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Austin Lee
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In this paper, Milovich talks about the different types of poverty as well as the United Nations’ Sustainable Development Goals (SDG). The main goal being to “End poverty in all its forms everywhere by 2030”. It is interesting to think about all of the different types of poverty that Milovich talks about through “multidimensional” poverty. When thinking of poverty you typically think of it monetarily. Milovich talks about how poverty is more than just a dollar figure but plays a hand in the well-being of people, education, health, and quality of life. What I question after reading through the paper is whether more focus on particular aid disbursement will have a larger effect on income poverty. Milovich primarily focuses on multidimensional poverty, as he did not see significant results of aid on income poverty. However, income poverty is still very much relevant and is still one of the most concerning factors if the world is to reach the SDG goals by 2030.
Toggle Commented Nov 12, 2020 on Last Post of the Year at Jolly Green General
It is interesting to see that when looking at interest-rate effects on the global market, past studies have not accounted for the supply and demand effects on bond issues and prices. I find this extremely interesting as one of the fundamental tools that you initially learn in economics is the relationship between supply and demand. In fact, in the conclusion of the paper, the authors say, “Textbook economics emphasizes the need to look at both blades of the supply-demand scissors. In the present context, this means looking not just at international investors’ appetite for developing-country debt but also the borrowers’ decision to supply these obligations (p. 23).” However, what I was most shocked about from the reading are the past studies that talk about the large effects industrial country interest rates have on emerging markets. When the economic outlook looked promising in the U.S., Japan, and Europe, interest rates and bond yields began to rise in these countries. This made it less attractive for emerging markets to take up these higher yields and interest rates. The paper says, “These events put a damper on capital flows to merging markets and, in the view of those who emphasize external factors, helped to precipitate the Asian crisis (p.7).” I had never thought about the prosperity of industrial countries’ effects on emerging and developing countries.
Toggle Commented Nov 6, 2020 on For Friday's Discussion at Jolly Green General
I do agree with the paper that conditional cash transfer programs such as Progresa are a good way to initially incentivize the youth to attend schooling and attain higher education. By providing conditional cash transfers, the attention is focused on the present. However, as income and wages go up over time for the youth that are receiving CCT’s, I would think that it may be worthwhile to increase educational quality in future generations; thus, reducing the diminishing marginal returns from education. Of course, a more in-depth look at the marginal costs and marginal benefits would need to be done in order to weigh whether additional investments in education will lead to further increases in income and wages. Also, it will be interesting to see how Progresa’s effect on the agricultural industry will affect the benefits of additional schooling, as Duflo mentions when cited in the paper. I hypothesize that an increase in educational attainment through the CCT programs will decrease the number of people in the agricultural industry and making it more beneficial to increase investment in not only educational attainment, but educational quality in the long-run.
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
The paper talks about the difference between human capital and the screening hypotheses and their returns to education. With the advancement in technology, many recruiting officers receive hundreds of applications which would take them forever to go through one by one. Many companies now have the technology to pinpoint keywords within a resume to sort out the candidates they deem “qualified” into one pile, and the non-qualified into another. It seems that because higher educational attainment has increased in America, the screening hypothesis seems more viable than it did just a couple of decades ago. The recruiters are looking for certain qualifications for applicants before they are even allowed to walk into the door for an interview. This naturally affects those applicants who may not have attended as notable of a college than the applicant sitting on their left or have not received higher education. However, this hypothesis does not touch on the intrinsic human capital (productivity) of the individual which the paper mentions is key for public policy.
Toggle Commented Oct 23, 2020 on For Friday's Discussion at Jolly Green General
One of the studies that Duflo talks about in the paper is the “stereotype threat”. In this experiment, the subjects were given male and female names. If they thought the name resembled a female’s name they would place the name in the right column. If the name resembled a male’s name it would be placed in the left column. They followed the same process for random words. The words that invoked a career or job were typically placed on the left-hand side (with the male names), and family-oriented words were placed on the right side (with the female names). This subconscious stereotype is prevalent in today’s society even in the U.S. A similar study was done with hiring managers of companies. If the name resembled an African American’s name, they were immediately taken off the list of suitable job applicants. Subconscious stereotypes similar to these two examples threaten full equality, whether that be gender equality or race equality. Moreover, it is interesting to see how Duflo’s paper will influences policy and if potential policy implications can bring a start to ending these “stereotype threats”.
Toggle Commented Oct 9, 2020 on Duflo for Friday at Jolly Green General
One point made towards the end of this paper is that most colleges are inefficiently teaching their students. The example he uses is with entry-level, principle economics courses. He says that most students who take that course test no better than an average person who has not taken the course. His argument is that there are too many ideas, concepts, theories that are thrown at the students for them to absorb most of the information. He proposes many arguments and the history behind land grant schools and providing more funding into agricultural education. However, I would be curious to know what he would suggest the agricultural schools teach in their entry-level classes. I wonder if the results would be similar to that of what he thinks of a principle economics course. Further, he argues that it would be economically efficient to reallocate funds towards agricultural education, but he uses basic economic theory to make an argument. His argument is rudimentary, as he repeats over and over again that the goal is to “increase the size of the economic pie”. However, I do appreciate the historic background he gives of land grants and the Morril Land Grant Act. It is interesting to think that as climate change and the negative human’s effects on planet earth are becoming more well-known, we may start to see this argument of increased funding for agricultural education revitalize.
