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Ella Hall
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I am interested in learning about which way the microcredit space has gone since this paper. The paper notes that many of the social impacts many had thought the microcredit programs would have improved, like women’s empowerment, investments in education, or use of healthcare services, have not improved. However, the paper also noted that the purpose of microcredit loans is for businesses to be created, and there is evidence that businesses are being created. I am wondering if there have been any advancements in trying to target or change the microcredit programs to target social impacts like education or women’s empowerment, or if people have continued to emphasize the true purpose of the loans, creating businesses, being enough of a positive impact.
Throughout the beginning of this paper, I found myself questioning if the issue is not as binary as it was presented. I thought that it must be necessary for there to be some level of alignment between the conditions in the borrowing country and the external interest rates in order for foreign investment to take place at a large scale. This paper suggests, to my understanding which I admit might be limited, that the overwhelming explanation is that of interest rates and that the evidence that focuses on means of privatization, liberalization, and stabilization are missing some of the patterns that can be found if the data is broken up into floating- and fixed- rate and differences in region. The debate surrounding the explanation for foreign lending made me think about our previous discussion about the Washington Consensus. The Washington Consensus emphasized the importance of trade liberalization, the importance of a balanced budget, and other aspects that essentially put the responsibility on the borrowing country to have optimal conditions for further development. However, just as evidenced in this article, the real-world examples do not always follow this pattern. This is particularly obvious in the differences between Latin American and Asian countries which we have spoken about earlier and are used as examples in this paper. I think, similar to my own thinking while reading the paper, it is reasonable to expect liberalization of markets and other mechanisms to be an important part of the foreign lending puzzle, but empirically this does not seem to be the case.
Toggle Commented Nov 18, 2021 on ... at Jolly Green General
One thing that stuck out to me from this reading was their inclusion of the opportunity costs associated with sending children to school as a part of their discussion. We have discussed the opportunity costs in class in terms of the need for the children to be working as insurance for the family and the adults’ future. The paper pointed out that there are also forgone earnings for the individual choosing to embark on their education and extra fees that incur from doing so. Of course, there are long-term earnings that can be gained from attending primary or higher-level education, but those can be harder to see or prioritize when there are more pressing, immediate needs for financial security or income. This concept, I think, is similar to some of the challenges surrounding sustainable products. Most sustainable products have a higher price tag, but over their lifetime can save the consumer significant amounts of money. However, overcoming that initial barrier to entry of the high upfront cost can be difficult, and sometimes people cannot save the money needed to buy in a sustainable alternative, even if they know long-term it will be financially beneficial. They need a good now and can afford the disposable, cheaper, traditional option. I think this is really important to remember when discussing education as well. Just because families know that education will result in long-term financial gains, does not mean they have the ability to send their children to school. I think keeping this in mind, it becomes obvious that you cannot just look at the evidence presented in this paper and push families to send their children to school, but there has to be investments made elsewhere, like in safety nets or subsidies or higher wages, to make the barriers of entry less burdensome.
Toggle Commented Nov 11, 2021 on For Friday's Discussion at Jolly Green General
The reading discusses the importance of women having political influence in order for policy decisions to reflect the preferences of and to benefit women in the community. One way that some countries ensure that women are a part of the decision-making process is by having reserved seats in office that have to be filled by women. This is a good policy because it ensures that women have a voice in policy decisions, and evidence presented in the paper show that the types of projects women chose to fund and policies they support are different than those chosen by men. However, I am curious about the social implications if the political race for the seats held by women and those held by men become separate. I wonder if by having a female race and a male race, it is reinforcing the idea that women cannot compete against men politically and gives the impression that a separate race and these designated seats needed to be created to give women a chance. I do not know if there is any evidence to show that this stigma would occur, but it is an unintended consequence I think could occur. It also could be argued that it still might be worth it. Even if some people think women needed their own, inferior race the reserved seats still ensures women have an influence on policy decisions which is most important and could likely lead to changes in social stigma as well.
Toggle Commented Oct 28, 2021 on For Friday's Discussion at Jolly Green General
This reading got me thinking about two things. The first was the issue of coping solutions. Coping solutions to environmental problems is such a complicated idea, in my opinion, because you do not want coping solutions to be the goal or the only means of climate change policy or innovation taking place, but in some instances, they are a very necessary option. The damage that has already been done needs to be repaired, and in some areas has to be repaired to sustain life. However, in other situations, it would be nearly impossible to fully recover from the damage climate change has already caused. I also do not think that focusing solely on technology and policy meant to cope with climate change is the right way to be addressing the problem. Prevention is ideal, but inevitably coping will be required as well. The second thought sparked by this paper, and particularly the discussion around the Middle East and North African region’s import dependency, was how massive the impact of climate change felt globally will be. We discuss climate change as an obviously global problem, as each country’s actions affect everyone else, for example by impacting air quality, leading to rising sea levels, or impacting our oceans. However, one aspect I do not give enough thought to is how rising sea levels, deteriorating air quality, or lack of clean water in a region that, for example, provides agricultural products to the international market will impact their ability to supply these products. The world is interconnected, not only sharing the same environment, but also through widely shared markets and climate change will negatively impact these as well.
