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Frances McIntosh
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This paper, like others we have read this semester, emphasizes that there is there isn't a recipe for development, there is not a single solution that works everywhere. In some cases aid helps in reducing poverty, in some cases It doesn't... "It depends". This paper is very technical compared to other papers we have read, and there is an interesting technical question when trying to claim causality. Does more aid reduce poverty or does poverty just attract more aid? This reverse causality is an endogeneity problem that they overcome using instrumental variables. In regression analysis, Milovich uses the Multidimensional poverty index as the measure of poverty, where in most studies we've read they measure poverty in terms of ones income. The study concludes that Aid does indeed reduce poverty- in terms of MPI (living standards and health) Milovich establishes causality with results that are statistically significant. However, aid might not reduce poverty in terms of improving income. This suggests studies should be measuring poverty differently. We discussed poverty earlier in the semester and concluded that being poor goes beyond the amount of money you make, and this study follows that line of thinking. Outside of one's income, standard of living, health, and education matter when discussing poverty. Overall this paper is very convincing and ties together a lot of discussions from earlier in the semester
Toggle Commented Nov 13, 2020 on Last Post of the Year at Jolly Green General
I, like many others, felt that this paper was very difficult to comprehend, even reading through it a few times. From what I understood, the paper strives to show the effects of a country’s interest rates on emerging market spreads through international capital flows. They propose two possible scenarios for foreign finance and emerging markets. The first scenario is that the price and availability of foreign finance depend largely on conditions in the capital-importing countries, then the borrowers regulate inflows. The second scenario is that the price and availability of funds depends heavily on external financial conditions, and emerging markets will either be inundated by and starved of foreign capital. I was also confused by some of the theories behind their regression analysis, but they ultimately find higher U.S. rates have a negative effect on the demand by international investors for fixed-rate issues by Latin American borrowers. The authors also decide the full supply and demand model has been overlooked by previous research. This oversight is possibly why previous studies have not found the interest-rate effect on emerging market spreads. This paper is very interesting because it made me contemplate the interconnectedness of financial market. Obviously this is not a new concept, but it definitely highlighted the importance on interconnectedness in my mind and also emphasized the complexity of the concept. Hopefully we will get a better understanding of the paper after discussing it in class.
Toggle Commented Nov 5, 2020 on For Friday's Discussion at Jolly Green General
Conditional Cash Transfers contribute to our recent class discussions about investments in human capital. CCTs incentivize low income families to invest in their children's education. The changes in the educational attainment have to the potential to then change the labor market structure of a country. I agree with the paper that these CCT programs like Progresa are great ways to invest in low income families and help poverty issues. I also found it interesting that these programs seem to work in both developing and already developed countries. In past classes we have warned against trying to find "one-size fits all" solutions to problems. In this case it seems that the Conditional Cash Transfers are very versatile in the environments in which they work. One quote that caused me to pause was "program rules allow students to fail each grade once, but if a student repeats a grade twice, the schooling benefits are discontinued permanently". I think this is a bit harsh, and like Mason mentioned, what if a family experienced a tragedy or a natural disaster and their circumstances changed drastically. The situation could be resolved in a few years, but what if in that time a child happened to fail a grade twice? The family's benefits for this child would be gone forever for something that was beyond their control. Although, this rule keeps families from taking advantage of the CCT system I think that it has the possibility to exclude families that actually want to benefit from the program. CCTs also show how investments in human capital have multigenerational impacts. I think that is more incentive for parents to participate in these programs, knowing that the effects their investments will last instead of potentially being temporary. Its interesting how to CCT has differing impacts among gender. In my blog last week, I noted that the gap in returns for educational investment between girls and boys is increasing. I think this relates to how the positive effects of CCTs are greater in females than in males.
