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This paper was fairly familiar to me after the Natural Resource and Environmental Economics class last winter. After reading this, many different thoughts flowed through my brain so I'll try to organize them in some sort of cohesive manner. My first thought after reading this and many similar papers is I truly don't understand the reasoning behind the denial of climate change. I wrote probably 2-3 blog posts in the Econ 255 about the presence of Oil and Gas companies in lobbying but I don't know how that could explain all of it. The denial of climate change reminded me of a relevant quote from the HBO show The Newsroom that I dug up. "Bias towards fairness means if the entire congressional republican caucus were to walk into the house proposing a resolution that the world was flat the Times would lead with, "Republicans and Democrats can't agree on shape of earth."" Now this post isn't meant to condemn a party in any way, but rather question the motivation behind its' leaders continuous questioning of what is a scientific reality. Especially when leaders such as John McCain accepted the reality of climate change not too long ago (for those curious John McCain was once called Captain Climate for his bipartisan work with senator Lieberman on climate change). I understand there is argument for how much is manmade and how dire the consequences will be or how far out the harshest consequences are but the outright denial baffles me. My second thought is that it is human nature to not want to sacrifice one's way of life. It would require a major shock in my opinion to make people want to change their consumption habits in developed countries. How do we combat this desire to consume then in terms of shifting toward clean energy and less carbon emmissions? Well for one we need to make alternative energy forms competitive against fossil fuels. There are constant improvements in the efficiency of solar and wind energy as well as the development of MSR nuclear energy (I highly recommend taking a look at MSR). Once the price is competitive I think people will have a much easier time shifting their energy sources. I also think diversifying our energy portfolio as we talked about in 255 would help insulate us from potential shocks to an energy form. My final thought is that I can not picture the world ever reaching the fully developed consequences detailed in this paper. Maybe that makes me part of the problem in a sense, but I just feel that innovation has always allowed us to adapt to different circumstances. It's entirely possible this will be one fight technology can't win, but I also can't help but think we would ever allow climate change consequences to get that far. I couldn't begin to imagine what the breaking point would be, all I know is that desperation drives innovation and we are nothing if not innovative.
Reading Le Goff and Singh's paper reminded me of a couple papers that I've read this year both in this class and in Global Politics. One paper in particular that came to mind was a piece by Peter Evans, in which he examines the political atmostphere and economies of various countries. One of the countries he looks at is Zaire and their former exploitative leader Joseph Mubutu Sese Seko. Mubutu controlled the vast supply of natural resources that Zaire held and sold them off to the highest bidder for personal profit. Political corruption runs rampant in third world countries. Inefficient and corrupt state institutions make strides in alleviating poverty near impossible. Money is allocated in inefficient ways to benefit a select few while most are left out. Le Goff's paper talks about the benefits that are available with the strengthening of financial institutions and subsequent expansion of available credit as well as human capital development, primarily in the form of education. Neither of these solutions are made possible without strong, honest state institutions. Alleviating corruption and establishing these strong state institutions is the only way that these countries can move to the next stage of strengthening financial institutions. After those three steps as Le Goff points out, then liberalization of trade can begin to have a positive effect.
Toggle Commented Nov 30, 2016 on Reading for Thursday at Jolly Green General
In Barry Eichengreen and Ashoka Mody's paper, they examine the relationship between interest rates and capital flow between emerging and industrialized markets. What they discovered, is that contrary to popular belief, it is not merely a demand issue or supply issue. That is to say, the flow of capital can not be traced back solely to the financial conditions of a specific side of the market. Eichengreen and Mody dispel the notion that it is solely the conditions of the emerging market or solely the conditions of the developed market that dictate capital flows. There is not a single missing link but rather nuances and complexities of the market at the time that lend itself to more favorable conditions for capital outflow. What struck me reading this paper is that here lies another example of when our models don't paint the entire picture (they are not supposed to) but yet they still serve to influence monetary policy. Here we see that as always, the real story is far more complex and so each case must be taken at face value, examining global context in order to determine the best course of action (best here applying both to emerging markets looking for foreign capital and foreign markets supplying the capital.)
