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Jack Parham
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I found this article to be incredibly convincing. Milovich does a fantastic job in walking through all of the ways in which the article may suffer from bias and has a variety of robustness checks that allow the reader to conclude that we are indeed looking at a causal relationship. This is certainly not an easy task. I had never truly considered the research limitations that the reverse causality between poverty and aid can cause. I found that this paper reinforced the relationship between development and poverty that we have already discussed in detail in this class. Mainly that economies need to grow to alleviate poverty, but growth alone does not cause poverty to go away. Multi-dimensional poverty that takes into account far more than mere income levels is a much better measure of how poverty is changing within a country. I found Milovich’s conclusion to be incredibly strong. The fact that an increase of 1% aid could lead to lower percentages of people deprived in education health and living standards by 0.82%, 0.36% and 0.64% respectively is truly astounding. The spillover effects of aid here become very clear. In general, I wonder how increases in education, health, and living standards continue through generations. One would hope that policies that give large amounts of aid do not end with the current generation. How do we ensure that future generations receive the benefits of those before them? This is perhaps a question revolving more around the politics of the country that is receiving aid than the country that is giving aid but I find it to be interesting nonetheless.
Toggle Commented Nov 12, 2020 on Last Post of the Year at Jolly Green General
As many have already pointed out this was a difficult paper to understand fully and I do not believe that I have a great understanding of the underlying empirical research and study design. With that being said I found it incredibly useful in describing how globalization and interwoven markets have really begun to affect the world around us. I think often times we still conceive of financial markets as being contained within a country's borders rather than on a global scale. It becomes clear in an article such as this one that "country" specific markets do affect other countries in a sort of butterfly effect way. Tracking how US interest rates affect borrowing in developing countries is certainly an interesting phenomenon that we ought to study in great depth. Reading this paper and seeing the impact that interest rates have on other countries really sparked my interest in how the FED operates. The FED consistently maintaining interest rates has led to steady growth in the United States that you simply do not see when monetary policy is not controlled properly. Here, it is natural to think of the extreme cases where monetary policy has either been ignored or manipulated. All of the sudden you can end up with countries such as Venezuala who have experienced hyper-inflation to such a degree that foreign investment is nearly nonexistent. I have attached a link to a graph looking at the Venezualan inflation rate from 1984-2020 it is truly astounding and I would love to talk about it more in class and the implications of hyper-inflation.
Toggle Commented Nov 6, 2020 on For Friday's Discussion at Jolly Green General
This paper strongly affirmed much of what we have been learning in this class so far. Most importantly that development alone does not alleviate poverty. Policies such as CCT’s can be used effectively in developed and developing countries to both aid the current generation and make it so the next generation of individuals are able to thrive. I think this specific element of CCT policy is important. Politically, it is difficult to rationalize spending particularly if the benefits of that spending are not realized. Here, it became clear that CCT’s really do provide lasting intergenerational benefits far beyond the scope of the cost of those policies. I found the differences in outcomes between males and females to be interesting particularly as we have discussed this potential gender difference before. Regardless, the evidence was overwhelmingly positive. When reading this I was thinking largely about unemployment and unemployment benefits in the United States. Often, it is argued that these benefits, particularly if they are cash transfers, will not be used productively. Many simply do not believe in cash transfers in an effort to alleviate poverty. While this study does not address whether or not cash transfers should be conditional, I think it is important to think about why this may be more politically possible. Conditional transfers necessarily invoke an idea that “work” of some sort must be completed in order to receive a benefit. Perhaps psychologically this idea makes it easier for those who oppose large unemployment benefits or safety nets to allow the government to spend more on these programs. When payment is conditional, regardless of what that condition is, I would argue that politically it is more difficult to argue against. Going forward, I would be interested to see how politicians in both the United States and other countries use the information in this paper and adopt it in different ways. Intergenerational benefits are incredibly promising and ought not to be underestimated.
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
In reading this paper I continually thought about the ways in which the United States fails to invest in the education of its citizens. The more we continue to read about the returns to education it becomes very clear that we are underinvesting in our youth. With an incredibly important election coming up, I have been looking at how different candidates, both state and presidential, think about development in the United States. In my research before casting my vote, I found out that John Hickenlooper, a democrat and former mayor and governor of Colorado who is running for Senate has carefully thought out this exact question regarding education. His plan is to support the Child Care for Working Families act that would work to provide universal access to preschool for 3 and 4 year olds in the state of Colorado. After reading continually about the lasting effects and high returns to investment in education, I wonder just how lucrative a universal preschool could be for a state. Maybe this is a policy that bears a much lower cost but has equally as high returns as far as social benefits. Additionally, when taking into consideration the screening hypotheses, as we continue to make education more universal, companies will not as easily be able to distinguish candidates without looking directly into who they are as a person and their genuine abilities as a potential employee.