Toggle Commented Oct 21, 2021 on For Friday's Discussion at Jolly Green General
I found South Korea’s emphasis on saving, and how they went about achieving an increased savings rate, particularly interesting. In one section of the reading, it notes that savings were increased by the lack of a safety net that would have been created by government welfare programs and the use of bonuses designated specifically for saving. The government also restricted foreign travel and priced luxury goods extremely high to motivate people to save their money rather than spending it on these experiences or high-priced goods. While this restrictive control would not translate to a more democratic nation, they proved effective. Not having a safety net is something I typically would not support but, in this case, it would definitely motivate individuals to save in order to create their own personal safety net. Further, I would not have thought about restricting travel as the best way to increase savings, but it makes sense that if people aren’t allowed to spend their money on travel they would have more to save and would likely be putting it back into the South Korean economy. We have discussed in many classes the importance of savings to increase investments and capital, and I thought the ways South Korea went about it were surprising yet definitely achieved their goals.
I found the similarities between countries experiencing similar rates of growth. One similarity I noticed within the fast-growing economies I found particularly interesting was some of the countries’ connections with other developed economies. For example, South Korea had a close connection with Japan. South Korea mirrored the business structure of Japan, and even required students to study Japanese. The article also notes that South Korea benefitted from international lending as a means of recovery after the Asian financial crisis. Similarly, Taiwan was influenced by the United States and the investment of US firms in the IT sector of Taiwan’s economy. These countries were interesting because it appears they relied on another specific country, which helped their economic growth. However, other countries, like China for example, benefitted from opening their economy up to international trade. While China did not have this sort of mentorship relationship with another country, they benefitted greatly from interacting with other countries through trade. This makes sense considering our previous discussions about the importance of a large market to sell the goods the country is producing. The importance of having a relationship, whatever that might mean for a particular country, with other nations is obviously important for fostering fast-paced economic growth.
Toggle Commented Sep 30, 2021 on For Friday's Discussion at Jolly Green General
What stood out to me most in this reading was the discussion around the importance of using models despite the possibility of blind spots. Hirschman, Marshall, and their high development economist colleagues framed their decision to not include models within their findings as an intentional choice to not oversimplify a complex issue. In other classes, we have discussed how in a business setting not getting too caught up in the aspects of the business that can be quantified and including qualitative aspects that are equally important can help the business avoid overlooking something. Krugman’s emphasis on the importance of modeling in economics first brought my thoughts back to these conversations. Of course, then, he pointed out exactly what I was thinking by acknowledging that some might question if this would cause blind spots. I think the point that Krugman is trying to make to people who have the same thought as I did is that models are supposed to be simple. They are supposed to create a narrow framework for understanding the phenomenon taking place that can then be expanded as the limitations are overcome. The concern should not be does modeling oversimplify the issue, but rather how can we work to overcome limitations in the modeling to create an even better model. I do think models offer a meaningful way of understanding economics, as difficult as some might be to understand. But looking at them as a simplified version to facilitate understanding, rather than full explanations of every aspect of an issue, as Krugman explains, makes them appear even more useful in my opinion.
Toggle Commented Sep 22, 2021 on Krugman for Friday at Jolly Green General
The paper touched on population growth as a threat to achieving sustainable development goals. While large populations obviously put strain on food supply and put greater pressures on the environment through high levels of pollution, depletion of land, etc. the problem is complex. Population growth and poverty, I think, present a chicken and the egg problem. Population growth does contribute to poverty, however, poverty can also lead to a need for large family sizes. Reducing fertility, through birth control or family planning education for example, is often cited as a way to fight poverty. In the article for today it says, “households in high-fertility settings should be empowered to adopt rapid and voluntary reductions of fertility.” What about when, as we discussed in class on Wednesday, children are used as a form of necessary life insurance? Or when a household needs a large family in order to support itself in an area with no established markets? Poverty can lead people to need a large family. So, while population growth and poverty often go hand in hand, I do not think it is a simple cause and effect situation. Family planning and access to birth control will provide opportunities for “rapid and voluntary” fertility reductions, but that might not mean their choice will be to do so. Maybe addressing women’s access to education, establishing secure markets, and improving access to health care to address childhood mortality rates could have an equally important effect. In my opinion, the Sach’s article only scratched the surface of this conversation of population growth’s role in achieving development goals. Some might feel that population growth is not to blame as a cause of poverty but is just a characteristic of poverty. Should population growth be a focus of actions geared towards reducing poverty or should the focus be placed elsewhere? I would love to hear what others think about this.
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Sep 16, 2021