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Jacob Thompson
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One aspect of this paper that intrigued me was the disparity between giving business owners cash and giving them in-kind grants of inventory and equipment. The authors found that when business owners were given in-kind grants, they saw higher returns to capital than when given cash. This is somewhat expected, as owners given cash loans have to option to spend said cash on other items not related or beneficial to their business. However, what really caught my eye was that these in-king grants had no real effect on women with lower than average profits, especially when considering that there was a beneficial effect for men. While these grants benefit higher performing female entrepreneurs, they provide no real benefits for those who produce less. This raises the question for me, what could we do in order to benefit the lower producing cohort of women? Is microlending a viable option to help them, or would we need to look into policy changes elsewhere? I’m also curious as why lower profit women have a harder time turning physical capital into higher returns. While there is an overall benefit for women in that larger businesses owned by females are better able to produce profit, I find it unusual that this relationship stops when involving smaller female-owned establishments.
I found this paper to be a bit challenging, as there was some technical jargon that I don’t think I quite grasped and it referred to a few events and ideas that I’m not very familiar with. With that being said, I was very intrigued by the idea that East Asian countries seemed to excel at deciding when to invest in foreign markets and when to recede. While this definitely matches up with the concepts regarding East Asian countries and the Asian Tigers that we have previously discussed, I’m curious as to what their formula is and how they’ve become so adept at predicting the markets. A part of me would like to assume there’s a bit of blind luck involved, but I find that hard to believe considering the ways in which these countries have exceled in development in comparison to the rest of the world. This made me wonder whether or not this could tie back to their massive investment in human capital, as maybe they just have a more educated population that has devised extremely efficient ways of analyzing markets and interest rates, which in turn allows them to capitalize on knowing when to ease up and when to invest more. If this isn’t the case, I’m curious as to what their methods are, and would love to discuss how they’ve become so adept at this in class.
Toggle Commented Nov 18, 2021 on ... at Jolly Green General
When thinking of education as an investment and its returns, I’m curious as to what risks we can associate with investment in education and how we place a value upon it. The authors went very in depth into the rates of return on investment in education, but didn’t really discuss the risks with aiming for higher rates. Is it simply the chance that putting more money into developing education won’t lead to higher returns, or are there other risks involved with these investments in education? I would love to see how far this idea extends and how we approach education investment when taking into account the risks and rewards of it all. Additionally, I’m curious as to how the authors assign a value to education and determine when the returns on education are high enough to warrant the level of investment we have produced. Do we place a monetary value on education, or is there another way to determine an adequate amount of returns in comparison to how much we have invested in education? Overall, I wish the authors had addressed both of these questions a bit more, although I did appreciate being able to see how returns on investment in education have evolved over the years and where they are the most noticeable.
Toggle Commented Nov 11, 2021 on For Friday's Discussion at Jolly Green General
I thought this paper did an excellent job in showing just how far the consequences of gender inequality can spread, especially within developing countries. While the first thing that comes to mind when speaking of gender inequality is the wage gap, this article made me realize how often gender inequality is overlooked in other areas, such as the section discussing selective abortion. I had never really considered that parents may choose not to keep a child due to its gender, but after reading this I realize how the stereotypes and stigmas around gender may encourage parents in developing countries to lean towards a male child, as the stigmas associated with gender inequality suggest that a male child will be more likely to be able to produce. I was also surprised by the idea that parents invest less in their female children because they fear that she will die earlier than a male child would. Gender inequality is not only present in place such as the workplace or education, but even roots itself deep within family structures and how parents treat their children depending on gender. Finally, I agree with Duflo in that solving this inequality isn’t a matter of just policy or just development, but needs to be seen as an aspect of both. While each of them help to reduce this inequality, they can only do so much on their own and thus we must prioritize it more overall.