Toggle Commented Nov 16, 2016 on Readings for this week at Jolly Green General
When reading Malaney and Shchultz's pieces in tandem, one can not help but feel a sense of helplessness. These sub-saharan countries are stricken by a disease that keeps them in a cycle of poverty. These countries often have weak state institutions that make it near impossible to implement effective public health/education policies, and as Esther Duflo pointed out in the video we watched in class, our foreign aid might be ineffective in combating these countries' serious problems. Duflo however did talk about approaching some of these problems (malaria net use, vaccinations, etc) in a behavioral economic context using research and control groups to identify effective incentives. I do believe that with this kind of research, we can start to alleviate some of the more serious problems. I also believe that it is foreign technology that might end up being more useful than foreign monetary aid. As Schultz so aptly claims, our future as a collective species will be determined by our "intelligent evolution of humanity." One such example of this intelligent evolution was an article I read not too long ago about the development of a GMO mosquito that was bred specifically to target Zika carrying mosquitoes and kill them. http://www.cnn.com/2016/03/07/health/zika-florida-gmo-mosquito/ It is ingenuity such as this that I think will contribute most to the elimination of malaria. Once this disease is mitigated, women might be more empowered instead of being confined to child rearing, children will be healthier and can attend more school, and then we might finally see these economies start to develop. Once this development occurs and the economy grows, we often see a push for more stable state institutions which will serve to reinforce this development. It is just so interesting and devastating that this one disease could be the barrier holding back millions from breaking the cycle of poverty.
Toggle Commented Nov 2, 2016 on Readings for Thursday at Jolly Green General
It was interesting reading Rodrick's piece when my global politics class with Prof. Dickovick had just finished talking about developing economies and government's role. During that section we examined a couple different articles that looked at the role of the state in developing economies. One such article was by Peter Evans titled, "Predatory, Developmental, and Other Apparatuses: A Comparative Political Economy Perspective on the Third World State." In this piece, Evans also talks about Zaire and the role that Joseph Mobutu Seko has played in depriving the people of Zaire the chance to use the natural resources available so that Seko can profit himself. Evans does not make this point however to condemn state involvement, but rather to point out that it is the quality of state involvement, not quantity that induces growth. Evans would go on to talk about the varying levels of success that countries such as South Korea and Japan would have with heavy state involvement in the economy. Evans piece, I believe, ties in to Rodrik's broader point; that a lot of what goes on in developing economies is context-specific. There is no one "fix-all" method and Rodrik challenges the notion that Western economics holds all the answers (they are models of what COULD be not what IS). I think these sort of case studies are important in identifying varying factors across different economies, which help us understand why things happen the way they do, and hopefully be able to make more accurate predictions and corrections when similar cases develop.
Toggle Commented Oct 5, 2016 on Reading for Thursday at Jolly Green General
I found Krugman's article very insightful, because I for one tend to have a hard time relating to some of the models we have looked at over the years. I remember the frustration of sitting through Prof. Guse's microeconomic theory class as we poured over model after model that would hold true "given certain assumptions." These assumptions seemed impossible to hold true in reality and I found myself frustrated with trying to study something that may not be able to ever play out in the real world. That's why I found myself so interested in behavioral economics and the electives offered in economics. There we got to see how the real world actually operated and how to approach the real issues that affect us in an economically real sense. I do however, recognize the necessity of the models. Even policy proposals we developed in class were based not on metaphors and anecdotes, but rather models that were developed. That is why I found myself at a crossroads after reading this paper. This paper I feel addresses the intersection between behavioral economics and economic theory; The necessity to keep developing models, while also gaining insight from how things are playing out in real life.
