yet even models today have “some degree a falsification.” This caused me to wonder, as we become increasingly stringent on the requirements of good economic modeling, if the models we use today will carry any weight to the economists of the future. The allusion to mapmaking seemed to be an appropriate corollary. Just as “the improvement in the art of mapmaking raised the standard for what was considered valid data,” will the standard for economic data raise to the point where today’s research is no longer “valid?”
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Sep 16, 2015