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Andrew Frailer
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I found this paper to be one of the most conceptually difficult from the class thus far. I returned to it several times and I think that I was able to pull out the most relevant information though. My understanding is that interest rates in developed industrialized countries, specifically the U.S. given the size of the economy, has a significant impact on foreign investment. The basic idea being that as interest rates in the U.S. fall, people are more likely to invest in other countries' debt in order to realize greater returns. I would imagine that there is some basic threshold above which many people would be unlikely to pull their funds from U.S. bonds, considering that this is a much safer investment than some other countries (Venezuela for example). I saw that much of the study was focused on this external approach, saying that the effects of policy reform can be part of the puzzle as the supplier. I imagine that domestic reform on the part of the developing country could be of crucial importance to securing foreign investment, given that better institutions and financial standings would decrease the risks associated with purchasing that countries bonds. One question that I had is what we should do when there are high interest rates in the United States or other major countries. If we are still worried about assisting in funds for development, then some outside, potentially NGO participation might be necessary in order to make up for the lack of funding. In a way, and this might be a reach, but it would be as if the aid would be a cure for market failure given that foreign investment is below its optimal point. I am looking forward to discussing this paper in class tomorrow, and hopefully we can clear up the parts of this paper which were especially confusing.
Toggle Commented Nov 5, 2020 on For Friday's Discussion at Jolly Green General
I found the study of this cash transfer program to shed a tremendous amount of light on how our theory of human capital investment works in practice. I am constantly reminded, as I am with many things in this class, that the issues we are dealing with are valuable in multiple ways. First, it is a useful investment to be made because the societal benefits outweigh the costs. Second, it is a necessary investment because we are talking about investing in the ability for people to have a basic level of freedom in their lives. Specifically when I think about the issue of investing in women, it is almost reassuring that the benefits to be derived from this investment are so glaring. I almost think that there is more hope that we will invest in women, given the unfortunate circumstances of a world in which men have historically been the main benefactors, since there is so much more to be gained. I also think, on the side of intrinsic value side, that the fact that all three aspects discussed in the paper are so clearly benefited, that hopefully these cash transfer programs will continuously be utilized as poverty alleviation methods. The last thing which I wanted to talk about was the idea of transferring these funds to the mothers of the households. I thought that this was a brilliant concept given what we have discussed and learned in this class. we have learned that women have preferences which will lead more to investment in their child's human capital investment. Especially as it pertains to nutrition. I was thinking of how in the India paper, we talked about how female policy makers identified clean water as one of their primary concerns. I wonder if thoughts like this, and what these mothers might invest their money in, would lead directly to the reduction of health ailments in their children, which as we have discussed, is sometimes a limiting factor in educational and labor force attainment.
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
The coolest thing to me about papers like this is that it should lead to very straightforward policy. Investing in education is a good investment for everybody. We talk a lot in class about why this is so difficult to do in America, but it just makes me so frustrated. The paper says that the developing countries see the largest returns to investing in education, but the United States could do so much better if we only had more informed decision making. The main thing I wanted to talk about was actually a concept discussed in professor Goldsmith's class. We talked about the American gender gap and how boys from lower SES families in America actually enter school at a much worse state than their sisters on average. Most of the research describes how cognitive, but also environmental aspects make this the case. It shows me how complex some of these issues can be. To me, overall, men are definitely in an advantaged position in society compared to women, so it makes sense both in a cost benefit and moral way why we should focus on women. I was mainly wondering if there was any way that we could reconcile these two things. If boys from low SES families (at least in the US) are starting better off, I wonder if this offsets some of the relative advantage of investing in women. Meaning that there seems to be substantial gains to be made in this realm as well. Thank you for allowing me to submit late.
