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Savannah Corey
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I found this paper to be a great way to wrap up the end of our semester, as it reiterates the "it depends" motto of our class through the differing measurements of poverty. Milovich reveals that aid has a statistically significant effect on reducing poverty when it is measured by the Multidimensional Poverty Index. However, when poverty is measured by income, the effect of aid is not statistically significant. This highlights one of the major insights we have discussed this term that income is not an accurate measure of poverty and that it is much more nuanced and multidimensional than a household’s income. Because the MPI considers factors such as, education, health, and living standards. As we have learned this year, evaluating investments in human capital is critical to understanding the intricacies of poverty on a global scale, and the MPI considers these factors contrary to measurements solely based on income. In a sense, I think this article emphasizes the importance of considering the social benefits of foreign investment, reminding me of the “Returns to Investment in Education” article that highlighted the public benefits of investments in primary schools and education for girls. I think that Milovich’s article reiterates the fundamental takeaway from this year that a comprehensive, multifaceted perspective is essential for evaluating poverty in a global context and that we must consider positive social returns in the long run rather than solely government spending in the short run.
Toggle Commented Nov 13, 2020 on Last Post of the Year at Jolly Green General
This was a very complex, technical read, yet very thought-provoking. Eichengreen and Mody's illustration of the interconnectivity of U.S. bond yields and interest rates with those of developing countries. From what I understood is that on one hand internal factors such as government policies that promote macroeconomic stability and economic liberalization incentivize investors, whereas on the other hand, low interest rates in developed nations like the United States increase capital investments. Similar to the thoughts of many of my classmates, I was shocked that the financial prosperity of developed countries has such a dramatic effect on emerging markets in developing countries. I am eager to discuss in class how the current political climate and COVID-19 effect flow of financial capital between developed and developing countries.
Toggle Commented Nov 6, 2020 on For Friday's Discussion at Jolly Green General
I am fascinated by Tinbergen's study regarding the race between education and technology. In this article, the authors illustrate that "the race reflects, on the one hand, the skill-biasedness of technological progress with its consequences for income inequality and, on the other hand, to the pivotal role of education in mediating this relation," revealing that education is fundamental to decreasing the income inequality gap. Before this article I had not thoughtfully considered how the rate of technological advancement acts as an exogenous factor in the private returns of schooling. Therefore, I think it is imperative that policy makers not only focus on achieving universal primary schooling in lower-income countries, but also to enhance the quality of education in developed countries to maintain pace with the rate of technology advancement. It is mind-boggling that policy makers do not immediately increase investments in the education budget in both low and high-income countries, as the world average private rate of return is 8.8% for an additional year of schooling. While the authors admit “social returns are lower than private because researchers can account for full social costs, but they do not include social benefits,” they also illustrate that “monetizing the value of just one externality of education - reduced mortality - Pradhan et al. (2018) found that the social rate of return to investment in one extra year of schooling in low-income countries is 16%,” so I do not understand why more funds are not allocated to the education sector to close the income inequality gap, if it is known that the social rate of return will exponentially increase. Moreover, the authors detail the concept “selective cost recovery” to direct funds to increasing female enrollment and achieving universal primary schools in low-income countries. As we have discussed, investment in human capital is instrumental to increasing economic productivity and profitability. So, while the social benefits of education are more difficult to quantify than the social costs, the recent evidence that considers metrics such as reduced mortality rates should be highly considered. One question I wish the authors explored is whether high-income countries like the United States should prioritize shrinking the income inequality between high skilled and lower skilled workers domestically or direct more funds to achieving universal primary education in developing countries. It is frustrating that potential higher social costs in the short-term dissuade policy makers from considering the long-term spillover effects of increasing investment in female education and education in developing countries.
Toggle Commented Oct 22, 2020 on For Friday's Discussion at Jolly Green General
I found this paper extremely enlightening in the way that Duflo juxtaposed the causation of women's empowerment on economic development and vice versa. The element that fascinated me the most in this paper was that policies targeting towards increasing women's decision making are integral for economic development because of the immense amount of positive externalities they have. Allowing women to possess control over more resources and attain higher levels of education not only benefits the individual women, but increases the health and quality of life of their children, the efficiency of their households, and the economic pie of the developing country. Moreover, James Wolfensohn, former World Bank President, reiterates the broader societal outcomes that result from the "catalytic effect" of increasing educational attainment for girls, "This, in turn, will change the way societies will deal with problems and raise the quality of global decision-making." However, Wolfensohn seems to ignore the implicit bias seen in many developing countries towards female leaders and policy makers. I am familiar with Duflo's experiment where female and male actors recite an identical political speech, where the male's speech is largely preferred; however, not until this article did I think about the deeper issues associated with it. It begs that question, even if women achieve higher levels of education, higher paying jobs, and more political leadership, will the traditional gender biases that prevail in many developing countries inhibit women from making dramatic social, economic, and political change? I think the only way to find out is for these governments to pass legislation that will allow women to achieve greater mobility, and consequently ascertain political leadership positions, especially due to the piece of staggering evidence that Duflo reveals: "In places where no woman had ever been the local leader, 86 percent of parents wanted their daughters to be either a housewife or whatever their in-laws would decide for her (the corresponding fraction was below 1 percent for the boys). This exemplifies the need for female leadership to shatter the traditional stereotype that confines girls to homemaking. Although female empowerment is not the "magic bullet" that encompasses all the world's poverty issues, legislation that focuses on providing women in developing countries more educational opportunities will posses external effects that will benefit all of society.