Toggle Commented Oct 28, 2021 on For Friday's Discussion at Jolly Green General
One thing that I think this summary reenforces very well is the idea that climate change and environmental problems disproportionately affect the poor. For example, the article briefly touched upon the effects on subsistence farmers, who would be devastated by the negative effects towards crops that result from a two to four degree Celsius increase in global temperature. These families depend on their own crops as a source of food, and any hindrance to the growing of these crops would significantly affect the food consumption and nutrition of the family. Extending even further, this could lead to problems with development for each member of the family, as less nourished children tend to face problems in both mental and physical growth. Additionally, the irregularity of the weather caused by an increase in temperature would cause further problems for subsistence farmers, as an unexpected hurricane or other weather event could destroy their crop yield and thus deplete their source of food. This shows that despite the numerous potential problems already presented in the paper, global warming has as seemingly limitless scope in how it can negatively affect all aspects of the world. I tend to forget just how many global problems can be traced back to global warming, and this summary served as a good reminder that it is way more pressing of an issue than how we treat it.
Toggle Commented Oct 21, 2021 on For Friday's Discussion at Jolly Green General
One thing from this article that I found interesting was the close relationship of the chaebols with the government. I thought it was very intriguing how the government poured funds into a few select companies in order to spark their development. In turn, this led to large amounts of investment through the firms, both in physical and human capital. The strict monitoring of the Korean government to ensure these family owned companies were using their funds correctly showed that direct government intervention can be an extremely effective strategy for developing countries. This ties back to the paper we read last Friday in terms of the idea that business infrastructure is a key factor to enhance development in growing countries. I felt that South Korea provided a great example for this idea, as they clearly outlined how they wanted business to operate and in turn directed them as to how to invest in several different forms of capital. One thing I’m left wondering about this idea is the ways in which the government prevented any of these businesses from obtaining a monopoly. The article mentions this briefly, but doesn’t really dive deep into the ways in which they did so.
I thought this paper was a very interesting read and provided some solid insight into how different policies and institutions affect the overall development of a country’s economy. One trend I noticed in the countries that lagged behind is that many of them are somewhat recently independent. This raised the question for me, to what extent (if any) should more developed countries intervene with and/or assist newly independent countries as they make the transition to developing their own institutions and policies? The first scenario that comes to mind for me is America’s involvement with the restructuring of the Japanese government after World War II, and how Japan is now a very efficiently operating country. However, I’m still not sure how much of their development can be attributed to the involvement of the United States, and think it’s a very interest topic to discuss as a whole. Another aspect of the paper that I found interesting was the emphasis on the importance of an export-oriented economy for developing countries. While I understand how an export heavy country can quickly gather the means to develop, I’m curious as to how some of these laggard countries could implement this policy. For example, the Cote d’Ivoire focused very heavily on exporting cocoa, but struggled once the market for cocoa took a hit. I’m curious as to how they could now shift their focus to a more industrial and manufacturing based export policy rather than agricultural focused, or if that’s even a realistic option at all.
Toggle Commented Sep 30, 2021 on For Friday's Discussion at Jolly Green General
I think it’s fascinating to think about economics beyond the scope of just models and theories, and really enjoyed the way I was challenged in reading this article. I had never before considered an alternate approach to economics beyond using models to explain why certain things happen the way they do, as it’s all I’ve learned up to this point. After reading about how Hirschman strayed from tradition in his approach to development economics, I can’t help but think if an approach like this could work in other aspects of economics as well. In my opinion, approaching an economic topic without using a formal model could provide for a very interesting discussion, as it allows us to step outside of all the assumptions that normally have to be made and truly try to tackle the topic at hand. While I acknowledge the severe importance of models to economics as a whole and recognize their necessity, I found this piece by Krugman to be refreshing in that it made me realize that economics does not always have to be so formal and by the book.