Toggle Commented Oct 23, 2020 on For Friday's Discussion at Jolly Green General
Duflo does a fantastic job looking at how development and women’s empowerment can help produce gender equality in all aspects of life. I enjoyed how Duflo was skeptical of both of these phenomena. In the end, we see that neither pure economic development nor a drastic change towards women’s rights will completely solve the issue of gender equality. What we need is careful, continuous contemplation of policies for many years to come. In reading the paper I found that Duflo successfully described the ways in which economic development compounds into gender equality. One of the statistics that stuck out to me had to do with life expectancy. There was an estimate that, “every year of increase in life expectancy leads to an increase in years of education of girls (relative to boys) of 0.11 of a year. This creates two ways for economic development to potentially improve the relative welfare of women: by reducing the chance that they die at each childbirth, and because economic development goes hand in hand with a reduction in fertility.” This was one example that really stood out to me. Development means compounding benefits for women. This circle of virtuous development is certainly something to promote. However, Duflo makes it clear that development is not the final answer to the equation. I think this is a point that is not made often enough. Especially in a developed country such as the United States, we must recognize that there is still so much work to be done towards gender equality. Pure economic development is not and will never be enough. Policy that is created by and benefits women is necessary in facilitating gender equality.
Toggle Commented Oct 9, 2020 on Duflo for Friday at Jolly Green General
Epplin's paper successfully details how public goods are provided. Specifically, Epplin looks at the history of land grant institutions as a means to discuss how the future of education and economics may change. Epplin starts by detailing how public education came to fruition in the United States. It was heavily agreed upon at the time of signing the declaration of independence that a focus on future knowledge would be necessary to good government. Not only would knowledge aid good government but it would allow mankind to achieve in ways that foster greater happiness and satisfaction in life. At this time, education was thought of not as a public good or a place where markets have failed. Instead, the founders recognized that resource allocation is incredibly important. It was common sense to publicly fund education for all. Land grant institutions in particular faced more push back. Those who opposed land grants did so on the basis that they were both a waste of money as well as another way that abolitionist movements would "win". Today, multiple studies continue to find that not enough resources have been allocated to agricultural education. But how do we educate the public on these ideas of market failure and misallocation of public resources? How do you ensure that the citizens of our country understand that government intervention and spending can make everyone better off? Epplin finishes the paper by pointing out how principles of economic classes may have been failing to make this very point. Often, students learn only how markets are successful. If they do not encounter how markets fail, we may be creating a bigger problem than we are solving. In reading this paper I thought back to Wednesday's class where we ultimately determined that Economists are rarely listened to by the public. This is a clear cut example where all economic research has determined what policy ought to be enacted yet no one has done so. If everyone could be better off by investing more in agricultural research and education then why do we not make that a priority? It seems that political influence and policy often clouds the judgement of those who do not understand market failures in the first place. I find this a difficult, if not impossible, problem to combat.
Toggle Commented Oct 1, 2020 on For Friday's Discussion at Jolly Green General
I found Quiggin's essay to really hit a lot of key elements that we have been discussing this week regarding sustainability, climate change, and poverty. Quiggin writes from the perspective that the barrier to sustainability is not technology or environmental but rather barriers to sustainability are found in our beliefs, values, and our social institutions. He illustrates this in a number of ways. Quiggin cites how something as simple as a policy mandating minimum miles per gallon for new cars would cause huge reductions (between 20-40%) in the current level of fuel needed. I think what is most important about this fact and this argument is that the technology already exists. Car manufacturers would have to devote more time and energy into ensuring that minimum mpg regulations were met but this is certainly a feasible goal, all it requires is accurate and demanding policy. Another way in which this is illustrated is through food. Quiggin argues that there are actually no resource constraints that would prevent a world population of 10 billion from eating well and sustainably. Food production is not the problem. Rather, we must simply ensure that the world population receives the benefits from increased food production. This article was certainly a refreshing read. It was perhaps the most hopeful essay in terms of the globes future that I can remember reading. It reminded me a lot about the conversation in class regarding the climate clock that was put up in New York City. I agree that change must be made and it must be made quickly. But I for one was certainly more motivated from this article that spells out potential policy changes that are feasible today than from a clock that seems to count down to the end of the world. We should certainly feel motivated and obligated to do something but we shouldn't feel helpless.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
I found the history of South Korea's economic development and rapid growth to be one that was filled both with controversy as well as demonstrated lessons for growth that we have already learned about in class. I think a lot of people see South Korea today and do not understand or appreciate the long and tedious history of growth that the country has gone through. Some of the numbers in this paper were absolutely astounding. I found the focus on increasing education in South Korea to be especially impressive. In the paper it cites that from 1945-1960 primary school enrollment tripled, secondary enrollment increased 8x and higher education increased 10x. I think this is an incredible statistic that is backed by deliberate political action. This reminded me about the ideas of growth we were talking about on Monday in class. Perhaps the focus on things like education and health (another aspect where South Korea greatly improved) are actually more important than other institutional factors. Further, I found that the authoritarian manner in which many of the policies were carried out was in fact incredibly productive. For instance, the performance principle that was used to keep big business in check is one of the most direct ways in which I've seen a government enforce economic targets. I think when most people think about economic development they rarely consider authoritarian processes. The biggest thing I took away from the paper is that economic growth certainly can be attained in new and different ways depending heavily on society.