In Amartya Sen's Development of Freedom, Sen talks about the difference between culmination outcomes versus comprehension outcomes. Essentially it is that the results of an action are not as important as the processes used to achieve that outcome (in particular,a free market achieving the same economic results as a dictatorship is more favorable). What struck a chord with me there is that in my Global Politics class as well as the Env. and Natural Resources class, we have talked about what makes up "economic growth." We discussed how things such as paying a lot of money for medicine and health as well as things such as divorce represent growth and add to our GDP. That is why similar to Sen's point, we need to stop and wonder if consistent growth is as important as the means to achieving such growth. The types of freedoms that Sen talks about as desirable outcomes are ends in themselves. What sticks out to me as an important contribution to unfreedoms especially in America are environmental issues that disproportionately affect the poor. For example, housing near oil refineries, waste plants, etc. are disproportionately occupied by minority groups. This is a particular type of unfreedom as these groups do not have the means to live elsewhere and are essentially forced to expose themselves and their families to the runoff, radiation, etc. that adversely. Freedom such as access to health and healthy living conditions is imperative in discussing how to help those that are impoverished. Reducing use of such facilities, while in the short-run might cause economic decline, will lead to long-run benefits of health (an end in itself) as well as the prospect of healthier and more productive workers. This change could very well lead to long-term economic growth at a higher rate than what we experience even now.
While reading "The Economic Lives of the Poor," two things really stuck out to me. The first thing that stuck out to me was the misconception that the poor use or even have to use every penny to obtain more calories from food. Things such as festivals, radios, and bicycles also used a portion of the poor's budget. While this seems like a misuse of their limited funds, are we in a position to critique how they derive their enjoyment? Or as Elizabeth pointed out in her comments, maybe they are maximizing their utility and therefore allocating funds efficiently. It was interesting to note that even though the poor are aware of their poverty, they don't have lower levels of happiness relative to their economic status. I also wonder if the more sugary,salty foods are easier to obtain (such as fast food here) and thus are more easily consumed since the poor in this survey often work multiple jobs. The other thing that stood out while reading this article was the necessity of sound infrastructure. As we talked about in class, there was a study in 2003 that basically determined an unending cycle between health and income existed. In this cycle, poor adults have kids who are sick and those sick kids are unable to go to school, perform physical tasks and they grow up then to be poor adults who give birth to a new generation and thus the cycle continues. Infrastructure seems to be at the heart of this, where inadequate tap water, access to electricity, roads, etc can all have a devastating effect on a child's learning and ability to stay healthy. This is particularly true in the case that Pierce pointed out, where he found there was a strong positive correlation between children's diarrhea and women's literacy rate. One way to break that cycle is addressing the health aspect which will invariably lead to better class attendance, healthier kids, and thus literate adults to hopefully break this seemingly endless cycle.
Toggle Commented Sep 14, 2016 on ECON 280 Reading for Thursday at Jolly Green General
Schrag's article paints a bleak picture on our future and the future of climate change. For one, Schrag points out that even if we were to cut our emissions to 0 (as professor Casey always jokes that requires us to stop breathing), it would still take 200 years to return our CO2 levels to pre-industrial periods. That means that for 200 years the Earth would continue to feel our effects even if we were to cease existing, resulting in more glaciers melting, sea levels continuing to rise, and other negative effects. This is a very sobering thought to process. Schrag further points out there is no "silver bullet" solution. Just as Professor Casey we have to diversify our energy portfolio. We can't expect to find one energy source and rely solely on that source as we expose ourselves to some sort of exogenous shock that could cripple us. What baffles me are those that don't acknowledge the use of fossil fuels at the rate we use them is a non-issue. Further along that point are politicians who hide behind big money and donations and ignore science. I was curious what the deniers says (also there is an alarmingly high rate of 56% of Republicans who deny or question climate change and the science behind it.) So I was also curious as to what the argument was which led me to "the most comprehensive assault on global warming yet." I know none of us are climate scientists, but I found it to be an interesting read nonetheless. http://billmoyers.com/2015/02/03/congress-climate-deniers/ http://www.dailywire.com/news/2071/most-comprehensive-assault-global-warming-ever-mike-van-biezen
Toggle Commented Mar 16, 2016 on ECON 255 for next Thursday at Jolly Green General
I found this article really well written and informative as it contained a lot of detail. I think it helped contextualize and put an actual number on what we all seem to know (except for our friends in Washington it seems): coal is hazardous to our health and to the envrionment. There are just so many externalities that have to be considered when dealing with coal that just seem to be forgotten, or tolerated by society. Furthermore, as we discussed in class Tuesday, an over reliance on fossil fuels and coal is dangerous to our energy "portfolio." All it would take is some exogenous shock that took out coal/oil production and our country would be in a great deal of trouble. It also really concerns me that their seems to be a refusal in Congress to address these concerns as money continues to pour in from coal and other nonrenewable energy businesses. https://www.opensecrets.org/lobby/induscode.php?id=E1210 https://www.opensecrets.org/industries/indus.php?ind=e01 Are campaign contributions and lobbyists that influential that they become blind to science and reasoning? It's really an unfortunate situation that we find ourselves in, especially for those living and working in these mining communities who are hurt even more by the excavation and production of coal. Hopefully the researchers can team up with lobbyists and action groups for the renewable energy side of the argument to put this incredibly in-depth analysis into a plan to enact some sort of change that we so desperately need.