Toggle Commented Sep 23, 2021 on Krugman for Friday at Jolly Green General
One thing that I found interesting from this article was how similar the SDGs sounded to the new wave of environmental, social, and governance (ESG) goals that have been rapidly gaining popularity among large corporations and companies. Sachs suggests the separation of SDGs into the three categories of economic development, environmental sustainability, and social inclusion. These values are strikingly similar to those of ESG goals, as they all tend to focus on the balance between economic improvement while accounting for how production affects the world as a whole. I recently read an article on the Wall Street Journal that discussed how many companies are emphasizing ESG goals more as they prepare for initial public offerings. Allbirds, a sneaker company, declared in their IPO filing that “the more sustainable we are, the better we believe our products and business will be.” I feel that this new focus on ESG goals and funds mirrors the emphasis of SDGs, as many companies are now realizing the importance of operating in a sustainable manner while also making an impact on social issues where they can. However, it is possible that some of these companies may be using ESG ratings for the sole purpose of boosting their image, and in turn not actually doing anything to better the planet. I believe it could be interesting to explore some kind of mandated focus on ESG goals for companies in an attempt to improve the condition of the world, similar to how a mandated focus on SDGs could do the same thing. https://www.wsj.com/articles/for-chobani-allbirds-other-coming-ipos-greed-is-out-do-gooding-is-in-11631093400
The biggest takeaway that I’ve gotten from this class is the true of extent of environmental issues and how they impact such a wide variety of people and areas. I will admit that I was a bit naive coming into this class, I was aware that there were many problems facing the environment, but assumed they were fairly consolidated and we couldn’t do much to change them. However, my opinion quickly changed through the readings and class discussions. I think that the topic that struck me the most was that of mountain top removal and its impacts on surrounding areas. I had no idea that we were still using practices like this, and was completely unaware of the fact that it causes major health issues for the people that live nearby. I was even more awestruck that the President ordered a stop of the research relating to mountain top removal and harmful health consequences, despite previous research showing a clear correlation. I’m thankful for the opportunity this class has given me to really learn about how vast environmental issues can be, and that there’s more than just air pollution and global warming. In terms of being a better citizen, I feel that the best thing I can do as of now is to prevent myself, as well as those around me, from being blinded by ideology. I was amazed at how much of the material we covered involved problems that could be greatly reduced if we simply put aside our political views. So much pollution and harm for the environment has stemmed simply from stubbornness and selfishness, and while this may not be a problem we can fix in the short run, I feel that it could very well be fixed in due time as long as we teach our children the true impact we can have on the environment. I hope it’s not too late for that.
Toggle Commented Apr 21, 2020 on ECON 255 Final Exam at Jolly Green General
After reading this article, I couldn't think of a more relevant time than now to consider the positive effects of nature on our health. As people have been isolating themselves and practicing social distancing, it seems that more and more people have increased their amount of time outside, if only because they're tired of being trapped in their house. While it may seem like a small thing to look forward to, it becomes the highlight of many people's day. Another aspect of the article that caught my attention was the idea of people feeling stressed and helpless about the worsening condition of the world. While I feel this is true for a select group of people that are aware enough of our growing problem, I fear that it may be irrelevant to others. As much as I'd like to have faith in humanity, I believe that there is a large percentage of the world that doesn't feel stress about environmental issues, as they feel that it isn't their problem as they likely won't be around for the consequences. Being able to be in a class such as this one gives me much more faith than I previously had, but I still fear the nonchalant attitudes towards the environment that many others have.
I found this article to be interesting because it reflected a lot of what I saw immediately upon returning home to Richmond after school closed. Many people my age continued to hang out in large groups, going to sun bathe on the James River and completely disregarding the idea of social distancing. However, as the death toll began to rise in Richmond, I started to witness a lot more people taking it seriously and beginning to stay home. While I find it disheartening that death is the only factor that incentivizes people to stay home, I'm at least optimistic in the idea that people around me are finally taking the threat seriously. Another point from this article that I found interesting was the overall decrease in travel and movement since the start of the pandemic. This has brought up the question of how the coronavirus has affected our output of emissions and pollution level. While I initially thought this overall decrease in pollution to be a positive side-effect, I've since changed my mind. An article by NBC expresses worry about this sudden decrease, as some economies may increase production significantly and travel will increase substantially once this pandemic passes (https://www.nbcnews.com/science/environment/coronavirus-lockdowns-have-sent-pollution-plummeting-environmentalists-worry-about-what-n1178326). Many countries will want to help their economy bounce back as quickly as possible, and I don't find it likely that they will consider the effects on the environment when they do so.