Toggle Commented Oct 23, 2020 on For Friday's Discussion at Jolly Green General
Duflo's paper on the empowerment of women leads to some key insights on how we evaluate true development. When we talked about the MDGs and SDGs, one of my main takeaways was that in order for any of the goals to be achieved, all of them would have to be achieved. I think this shows us one of the most concrete examples of this. We can do all of the things which the models tell us to do in order to experience economic growth, but unless we have truly informed policy decisions, we will not be able to have true equality. A huge implication of this, as mentioned in the paper, is that women empowerment is a means and an end. it is an end because it is simply morally right thing to treat all equal, but it is a means because when women are not empowered, just think of all of the innovative brainpower and productive capability that we are missing out on as a society. Another one of the things that I thought as I was reading this was the terrible example set by the developed world, specifically the United States. It is easy for us to sit here and complain about how the developing world does not empower their women enough, but we having already developed (in one sense of the word) still are not doing enough to lead to equality. We are in 2020 and women still earn less than 80% of what men do for the same job. since the developed world has taken so much from the developing through exploitation or colonialism, we owe it to them to at least be a perfect example of what true equality looks like. One of the saddest things mentioned was the sex selective abortions in developing countries. This is the greatest violation of freedom in Sen's view (On a random side note which I am just now thinking of, would Sen object to all abortion since it is depriving life? or would the interpretation be different based on the circumstances). The problem here is that in the developing world, parents have to choose between, in some cases such as India, raising a daughter, who will not provide much in an economic way, yet still cost the poor family a tremendous amount in dowry, or just have a relatively cheap abortion. This for me highlighted how interconnected all of these issues were. How do we decrease sex selective abortion? well, we are going to have to, among other things, make the women future potential better. And how do we do this? by pursuing policy that promotes various rights to women. For me, as is one of the main conclusions of the paper, the importance of policy can not be understated. If we want to live in a world where we see equality and development of poor countries, we are going to have to have governments who take the lead with reforming policy targeted at women.
Toggle Commented Oct 9, 2020 on Duflo for Friday at Jolly Green General
This discussion I find to be especially interesting in relation to what we talked about last class in investing in better agricultural methods. In the United States, the interest of the founding fathers of providing for education is critical when looking at our development of human capital and the ability for that to lead to sustained economic growth. No doubt, the poor countries today who have a hard time ensuring that all kids attend lower school, and even still having effective education, probably have a ways to go before a college agricultural education will be established. I also thought that the discussion of how difficult the legislation was to pass was interesting. Today, we see that almost all policy proposals are met with high levels of gridlock. The same seems to have been true in the 1800s. It literally took the entire conservative party's succession from the Union to be able to pass this necessary legislation through congress. The idea of being "poor, but happy" is one that I find to be very unique in the contexts of this class. Generally, and I am certain that all would agree with me, poverty is thought of as the grinding turmoil described by the author. I think that this show an interesting idea that in America where people are relatively better off, farming is seen as a valuable way to sustain oneself, and an honorable pursuit. Therefore, by increasing education associated with agriculture, we enable people to continue to do what they want at a higher level. This contrasts todays developing world in that I sense a greater proportion are farming for subsistence alone, rather than being poor and happy. Lastly, I thought his idea of the way that economics are taught was interesting. I would have to agree that sometimes when Econ 100 ideas are brought up, I am slow to remember exactly what concept it is that you are talking about. The amount of ideas taught in this intro level course may cloud minds of students, and keep them from retaining the most important information regarding market failure and market success.
Toggle Commented Oct 1, 2020 on For Friday's Discussion at Jolly Green General
I am commenting on the first article in which the author discusses primarily how we can transform energy and infrastructure and allow the poor to do better at the same time. One of the things that struck me as most interesting was when he talked about the advantages of backwardness. It seems that we have finally found one advantage that the poor may have (although, it is not an advantage to them so much as it is to the world as a whole). They don't have to necessarily go through the carbon development path that other developed countries went through, they are developing during a time when environmentally friendlier technology is available. I thought that this piece was full of fascinating information about what is actually feasible now. The fact that we would be able to cut auto emmissions by so much, just by implimenting the rules that are already scheduled to take place, and substituting some of our personal driving with public transit. Surely we have a long road ahead of us, especially with a president who believes that climate change is a hoax created by the Chinese. It is going to take a joint effort led by the government, and consumers. This is one area where it is easy to see just how important policy and institutions are as far as sustainability and development are concerned
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
Krugman's paper explains one of the biggest issues that I have taken with economics since beginning the study of it 3 years ago. I constantly question how applicable something can be when it is based on silly assumptions. Krugman offers a simple explanation for this by saying that if everything had to be based on the full complexity of situations, then we would never have anything to go off of. I found his metaphor of the dish pan meteorological study to be particularly useful in helping me to resolve this bias. I thought that his idea of ignorance was very interesting, and very accurate. He says that as we gain more and more insight into something, then we develop this sense of feeling like our complex understanding must underlie anything which is valid. He uses the example of cartography here. As we gained better techniques, we began to ignore the information (though sometimes ridiculous information) by less reliable sources, and generated maps that would have benifited from these second hand insights. With economics we see the same thing, and it was this that really stuck out to me in the paper. As more and more complex economic models were developed in the mid 20th century, we began ignored those silly assumptions that would have actually generated a great deal of insights. in his conclusion, he poses the question of what if we would have been able to put aside the notion that everything must cocnform with our complex understanding? I think like im sure he does, that this is just the natural progression of things, especially when dealing with such a complex issue as development.
