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Tommy Mottur
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The World Bank's "Turn Down the Heat" article provides a comprehensive analysis of the damages posed by impending global climate change, touching on almost all industries and facets of life that will be affected by this crisis. They also make a point of the article to argue that strong action, comprised mostly of altering our current methods of production and transportation, is empirically "worth it" financially. Although this fact may seem obvious to those who know that left uninhibited, climate change will make uninhabitable thousands of square miles of coastal areas, some of the most populated places on earth, or that it will both greatly and permanently negatively impact crop production in nearly every area on earth, it is still important to clearly state the massive difference between the cost of not taking action against climate change and the relatively meager cost of taking immediate action to prevent it. One of the most intriguing parts of the article was the description it repeatedly went through for different continents where the negative effects of climate change not only were predicted to manifest themselves immediately in terms of decreased crop turnout and higher sea levels, but also, and perhaps even more importantly, through the "ripple effects" it would have on economic metrics. Similar to how low confidence levels in the future ability of a government to finance their bonds will cause a run on a bank, inciting financial crises, the decreased productivity in agricultural markets will cause food prices to rise not only due to the decreased supply of goods, but also due to what will be the increasingly prevailing belief that crop productivity and the hospitality of the current climate will only get worse as time goes on. In this sense, it also strikes me that it is similar to the concept of inflation, where the belief that a currency will depreciate will incentivize individuals to spend in the short term. In this way, climate change may have a similar effect: Individuals holding the belief that their homes may be more vulnerable to hurricanes and other natural disasters, or subject to decreased fertility for their crops, will see their homes and businesses devalued in the long term. This "ripple effect" is something that is not as touched on in the common discussion about climate change, but it both draws interesting parallels to economics and presents a reason as to why climate change will be all the more dangerous as we move through the 21st century.
Toggle Commented Dec 5, 2019 on Last Blog Post for the Year at Jolly Green General
The paper "Does Aid Reduce Poverty", by Juliana Milovich, aims to characterize the causal relationship between foreign aid and poverty levels. It does this by targeting one country, the US, and comparing the aid given by the US during specific periods to countries who have spent time as temporary members of the UN security council with the data from the multidimensional poverty index (MPI), which measures levels of access to education, health services, and general quality of life, from the countries which received aid from the US during these periods. Although she finds a statistically significant difference in percentage levels of access to education, health, and quality of life, she notes that when poverty is measured simply with income variables, no statistical difference is found in these countries. The part that I take some issue with is that the countries being examined, the temporary members of the UNSC, are in an entirely different situation when they find themselves on the council than when they do not occupy a seat. The paper notes that these countries receive an average of 59% higher amounts of aid when on the council. This allows for a useful sample of countries who all experience heightened levels of aid for a fixed time, which is a good feature for a study of this kind. However, these countries are now privy to international contracts with powers that much outrank their own, and may well often be manipulated or bought into making economic decisions that they would not otherwise make in absence of their position on the council. This means that changes in any economic variables, including the poverty variables examined in the MPI, may be affected by the lurking variable of increased international standing just as much as they are by the increased aid they receive as a result of their position. As such, it seems like this sample of countries is not an isolated example of increased aid, but rather a sample of countries who all gain temporary access to a new level of international bargaining power, access which may cause them to make decisions in entirely different ways than usual.
Toggle Commented Nov 20, 2019 on Next Week at Jolly Green General
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Nov 20, 2019