Toggle Commented Oct 9, 2020 on Duflo for Friday at Jolly Green General
In this article, Epplin details the history of land grant institutions in terms of the economic pie. I was very intrigued by those who opposed Turner's plan due to the applicability of their thoughts to our class discussions regarding human behavior. The upperclass citizens who opposed the passing of this bill in order to maintain their socioeconomic status is very disheartening because it seems irrational to reject a bill that would create positive spillover effects by increasing educational opportunities and agricultural productivity. I cannot imagine the frustration of those in favor of the policy because as Epplin reveals "the level of investments in public agricultural education and research and extension institutions was less than the economically efficient level." On the other hand, the farmers opposed to the plan because they believed that "college would enable sons to avoid the practical work that they should be doing on the farm," reminded me of our risk versus reward discussion, in that lower-income families often do not have the luxury of investing in an uncertain reward when the potential risk could severely compromise their livelihood.
Toggle Commented Oct 2, 2020 on For Friday's Discussion at Jolly Green General
Furthermore, this article really resonated with me because the majority of my dad's family attended Texas A&M, and experienced firsthand the benefits of a public education focused on increased agricultural productivity. My dad is very fond of his Animal Science and Agricultural Economics courses that he took in college, which he applies to his work today in terms of using sustainable practices to increase land and cattle productivity. Not only do institutions like A&M provide a public education to students from all socioeconomic backgrounds, but they works to increase environmental sustainability, a pillar of the SDGs. I think this article was a very compelling in the way that it places the responsibility of higher level public education in the hands of the government and illustrates the two schools of thought on land grants for public universities.
Toggle Commented Oct 2, 2020 on For Friday's Discussion at Jolly Green General
While I appreciated the scientific analysis of The World Bank’s Executive Summary, I preferred the more optimistic perspective of John Quiggin. However, one aspect of The World Bank’s Executive Summary that captivated me was the section regarding local food security in the Caribbean. The Summary reveals that an increased water temperature in this coastal region will lead to ocean acidification and coral bleaching. These two consequences will not only lead to the harming of fish nurseries and the increase of marine life mortality but will decrease the local food availably and fishery employment opportunities. I found it very interesting how far reaching and multi-dimensional the effects of climate change are especially in regions that heavily rely on local resources for food and employment. On the other hand, I found Quiggin's repetitive references to an increased living standard very insightful. The fact that "our use of coal, gas and oil could be reduced by 90 per cent, even while living standards increase greatly" was astounding to me until he explained that our use of these resources hinges on engrained social standards and consumer preferences. In a sense, the majority of this piece offers renewable resource-oriented solutions that increase fuel-efficiency, lower greenhouse gas emissions, and increase the quality of life for both developed and developing countries. However, he reveals that "our beliefs, values and social institutions" are impeding the achievement for "a good life for all." While I understand the constraints that social institutions present towards increased sustainability, I wonder how "everyone could have a better life right now with less energy use, more leisure, and drastically lower emissions of greenhouse gases" without drastically transforming the social fabric and the infrastructure of developed countries. Moreover, Quiggin touches on solutions such as the mass transit, electric cars, and the conversion to wind and solar energy systems without considering the time, power, and resources necessary to essentially restructure the transportation and energy systems of developed countries. In addition, Quiggin continues to refer to his last essay that details "a society where people worked because they chose to rather than out of material necessity, a society in which working hours averaged 15 per week with no decline in quality of life." I am a bit confused on how this relates to sustainability and why a decrease in. productivity is considered a "utopia." Apart from this confusion, I thoroughly enjoyed reading Quiggin's article and found his inclusion of cultural and social institutions very interesting in the role they play in increasing sustainability.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
I really appreciated the organization of Seth's article because it clearly outlined the mechanisms by which General Park's military regime led to the rapid economic development of South Korea. I found Park's use of foreign aid from the United States and Japan to fund investments in education, a skilled labor force, HCI, and technological advancement very interesting. In particular, I found it captivating how the United States supplied South Korean firms, like Hyundai with lucrative contacts to complete construction projections in Vietnam to gain technological experience. I found this type of foreign investment very interesting as it diverges from forms of traditional direct aid that I am aware of. Another aspect of this article that I enjoyed was the discussion of the chaebols. Seth illustrates that the chaebols were family-run conglomerates tied by low inheritance taxes and marriage networks, which I thought was interesting in a traditional sense because it is not customary in the United States for familial ties to influence the economy. Likewise, Seth's depiction of the chaebols highlights an idealistic perfectly competitive market with no corruption, efficiency, and a diversity of activities. While I understand that the lack of social a welfare safety net and the bonus system encouraged high rates of savings and that the state increased prices it paid for agricultural produce, how were the farmers totally protected? With a major transformation in the social fabric of the country from a rural to an urban society, how did citizens avoid falling through the cracks? Moreover, even though South Korea joined the OECD in 1996, Seth highlights that the "quality of life had not reached the levels of developed countries," illustrating the importance of factors other than capital investment and technological advancement.