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
I found this paper to be a very interesting explanation about how some countries have been able to successfully maintain growth while others lag and fall behind. The first thing that stuck out to me is the relationship with the paper discussing MDGs and SDGs. In this paper, Sachs says that the achievement of any one of the goals depends on the achievement of all of the goals. I think that this paper illustrates how important government policy is to development. In all of the countries which experiences sustained growth, the governments adopted open policies and were export oriented. One specific example that illustrates this is the case of India. The author said that India initially lagged behind China in terms of growth because the Chinese government adopted open policies and encouraged technological development. India, on the other hand, began the research period under much tighter government control of the economy, which created harsh conditions for economic growth. After the government encouraged growth by switching to more of an export dominant strategy and relaxing regulation, the country quickly turned towards a position of growth. In the other countries, those that the author calls laggards or countries that are stuck, the governments have failed to make similar adjustments and the country's economies have paid the price for it. In Ghana, the author discusses how low R&D investment, particularly that carried out by enterprises, has served to exacerbate the effects of economies that suffer due to their reliance on imports which are attractive because they attract foreign investment. One thing that i found to be sad which shows how these studies are all related was the case of Botswana. Botswana is referred to as the African miracle due to its geographic location which is home to a huge supply of diamonds, contributing to a massive portion of GDP. Even though compared to other countries in the regions Botswana has experienced far more rapid growth, the economy is being depressed because of AIDS which effects 39% of 15-49 year olds. I am guessing that this is a combination of low medical innovation and information available to the public, as well as limited access to health care. However since I am not at all educated about the virus or the country of Botswana, I could be completely off. The last thing I wanted to mention briefly was the reoccurring theme that many of the fastest growing countries had connections with many larger more stable economies. Japans connection with several of the Asian countries was mentioned repeatedly, as well as Thailand's tech connection with the United States. I am sure that such a partnership will have many positive effects on a developing economies growth. Potentially one of these effects could be increased levels of foreign investment? All in all i thought this was a very interesting paper showing us one of the most important factors contributing to or limiting economic growth, institutional barriers.
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
Sachs begins this article by discussing the UN's earlier attempt at increasing global development at multiple levels with the MDGs, and goes on to discuss how this can be used as a guideline, through both its successes and failures, for leading to a more comprehensive solution in the SDGs. I found it interesting, but intelligent, that his focuses of the SDGs were so different, but also very interconnected. Particularly it stuck out to me that he said that the success of any one of the 4 facets of the plan required the success of all of them. I wanted to make note of the emphasis that he put on the private sector in being at the forefront of a comprehensive global development goal. Particularly because, as discussed in class on Wednesday, it doesn't seem like there would some sort of model that we could easily choose to show how compassion plays into economics. Sachs says that we need the private sector to avoid lobbying against legislation and progress that will lead to development. As somebody who has grown up in America, where it seems unlikely that the private sector would avoid such behavior, it is easy to see how this is a difficult and necessary goal. I also thought that in his explanation of the successes and weaknesses of the MDGs he made some interesting points. First, I think that many government or in this case global government documents have a tendency to be overly specific and convoluted. It was almost refreshing in a sense to hear somebody at that level say that we need to make the goals easier to understand and more accessible. I know that personally, i would be much more attentive on 8 bullet points rather than a 351 page document outlining all of the specifics in a UN document. Second, i thought his emphasis on milestones that must go in to the creation of the SDGs was almost an obvious aspect of any plan that could be successful in this regard. Specifically, I know that other global non-binding environmental agreements were constructed with milestones in mind, but even still, they lacked the enforcement mechanisms which could have potentially held countries to their promises (which makes it all the more interesting that he identified the non-binding nature of the MDGs as a positive). The last thing which I wanted to discuss was Sachs' general tone of optimism and realism. When he says that the goals discussed in the paper were realistic, I initially was very skeptical. For one thing, he says that it requires cooperation from governments all across the globe. Just thinking about the escalating tensions between the U.S. and China illustrates the complexity that will go into increasing cooperation among global governments. Hopefully countries like the two noted above will be able to put aside their immediate differences in order to increase the likelihood of attaining these obviously desirable goals. He says that technological expansion may be the key to solving the poverty problem around the world, and that it is up to all of the countries, not just the poor ones, to increase access and development within their own borders, with the stipulation that the upper and middle income countries giving assistance to the poorest countries. Overall I think that Sachs' goals are admirable, and his former position with the UN and specificity evident in the paper we just read makes me feel optimistic that the rising generation may be able to bring the much needed change to the globe. I am sorry that this is a bit late, the reading took me a bit longer than expected.
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Aug 27, 2020