Toggle Commented Mar 9, 2016 on ECON 255 for Thursday at Jolly Green General
As I read through the article, the statistic that stuck with me was that the economic value of benefits from biodiverse natural ecosystems may be 10 to 100 times the cost of maintaining them. This statistic stuck with me because putting biodiversity in economic terms is a way to potentially please government officials on both sides of the aisle. Financial incentives have proven to be one of the only ways that environmental issues can be tackled and biodiversity is no exception. However, what this article points out that I hadn't thought about was the notion of (from an earlier comment) "financial support without direction." This also ties into the article's second tier, where we have an obvious lack of cohesive strategies to tackle this increasingly important issue. One issue with establishing an institution that would focus on biodiversity that biodiversity is too narrow an area of concern. Rands et al wants to see the biodiversity conservation movement become something more, extending beyond an environmental issue, into the treasury and even national security. We have the Environmental Protection Agency but when you have coal and oil industry pouring money into Republican presidential candidates (70m in 2012, 62m for 2016 as of august 2015) you have an obvious disparity in who's voice will likely be heard. Environmental economics has no one right answer, but I fear this is the sort of issue that will be dealt with retroactively unless some people come to their senses.
Toggle Commented Mar 2, 2016 on ECON 255 for Thursday at Jolly Green General
I'd be interested in hearing more about policy makers and what is viewed as acceptable in the political sphere when it comes to fixing nonpoint and point sources of pollution. Is this something private industries might be more effective at then the public sector?
Toggle Commented Feb 10, 2016 on More Chapters from Kahn at Jolly Green General
I thought this article did an excellent job detailing how non-market valuations play a very real role in figuring out optimal courses of actions as they relate to the economy and the environment. One issue I have in the choice experiment however, is that it is very difficult for a diver post-dive to accurately value how much various aspects of the dive meant to them in a hypothetical scenario. I know in class we talked about having the survey taker be aware of the hypothetical bias, but that's about it in mitigating that factor. I know earlier in the comments was a mention of price discriminating using data on demographics and income for various dive sites, but then I think you run into the problem of divers just substituting an expensive dive site with high biodiversity and coral cover for a cheaper site with medium biodiversity and coral cover. This substitution then has a negative effect on the places trying to maintain high biodiversity at the cost of higher prices.
Toggle Commented Feb 4, 2016 on ECON 255 for next Thursday at Jolly Green General
As Jacob pointed out, there is an interesting correlation between education levels and family size. According to the population reference bureau, 97% of the growth in population that occurred between 2011 and 2012 could be attributed to developing countries. Furthermore, in many developing countries, women with no education tend to have families twice as large as their educated counterparts. It seems then that investment in human capital in developing countries, especially among women, could become a necessary step in slowing population growth. The notion of financial incentives for smaller family sizes is interesting although there already is a huge financial incentive for smaller families (raising a child up until the age of 18 usually costs between $250,000 and $300,000). Unfortunately, enforcing family sizes in the Western hemisphere is likely an idea that will be rejected up until the situation is too extreme to correct, because infringing on family rights is considered one of the most extreme violations.
Toggle Commented Jan 21, 2016 on ECON 255 for Friday at Jolly Green General
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Jan 21, 2016