Toggle Commented Sep 18, 2020 on Miracle on the Han for Friday at Jolly Green General
I found Krugman’s explanation of the assets and limitations of economic models very captivating. I agree with Krugman that having formal models as a basis for economic studies is necessary to convey simplified stories, as Professor Casey calls them, that allow us to observe economic behavior. I found his inclusion of “Fultz’s dish-pan” analogy very insightful, highlighting that economic models simplify the complexities of the stories they are telling in a comprehensive way. Moreover, it is definitely crucial that we hold ourselves accountable to realize that models do not reflect a completely accurate reality, therefore we must not “sleepwalkers” and actively evaluate all of the consequences. Likewise, his clarification on the high development theory and the big push were very informative. This shed a light on poverty trapped countries, reminding me our reading from last Friday, “Institutional Barriers and World Income Disparities,” where many poor agrarian societies suffered from lack of access to enough capital to invest in advanced technologies for enrichment. The idea of a positive feedback loop leading to self-sustainment and growth is very fascinating, yet I wonder what government policies would instigate poverty trapped countries into a positive feedback loop, how these programs would be financed, and how long this would take?
Toggle Commented Sep 11, 2020 on Krugman for Friday at Jolly Green General
In his article, Sachs reveals that "the major goals of poverty reduction, biodiversity conservation, climate change mitigation, and primary health for all would need perhaps 2-3% of global income. That small amount, if properly invested, would be transformative." This quantitative evidence resonates with me because it illustrates the tremendous improvement that could result from a collaborative international effort to enhance the quality of human life. Moreover, I appreciate how detailed Sachs is in outlining the pathways towards sustainable development, in terms of global participation. However, I wonder if he is too optimistic in thinking that "governments, international institutions, private business, academia, and civil society" will share the same goals without asserting any self-interest. While I admire Sachs' comprehensive analysis of how to eradicate extreme poverty through the triple bottom line approach coupled with good governance, I wish he provided more concrete milestones and perhaps a more realistic perspective on the diplomatic end. In a sense, I wish he elaborated on how foreign governments would cooperate not only with each other but with the private sector with regards to resource allocation and funding projects towards technological advancements. Furthermore, I completely agree that it is integral to consider the adoption of new metrics to determine the well being of citizens, due to the one-dimensionality of traditional measurements of economic performance in order to increase social inclusion in developing nations. Therefore, it is crucial that shared goals and incremental milestones are established among participating institutions to ensure efficiency and feasibility of the Millennium Development Goals.
My biggest takeaway from this course definitely came from our discussions about the correlation of Poverty, Inequality, and Distribution of Income and Economics. While I was aware of the major discrepancies in the wealth distribution in America, articles we read like the New York Times piece "America Will Struggle After Coronavirus. These Charts Show Why," revealed the myriad of factors that contribute to structural inequalities and how COVID-19 has amplified them. As economists and politicians propose solutions to mitigate the suffering by the current pandemic, our discussion of tradeoffs, as one of the pillars of macroeconomics, has really stuck with me. Tradeoffs are embedded into every economic and political policy. Oftentimes the economic tradeoffs made by large profit maximizing companies disproportionately effect certain demographics. Professor Casey continuously showed us how to analyze the social impacts associated with economic theories and models. This was definitely the most meaningful part of the course to me and will definitely help me to be a better citizen. I learned that technological advancements, globalization, and education all influence socioeconomic mobility of the lower class, I learned to see which kind of policies would help shrink the wealth gap, and most importantly I learned how to evaluate economic scenarios from different perspectives.
