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Parker Skinner
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Eichengreen and Mody's article attempts to address what they have deemed as incomplete studies on what drive capital flows. The previous conceptualization that capital flows can be determined by interest rates is proven to be limiting. It works to an extent, yet there must be other factors involved. This article suggests that it is not only demand for bonds by foreign investors, but also the supply of these bonds by developing nations. Additionally, differences between regional perceptions and fixed and floating rates must be taken into consideration when analyzing capital flows. There is a lot of “it depends.” I find the conclusions of the paper to be predictable. Simply relying on interest rates to model a globalized market ought to include plenty of it depends results. I would like to know more about where this leaves the global path to development. The paper analyzes Latin America and East Asia, but not Africa. This is most likely due to the existence of historical data and the previous financial crises that have occurred in these regions. Africa may well be key to the development story as populations on the continent continue to boom (Nigeria will pass US population by 2045) and China increases their foreign direct investment (FDI). While the US decreased FDI by $11 billion from 2013 to 2017, China increased theirs by $17 billion.
Toggle Commented Nov 13, 2019 on For Thursday's Discussion at Jolly Green General
I have chosen to comment on the malaria paper. I find the proposed symbiotic correlation between high rates of malaria and low economic growth to be very interesting. Malaria has negative impacts on the development capabilities of affected nations, while simultaneously it can also be claimed that low incomes provide ample environments for malaria to devastate communities. Malaria only adds to the development roadblocks we have previously discussed; especially in relation to resource allocation to children. Higher child mortality rates lead to more children born in an attempt to maintain heirs to the family name and caretakers in old age. On the other hand, low incomes typically translate to unstable government budgets, and therefore, lacking social programs to combat malaria. One aspect of the paper I would like to learn more about is the impact of high rates of malaria on resources allocation in the household. The paper reveals that having more children to combat high mortality rates can lead to worse conditions per child and that education can become an afterthought for girls as they are expected to raise children in adulthood. I would like to know more about the impact of malaria on other resource allocation to girls and women. Do boys disproportionately receive medical care, food, familial attention, etc. in comparison to girls in malaria afflicted nations? This would be yet another example of the dual causality between malaria and slow growth based on our previous discussions surrounding women and development.
Toggle Commented Nov 7, 2019 on 3 readings for next week at Jolly Green General
Quality over quantity is the mantra of Schultz’s paper “The Economics of Being Poor.” Investments in human capital, mainly through improvements to health and education, yield progress on the development path more so than quantity of resources. This line of thinking is right in line with the thinking outlined by Sen, the textbook, and other economists we have read. I found the mistakes of past economists to be one of the more interesting parts of Schultz’s paper. The bias of economists’ modeling and hypothesis on the developing world is just one example of how the west does not properly assess these nations. Racial bias or classism most likely play into this bias. Schultz draws the correct comparisons between the agricultural western world of the early 20th century and the agricultural world of developing nations now. It seems that since 1979, these racial or social biases have dissipated in the realm of economics, but they still exist. We have not seen the same level of attention paid to development economics as the economics of the developed world.
Toggle Commented Oct 30, 2019 on Blog Post for Next Thursday at Jolly Green General
Duflo’s paper continues Tuesday’s class discussion on Sen surrounding women’s empowerment and development. Sen’s take revealed the conceptual feedback loop between agency and treatment as it pertains to the overall well-being of women. Agency will bring about better treatment, leading to further increases in agency by women. These changes lead to development according to Sen. “Women Empowerment and Economic Development” questions the relationship between the two. She concludes that while interrelated, it cannot be stated that a “one-time impulsion of women’s rights will spark a virtuous circle, with women’s empowerment and development mutually reinforcing each other and women eventually being equal partners in richer societies.” I found the India example indicative of the future of policy decisions. The quota policy has lead to positive outcomes for the empowerment of women in many avenues. For example, power both within and outside of the household and decreased gaps in education were proven to be a result. Duflo concludes her paper with “ it will be necessary to continue to take policy actions that favor women at the expense of men, and it may be necessary to continue doing so for a very long time.” Here we can see her perspective on policy and its relation to empowerment and therefore, development. Even if there are not clear empirical results, improving women’s overall well-being can benefit them in a way that cannot be viewed as negative.
Wang, Wong, and Yip outline the steps that many "miracles" have undertaken to develop since the 1960s. The emphasis on an export-based manufacturing economy in the beginnings of the growth period to a more service-based, technological economy seems to be the common path for many of these countries. If these steps seem so clear, why are many countries unable to follow the method? The article speaks to the difficulties that many lagging countries face in implementing this strategy. I find the differences in issues between the countries that are lagging interesting. It is not one comprehensive problem that these nations face, it's more so the continued unrest throughout the past half-century. I was also interested in the importance of globalization and global economic crisis that the article touched on. No matter the economic standing of these nations, most were affected by the internet bubble in the late 90s/early 2000s and the financial crisis of 2008. Globalization aided the fast-growing economies via the ability to introduce manufacturing that left the developing world. Based on the shift to a service economy by these fast-growing nations, it will be interesting to track the future of manufacturing. I know at least within the textile industry, manufacturing has moved out of China and into countries like Vietnam and Ethiopia. These may be some of the countries that are next to join the fast-growing economies of the world.
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Sep 18, 2019