I was honestly shocked by the ease in enforcement that the EPA announced during this time. The fact that coronavirus largely affects the respiratory system and becomes especially dangerous when pneumonia is developed as well, but it’s even scarier considering the EPA is increasing our risk of developing respiratory problems along with it. If anything, I feel that now is the ideal time to approach these regulations in a stricter fashion in order to improve air quality and hopefully decrease the negative consequences of coronavirus along with it. It continues to baffle me that in a time like this, where it’s ideal to enhance our environmental protection regulations and make serious progress in improving the condition of the earth, humanity still finds a way to attempt to harm the environment more. Rather than placing efforts in a positive change, such as the recovery of the ozone layer that has been observed in recent months (https://www.zmescience.com/science/ozone-layer-recovering-2020-1135134/), the EPA has decided to allow companies and producers to increase pollution levels. In terms of a model, I feel it would be best to observe the marginal social cost and marginal social benefit. While allowing these changes in pollution may provide a slight benefit in terms of production, I feel that the social costs would greatly outweigh this benefit, as it could seriously damage public health and put a lot more people at risk.
I found each of these articles particularly interesting, as I hadn’t really considered any of the negative externalities discusses in them prior to reading them. I was very surprised by the first article, as I had no idea air pollution had that much of an impact on cognitive abilities. Pairing these externalities with the more commonly known health and environmental ones, pollution poises an even bigger threat to humanity. I feel if data such as the kind displayed in the first article were more commonly known, people would be more incentivized to cut down on air pollution, as it directly affects them rather than affecting the environment around them. I found the second article to be much more intimidating, especially the fact that 500,000 people die each year from this. However, I feel that these health issues are just as important as the cognitive effects, and potentially even more so. It baffles me that there are people that are capable of reading articles like these and still refusing to admit that the world needs to change in terms of the way we address pollution. While both the first and the second article present extremely pressing issues, I argue that the second article is much more relevant to us at present, as way too many lives are being lost due to the level of air pollution. That being said, with the real interest rate currently at a negative, it is the ideal time to borrow money in order to develop more efficient items, such as more efficient cars. However, I’m sad to say that I doubt that this idea will actually come to fruition, as enough people simply aren’t ready enough to admit the need for change.
Toggle Commented Mar 12, 2020 on 3 short papers for Friday at Jolly Green General
The first point from this paper that stuck out to me was the fact that China burns more coal than American, the European Union, and Japan combined. This led me to consider how that has changed with the outbreak of the coronavirus. China’s air pollution has plummeted since the virus was first found, as product has taken a steep drop due to safety measures. Perhaps this could encourage China to want to maintain these low pollution levels once this is over, or at least push them to apply more environmental protection regulations. Another are of the paper that I found intriguing was the section on mountain top removal, as it reminded me of a previous article we read. After reading about the extreme negative effects that mountain top removal has been proven to have on surrounding areas, I was left curious as to why we are no longer researching these aspects. There is clearly a relationship between areas near mountain top removal and higher disease and death rates, so why would anybody want to stop this research? I feel that it should not only be reopened, but made a priority as well in order to be able to support the official end of mountain top removal as a source of coal. Finally, after reading about all of the negative effects that coal has on the economy as well as the environment, I’m curious as to why we still aren’t pushing to switch to more alternative sources of energy. While some of them may be more expensive, I feel that the benefit in the long run will be far greater than if we continued to use coal for the majority of our energy production. Whether it’s continuing to research alternative sources of energy, such as the group at Ohio State that are attempting to find out how to extract coal’s carbon without burning it, or simply making the switch to solar or wind energy, I believe that changes need to be made.