Toggle Commented Sep 17, 2020 on Miracle on the Han for Friday at Jolly Green General
I really enjoyed this piece by Krugman. Not only did it read easily but it presented ideas that I had not considered in much depth before this. Specifically, I enjoyed how Krugman dealt with the idea of formal models. Personally, this has been a big point of contention for me with economics. I have never been one to believe a model in its entirety without first completely understanding the limitations and the assumptions of that model. Yet, at the same time I cannot deny Krugman’s assertation that models are the basis of all rational and helpful thought. However, I found that Krugman failed to stress the shaky support on which models stand. Models are meant to be adapted, to be proven wrong and to be changed as we learn more and are better able to represent the world around us. Of course, a model is a fantastic starting place, at the same time, a model should be constantly tested and overthrown if found to be incapable of accurately explaining the world around us. Often, I find that when mathematical modelling is stressed in economics, there is an implication that no fault can be found. Even with exhaustive regression analysis, we must admit that economics is not a perfect science. Fault is found everywhere and anywhere, and we must be careful to draw conclusions. I think Krugman did not stress this point enough and may have a little too much faith in mathematics and modelling. He does admit that he himself should, “not to let important ideas slip by just because they haven't been formulated your way.” I think this is the most important point of the entire paper. Using rich insights from other areas of research and the world around us will certainly help us re-evaluate our economic models that seem cemented into textbooks but may not actually be accurate.
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
Similar to Eric, I could not help but think about the Sustainable Development Goals and the questions that have been raised such as "what is good governance?". While reading the SDGs I was constantly wondering what exactly good governance means economically and what kind of policies would need to be put in place in order for economic development to occur. This paper begins to answer many of those questions. We see very clearly that institutional barriers such as extreme protectionism, corruption and financial instability have made it incredibly difficult for some countries to develop and grow efficiently and effectively. However, avoiding these institutional barriers is far easier said than done. I think foreign policy often focusses on how monetary aid can help to grow and develop other countries. What is not often considered but should be is the mindset of the institutions in question. How is the government of that country going to change their policy in order to develop?
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
In the paper Sachs does an excellent job of explaining and rationalizing why the SDGs ought to be put in place. I think you would be hard pressed to find someone that wouldn't want to live in a world where the goals of the SDGs have been achieved. The world with completed SDGs would hands down be a better place. However, in reading the paper I found myself constantly wondering "how?". Not only do the SDG's seem a bit unattainable, as other's have mentioned, but Sachs fails to demonstrate exactly how a diverse global population such as ours would even begin to work together. One of the clearest examples of Sachs glossing over the fundamental and procedural issues of the SDGs is when he mentions that "politics, planning, and complex decision making by many stakeholders will be unavoidable." This is quite an understatement. I think a global pandemic is perfect evidence of the current lack of global participation, cooperation, and dedication to a single cause that would be necessary in order to truly attain these lofty goals. While Sachs does mention that certain years and checkpoints ought to be put in place, he does not mention when or how. Without incentives, motivation to achieve a goal is unlikely. You see this lack of motivation from private companies constantly in terms of climate change. It is rare to see a company make a climate sustainable change to their operation especially if that change is going to cost a lot of money. Often, policies such as emissions taxes are what ultimately force the hand of the private company into making sustainable choices. While Sachs does make a good point about the long and difficult process of forming a legally binding contract I still think that without a legal incentive you will be waiting a long time before any action truly takes place.
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Aug 27, 2020