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Gus Wise
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When reading this paper, something that sticks out to me is how to different definitions and measurements of poverty can tell us different conclusions in research. Its interesting that the aid has a significant effect on reducing "poverty" when the "poverty" variable is measured by the multidimensional poverty index. When "poverty" is measured through income, we see that the effect of aid is not statistically significant. It was noted in the article that more people qualify as MPI poor than income poor using the headcount method. Does this have influence on the data? The larger number of people that fall under MPI poverty could allow for a greater representation of what aid can actually do to help reduce poverty. I am not sure empirically if this makes any difference, but it was a thought that I had. On a different note, it seems as though the components of the MPI (education, health, and living standards) could see a faster growth from aid than income would. In other words, in theory, if education and health are improved through aid, would income then slowly rise following those improvements? This echos the discussions that we have had in class on the causality/ correlation between human capital investment and economic growth.
Toggle Commented Nov 12, 2020 on Last Post of the Year at Jolly Green General
I thought this paper was interesting as it shows how markets in developing countries can be vulnerable to setbacks outside of their own control. I also liked how the paper broke up markets into different geographical areas. As we have learned in class, just because a strategy for development works in one country in one part of the world, it does not mean that it will work for a different country somewhere else. The article takes this into account as exchange rates very between countries with different forms of currency. Eichengreen and Mody examine the effects that changes in interest rates in the United States has on developing markets. Are there other industrial countries who could alter the developing markets due to shifts in their interest rates?
Toggle Commented Nov 5, 2020 on For Friday's Discussion at Jolly Green General
I find the concept of conditional cash transfers really interesting, and it’s crazy to think that they have only been around since the 90s. As the article explains, they have proven to be effective from evaluation in the short run, however, there has not been as much research in the long run, partially because there has not been much of a long run for evaluation. As Mexico has progressed since the implementation of CCTs, Parker and Vogl’s paper shows the benefits of CCTs in the long run, especially for the people whose family received a cash transfer during their primary schooling. Parker and Vogl’s work helps to prove the effectiveness of CCTs for the long run. Everyone sees benefits from programs like this. There are benefits to women, education, health, and development from this policy that support what we have learned in class. Other countries have implemented similar policies as a result of this. One thing that was mentioned in the paper was the idea of conditional versus unconditional cash transfers. I wonder how unconditional cash transfers would impact human capital in the long run. The authors cited that little research had been done on this form of anti-poverty policy as well
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
I have found our section on health, education, and human capital incredibly interesting as it shows how investments in people can be one of, if not, the best ways to increase development. The paper makes the point very clear by explaining the rates of return for education in throughout the world. With all of the positive research that has been done to show the importance of health and education in development, investment in these aspects of human capital is still largely neglected by the private sector. As we know from class and reading, this is because the private sector is not willing to pay the additional costs of education for people. We also know that there is positive social benefit that exceeds the private costs of investment in education. The paper notes that taking externality into account shows that the social rate of return for investment in education is incredibly high. The research shows that investments in health and education make everyone much better off, especially so in low- and middle-income countries. Yet, despite all of this the investment still is not enough. One thought that I have has to do with the education system of the United States. In development economics, to see how far along a country is in development, it is always compared to the US. Whether it is evaluating living standards or the value of a country’s currency in comparison to the US dollar; the US seems to be the model for other countries to follow. With regard to healthcare and education, the systems in the US have their flaws. I think that if the United States government were to put more investment into its own education system, other countries would follow as well, and development throughout the world would increase even more.
Toggle Commented Oct 22, 2020 on For Friday's Discussion at Jolly Green General
Duflo's paper is interesting as it brings up points on economic development and women's empowerment that I had not previously thought of. As we have learned in class, women in developing countries often have less education and rights than men in the country. We have seen from Sen and others that simply educating and empowering women will have a direct positive impact on the economy and development. Duflo agrees with this but points out that empowering women may come at the cost of men. This is an interesting point, and I would think that the act of empowering women through education and equal opportunity would bring benefits to all that would exceed the theorized cost/ detriment to men. It’s an interesting counterpoint that I am not completely sure about. On a different note, Duflo cites psychological studies that show implicit bias by both men and women on associating careers with a specific gender. Known as the “stereotype threat” the author discusses a study where they compared the scores on a math test between men and women after being told that women were worse at math/ would do no different than men on the test. It was interesting to see that women’s test scores changed based on what they were told beforehand and as the paper notes, the study suggests that this hinders gender equality. That particular study was from 1999, and I would think that there would be a change in that data today where the “stereotype threat” would play lesser role. All in all, I think Duflo’s article is interesting as it brings up new points on gender that I haven’t thought of before, but I think that more research should be done to see how her theories play out.
Toggle Commented Oct 8, 2020 on Duflo for Friday at Jolly Green General
Epplin’s talk focuses on the differences between proposing economic policy that would widely benefit people, and actually implementing it. Like others have said it is interesting and frustrating that economists prove theories that will make everyone better off, yet politicians still reject them. Setting aside land for public universities caused a significant increase in productivity on the farm as people were learning and getting better education. This was a government led initiative that still has effect as universities that were established with the help of land grants remain prevalent today. In America, we often think that our system is perfect and that we have solutions to our problems. From Epplin’s paper it is important to note that markets fail, and different factors cause markets to fail to maximize their productivity. Markets change and people need understand that policy that is effective one day might not be effective the next. Governments need to be mindful of this. The Morrill Land Grants are an example of government intervention to stimulate productivity of the markets, and they can be used as a model for developing countries as well. With development and the global economy that we currently live in, I think it is important for countries to help other countries with developing. I don’t know about the quality of universities in developing countries, but if countries with more advanced economies would provide aid to the largely agricultural, developing countries through land grants or education reform, everyone would be better off.