Toggle Commented Apr 22, 2020 on ECON 100 Final Exam at Jolly Green General
I am a little confused about the discussion of debt scolds and "how high public debt feeds current consumption at the expense of investment for the future" in the Krugman article. I understand that if the GDP grows at a faster rate than the debt accumulates, the high levels of debt will ultimately melt. However, I am wondering how this correlates with current consumption? In the second article, I think the point about the racial hierarchy persisting after the Civil War due to the lack of socioeconomic restructuring programs was very insightful. Bouie reiterates throughout his piece that racism is still embedded in the political, social, and economic fabric of today, which raises the vulnerability of minority groups in the face of global pandemics, like COVID-19. I hope that the disproportionate effects of coronavirus on African Americans has raised awareness of the bigger issues of inequality that Bouie illustrates like the increased exposure of certain groups to polluted air, toxic waste, and overcrowded neighborhoods.
Toggle Commented Apr 20, 2020 on Econ 100: Last readings at Jolly Green General
When the components of aggregate expenditures are not constant, how does this effect the GDP equilibrium/ how does this change the Keynesian Cross graph?
First, similar to Patrick, I am wondering if there is a way for the United States to restructure our medical system to make treatments and drugs more accessible to lower-income individuals. Why doesn't America have a universal healthcare system like most advanced, industrialized countries? In addition, I thought that this fact was very interesting "the richest 0.1 percent now have the same combined net worth as the bottom 85 percent." Therefore, I am confused as to why state governments are making budget cuts in the higher education sector if college degrees seemingly increase the economic mobility of lower-income individuals, allow them to attain higher paying jobs, and help create a stable family life?
In the section about the causes of hyperinflation, Mankiw illustrates how most hyperinflations originate when the government is unable to borrow. With regard to our conversation on Friday about the government borrowing from the private sector, is seigniorage a likely solution for the government to turn to if the American public starts to view the government as a bad credit risk? And would this ultimately lead to higher taxes placed on the already suffering population in order to recover from the deficit?
Toggle Commented Apr 6, 2020 on ECON 100: New "Textbook" at Jolly Green General
First and foremost, I think it is unbelievable how many people this is affecting and that we have not even reached the impending climax of the epidemic. I understand how Krugman classifies the economy in the N sector and the E sector, but I was wondering if there is an in between and how relief will be measured. For example, my dad is in the energy business, which has been classified as an essential service, however he explained that because the transportation sector is among the largest petroleum consumers, specifically airline companies, and their demand for oil has extremely declined, that the price of oil has dropped nearly threefold per barrel. Consequently, companies like his have been forced to either sell their oil at a very low price to refineries or stop extracting it all together. In a sense, I am wondering how the government will address corporations in the E-sector that are not incurring their usual profits. In addition, I was wondering if you could clarify why Krugman asserts that "the government won't have to pay back the money it's borrowing, just return to a sustainable level of deficits (not zero) and let the debt/GDP ratio decline over time. I understand the GDP will recover with the "stimulus" and also the increase in spending when the recession ends, but why won't the government have to pay back the private sector? Thank you!
Toggle Commented Apr 3, 2020 on ECON 100: The Corona Coma at Jolly Green General
In this article, Yuval Noah Harari identified some very insightful arguments regarding the current global pandemic. Similar to Warren, the part that stuck out to me the most was the lack of communication and unity among the global leaders to establish a plan of action and confront the growing epidemic. As Harari points out, the key to stopping the virus from circulating is to constantly communicate on an international level about new treatments, allowing medical staff to travel between countries, and sharing medical supplies. Harari illustrates that this symbiotic cooperation will not only define future international relationships, but also the future of humankind on a broader scale. This was a very interesting contention that Harari posed because it manifested itself in almost every section of the article from enhanced surveillance systems to strengthening global solidarity. Every decision made in a local or global context will transform the social, political, and economic fabric of the future. For example, Harari explained how "many short-term emergency measures will become a fixture of life," such as the increased pervasiveness of surveillance systems. While I agree that using innovative technological tools would be beneficial to combat the spread of COVID-19, it it essential that the public be first informed on the disease from credible sources. With accurate information and tips for decreasing the spread of the virus, I believe that the population would be much more committed and motivated to stopping the spread without the government's intervention. However, fostering a relationship of trust between the government and the public is essential and without this collaboration, stopping the virus will be unforeseeable.
Toggle Commented Apr 3, 2020 on ECON 100 at Jolly Green General
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Apr 2, 2020