Toggle Commented Mar 5, 2020 on Discussion Paper for Friday at Jolly Green General
I found this paper to be very interesting and informative, but I was left with two questions after reading it. First, I found myself curious as to how the exit fee is enforce in Belize. If people refuse to pay, are they held there permanently? I felt that a bit more context here would have helped a little in my understanding of the whole paper as I would be able to acknowledge the repercussions of not paying the fee. Additionally, I found myself wondering as to just how true some of these survey answers are. The fact that the survey was done in person suggested to me that there could have been a bit of pressure placed on the survey taker, as they did not want to be judged by the person giving them the survey. Thus, it’s possible that they provided a higher willingness to pay than they actually believe is reasonable, as they felt it would look bad to say either no or a small amount of money. And while I also believe by acknowledging the existence of the hypothetical bias to the survey taker helped to prevent it, I feel that it still applies in some aspects as some people may still provide untruthful answers, perhaps if they didn’t plan on coming back to Belize or simply wanted to seem like a good person. One aspect that I found very intriguing was the idea of the anchoring bias. I found it very ironic that when people were made aware of the original fee amount, they had a tendency to have a lower willingness to pay an increase fee. If a person is on vacation in Belize, it is very likely that they are rather well of financially, and they should be able to pay a higher fee than they stated. Finally, regarding the conclusion, I agree in the fact that Belize should look to expand how it raises funds for their conservation efforts. They should examine which recreational activities are most popular among tourists, and find a way to capitalize on the consumer surplus or place a conservational tax on said activities.
One aspect of this essay that I found interesting was the importance placed on space for recreational activity in the future. Krutilla concluded the piece by emphasizing the need to reserve various different types of land in order to save areas for future recreational activities while only acknowledging the biological consequences and not the environmental ones. Personally, I disagreed with this idea, as I interpreted it as basically setting aside land to destroy in the future, basically putting the problem off for a few years. Why not set aside the land for permanent preservation rather than just a resource to help construct future locations of recreational activity? In this aspect, I feel humanity needs to be willing to sacrifice certain aspects of recreation in order to move closer to improving the environment as a whole. Another idea of Krutilla that struck me was his claim that advances in technology will compensate the lack of minerals in the future. While this may be true in the future, it’s a reality that we have right now yet refuse to take action towards. Solar and wind power have been proven to be efficient sources of energy, yet nobody wants to make the switch because it would be too expensive. I feel that a carbon tax would really help to incentive this change, as many businesses would then be encouraged to cut their carbon emissions and switch to alternative, more ecofriendly sources of energy instead.
Reading Coase’s writing, I couldn’t help but think that some of the examples he used to support his ideas and refute those of Piguo were rather outdated. One particular section that I found interesting was his introduction of how to determine a nuisance and then who is liable for said nuisance. After reading about it, I immediately thought back to our class discussion on the destruction of the dam in the Maury in Rockbridge county and how Coase’s theorem is heavily dependent on simplified situations that do not apply to modern problems. This led me to consider the potential nuisances that were created by the dam before its destruction, and possible nuisances that could arise now. In doing so, I realized the true difficulty in determining what can be considered a nuisance and what cannot. For instance, while some may argue that the dam created safety issues and was harmful to the ecosystem around it, others could argue that the dam was crucial to recreational activity in the river. Thus, the question of which of these nuisances is more important is posed. Here is where I found a bit of a problem in Coase’s theory, as in many of the examples he used, a nuisance was determined in a legal form rather than the best economic choice. Additionally, there are many factors surrounding the destruction of the dam, such as the difficulty of recreation, that don't fit within Coase's simple examples. I felt that the determination of a nuisance was too subjective, and the outcome of the problem relied too heavily upon legal officials, such as judges. After reading the essay, I’m left with the question of whether or not there is a more effective procedure to solve problems such as the destruction of the Rockbridge dam in an economic fashion, or will it remain a matter of opinion and legal procedures?
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Jan 15, 2020