Toggle Commented Oct 1, 2020 on For Friday's Discussion at Jolly Green General
"The problem of stablizing the global climate is not 'can we?' but 'will we?'." I liked Quiggin's article and think that it gives a realistic account of the possible future impacts of climate change. Like Quiggin said, we cannot truly know what the future consequences will be, but we can make predictions. What will actually happen may be better or may be worse than what was predicted, we just don't know. Based on our global technology, we have the capability to make the changes necessary to reduce carbon emissions, it is more of a matter actually doing it. Quiggin's points remind of the proposed carbon tax that we have discussed the last couple days of class. Instituting a carbon tax in the U.S. and redistributing the revenue from that tax helps to reduce carbon emissions and income inequality in the country. We have this great policy proposal that will help to solve multiple problems, but will it be instituted? The solutions in the article do the same of tackling two problems at once. The real question is whether we will actually implement these policies. The article mentions how personal vehicles account for heavy carbon emissions in the United States, however, people. in the younger generation tend to move to cities and live in higher population density ares, where cars are not as necessary. This is an interesting point as I often associated large cities with pollution and environmental damage. It brings up the idea that there are more ways than one to reduce carbon emissions.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
Seeing how South Korea developed and made significant economic progress helps to give a real life example to the concepts that we have discussed in class. I found it interesting how the government cracked down on the corruption of the top earning business owners in the country. They then instituted plans to gain state control of credit through national banks. To spark growth in the business sector, the country offered low interest loans. This strategy along with vast social reform and foreign investment led to a high rate of development. Its interesting that this growth and reform started under a military government as we usually link economic development to democracies. One thing that was left out of the paper was the environmental effects of the development. During this time South Korea saw major urbanization as a result of the economic boom. I wonder how the growth of cities impacted the natural environment in the country. For example, the rates of air pollution could have raised significantly with the development. Obviously it is a great thing that South Korea was able to develop and fight the large scale poverty that existed in the country, but I think it would be interesting to see the environmental side of development as well.
Toggle Commented Sep 17, 2020 on Miracle on the Han for Friday at Jolly Green General
I liked Krugman's article, and thought that our recent class discussions have related well to it. Krugman points out that the development models created in the 1900s stemmed from mathematics and formulas more so than based on a methodology. From the articles that we have discussed in class, a common theme in discussion has been the idea that the models and solutions to development look great on paper but are questionably effective in real life. The question often arises: will this concept/model actually work? Krugman notes how the theories developed in the 1900s are great and smart ideas, but that they would run into trouble and criticism because of the difficulty of applying mathematics to them. With helping to promote development, there are so many different variables to take into account that it is difficult to even come up with an equation. I liked how Krugman says that it is ok to have thought concepts that aren't necessarily supported by definite formulas because I think that in instances of development, the formulas sometimes miss out on the real-life/human application. The math created effects real people who live their own lives, and while the math is helpful in understanding, it cannot solely be relied on to solve the worlds problems.
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
I enjoyed reading this paper and seeing the reasons for why countries have developed or lagged. Like Austin said, it is difficult to compare the economies of countries in different parts of the world because there are so many different variables to take into account. With that being said, countries that have experience growth have made strides for similar reasons such as transitioning into different types of exports and services. I thought the analysis of Brazil was very interesting because of the reasons for its development lag such as import substitution and corruption. Like the article said, Brazil has the largest national economy in Latin America, along with large, highly developed cities like Sao Paulo and Rio de Janeiro. It reminded me of Sachs' article on SDGs where over half of people with very low incomes live in countries that are capable of stimulating development on their own. I don't know the exact numbers associated with income disparity in Brazil, but looking at the very developed major cities and comparing them to the poorer areas around those cities and the rural areas of the Amazon, I would assume there is a substantial wage gap in Brazil. It's a shame that something like government corruption is hindering growth and development in a country that has the potential to help itself.
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
I agree that the SDGs are a positive continuation of the established MDGs as they provide more depth into how to achieve the basic global goals expressed in the MDGs. It is easy to say, “we want to end extreme poverty in the world” or “we are going to push for universal primary education”, but it is harder to implement and carry out real strategies to do this with full cooperation from all parties involved. The goals of the MDGs are broad, and the SDGs provide more concrete goals to achieve the same ideas as the MDGs. SDG 1 sets a numeric goal to help set up basic necessities for all people in the world. SDGs 2,3,4 call for action from governments to ensure basic human rights and development. I also liked how Sachs called for more participation from the private sector. In our global economy, companies and businesses have influence and power, so it is important that they do their part in pushing development as well. Sachs’ SDGs are a step in the right direction; however, they aren’t perfect either. As noted in the article, there is not a great way to enforce rules in this mission. To get countries and corporations across the world to commit to development, they have to be held accountable. I was troubled by Sachs’ comments about the people living in the lowest income-countries (p. 2208). He says that over half of the people with a low income are in middle-income countries that have the ability to develop on their own. But the other number of low-income people live in countries where, “small financial and technological transfers from high-income and middle-income countries can alleviate their plight.” While he notes that this is small population, it seems like these people are being neglected or left out still. If the idea is to eliminate all extreme world poverty, shouldn’t these people be kept in mind too?
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Aug 26, 2020