Toggle Commented Oct 2, 2020 on For Friday's Discussion at Jolly Green General
At one point in this article, Quiggin criticizes the U.S. for being a consumption-oriented economy. This reminded me of a point made in Professor Goldsmith's Economics of Social Issues class. At one point in his life, he and his family lived in Australia. He talked about the much more leisure-oriented lifestyle the Australians lived than Americans. His co-workers would commonly take off work on Fridays to go surfing because "the weather was nice". At the time, it was jaw-dropping for Professor Goldsmith to even consider skipping work to go to the beach. However, to me, the article was eye-opening to consider that vast technological advancement does not need to be taken before carbon emissions are reduced significantly. To start, we can pivot from a consumption-oriented society to that of the Australians, living a more leisure-oriented lifestyle. Quiggin throws out a statistic saying that nearly half of car travel in developed countries is to get to work and shopping trips. By living a slightly more leisurely lifestyle, this number can be reduced even further.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
It is enlightening to see a success story of a developing country. Coming from one of the poorest countries per capita, being compared to modern-day Haiti, to a developed country is a story that has clearly been examined in great detail. Many of the steps South Korea had taken are steps that we have looked at in this class. For instance, starting with their First Five-Year Development Plan in 1962, the country had turned into a mostly imported country to light industry for exports. They also began to improve human capital, along with physical capital. We see South Korea as one of the success stories today, but it is interesting to note that one of the turning points of their growth, in my opinion, began with events that were not necessarily controlled for. Prior to the Korean War, three percent of landowners owned about 64 percent of the land. However, post-Korean War, the top six percent of landowners only owned 18 percent. This gave the opportunity to former peasants and landowners to move out of the countryside and redirect their attention to improving human capital and creating more entrepreneurs. I feel that this unexpected event gave South Korea an initial push it needed to redirect focus on human capital which led to higher innovations, increased exports, and the technocrats that studied abroad and went back to the country.
Toggle Commented Sep 16, 2020 on Miracle on the Han for Friday at Jolly Green General
I both agree with much of the author's viewpoint on building a model. In today’s world it seems that everyone is result-driven, so coming up with methodology as Hirschman did, without a formal model, is overlooked without a second thought. However, as the author makes note, just because the methodology is presented without a model does not mean it should be disregarded or that line of thought should be dead-ended. Perhaps the researcher can present their methodology and fellow economists can work on producing a model for the methodology. No one person has all the answers and if papers and research are passed upon because they do not have a formal model, then economics, in general, may be missing out on great ideas. Moreover, it is very interesting to see that in the high development theory, labor is the only resource that can fluctuate. Both human and physical capital is neglected. Looking at more recent history, I cannot wrap my mind around that idea considering today’s view of development economics. Improving education to increase human capital and increasing physical capital are two staples in modern development economics.
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
I really found this paper enlightening. From previous classes and having family in China that the Chinese economy has grown substantially over the past century, but never really dug into how it was made possible. One common theme I found between most of the fast-growing economies were the materials they were producing. In most cases these countries were able to get a jump start on manufacturing technology. Also, many of the Asian fast-growing economies were able to offer cheap labor. This incentivized foreign countries to take hand in these Asian countries. These two qualities for the Asian countries were very attractive to foreign investors and played a significant role in the economic boom they experienced. These characteristics are also something the authors make note of towards the end of the paper. The authors state, “There has been a lack of both export diversification and production sophistication (p. 275).” For this reason, many of the lag behind countries are still focused on agriculture. Of course, it is not fair nor realistic to compare the Asian countries to the African or Latin American countries due to different social infrastructure and environmental differences. However, it is worth making note of the successes of some of the Asian countries in order to reevaluate the structure of the lag behind countries. One of my main takeaways from this paper is that there are many factors that must be taken into account, but it seems that production diversification and sophistication are too many components that make your economy seem attractive. -Austin Lee
Toggle Commented Sep 2, 2020 on Reading for next Friday at Jolly Green General
I have to agree with with some of what Mercer said. I believe it is a big generalization when Sach’s says “And of course we need good governance for this to happen”. Something I learned in Professor Strong’s Global Politics class is that not all countries, societies can be successful based off of a singular governmental structure. There are many factors that play into what a country needs in order to prosper. This is no difference for the SDG or the prior MDG. Although the MDG mainly focused for poor countries, a singular plan bundling all the targeted poor countries will yield failed results. There are so many different factors that should be acknowledged such as cultural and environmental differences that need to be specialized when making a plan for each individual country. Although a guideline is great for starting the process of helping these countries, I believe taking some of the initial goals of the MDG should be instituted in the SDG. For example, having a “rich country” help a “poor country” may be effective. Having assistance and guidance, and also the attention of the rich country on a singular or a few poor countries may be beneficial to the growth of the poorer countries. I also believe the specialization for poorer countries is important to understand what is sustainable. For example, something Sach's mentions is the increasingly acidic ocean. Smaller villages off the coast of the Phillippines are heavily reliant on the ocean in order to free dive. They make most of their living off of selling what they catch in the fish markets. However, with the acidity levels rising in the ocean, the coral reefs are being affected along with the fish populations in the area. This is something that may not be touched on or noticed if a bunch of these poorer countries are generalized when making a sustainable plan.
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Aug 27, 2020