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
This paper delves into the discussion of both the private and public returns on education investments. We have mentioned in class that the returns of education for females exceed that of males. Something interesting in the paper that I don’t think we have mentioned before is that the gap in returns between males and females is widening. I wonder why the gap is increasing? I also found it interesting that returns to the academic secondary school track are higher than the vocational track. A lot of people from my hometown do not attend a four-year college and attend vocational school before entering the work force. Those people I know who have chosen this route seem to be doing very well, and sometimes better than people I know who are recent college graduates. I would expect the vocational track to exceed the returns of just a secondary/high schooI education or at least have the returns between the two to be similar. Today it is also a popular topic of conversation whether or not attending college is worth it, in the sense that college is very expensive and many people end up with large sums of student loans once they graduate. I am very lucky and privileged to have the opportunity to attend W&L, and sometimes I think college students forget how fortunate they are. I feel that in the US there is a stigma about people who do not attend college, that people who do not attend college are not smart and will be less successful. This stigma does however vary across different parts the US. One part of the paper I found especially interesting is the authors' explanation of productivity. You do not acquire a job when you are more educated because more education makes you more productive, rather more education signals to an employer that you are more likely to be productive. I found this distinction very interesting. The stigma I mentioned I think follows the thought process that education inherently makes you more productive, which is not the case. Overall education is very important and the paper points out that primary school provides the best returns on education. To increase both social and private benefits of education investments, I think the focus should be placed on primary and secondary schooling.
Toggle Commented Oct 23, 2020 on For Friday's Discussion at Jolly Green General
This paper ultimately (possibly pessimistically) decides that we cannot focus solely on women’s empowerment nor economic development. They are cyclical, so focusing on one aspect will change the other; however, important parts of women’s empowerment are not included when solely focused on development and not all aspects of development are improved when only focusing on the empowerment of women. One thing that I found interesting about this study is how they established proxies, in particular the cost of a child. They looked at the change in household consumption of “adult goods,” (cigarettes, alcohol, or adult clothing) when a child is born as an indirect estimate of the “cost” of the child. The more the consumption of adult good drops, the more expensive a child is. I just thought this was a very creative way to establish a variable that is hard to gather data for. When mentioning how economic development empowers women, there was one thing that especially surprised me. I understood how development created jobs, but I had never thought about how development opens jobs that are “suitable” for women in countries with traditional views. Although I think it is still a bit judgmental for men to find a job “unsuitable” for a women, this is still a way for society to become increasingly comfortable with women in the labor force, ultimately allowing women to gain empowerment. “Thus, policies that explicitly favor women need to be justified, not just in terms of being necessary to bring about gender equality, but in terms of gender equality itself being desirable and worth the cost it implies” This quotes is something that I had never thought about before. I am a proponent of gender equality, but I have never really thought about justifying why equality is itself desirable. I think Sen’s notion of missing women is a great way to justify the need for equality and why equality is worth the price. Before this class, I had never thought about gender inequality in terms of mortality rates or missing women. Thinking about missed opportunities as not only missed opportunities within one’s life but as missing life in general is powerful. Now I have a new, wider perspective on equality.
Toggle Commented Oct 8, 2020 on Duflo for Friday at Jolly Green General
One part of this article that stood out to me was how Turner himself was not part of the “industrial class”. He formed the idea for land grant institutions without being part of the group it was designed to benefit. Turner argued that land grant institutions would provide for a better society as a whole, having external benefit outside of the industrial class. I think it’s an important skill to be able to recognize when there are lives that can be improved outside of your own. It is also interesting to think that this desire for efficiency and to resolve market failure was in people’s minds when this vocabulary did not exist, before economics was officially established. Personally, both agriculture and land grant institutions have made their way into my life. Many members of my family graduated from Clemson, which is South Carolina’s land grant university. On campus you can buy ice cream, blue cheese, and salad dressings all made from the on-campus farms. One of my local high schools runs a horticulture track (similar to a land grant extension program), where high school students get real farm and livestock experience. My family is also in the oyster business, harvesting oysters in Charleston October-May every year. This article I think fully taps into the importance of well-educated citizens, where education is not just for the higher class or for intellectuals. Many people I know personally have benefitted from this idea, that higher education is beneficial for all citizens and when more people are educated, society is better off as a whole.
Toggle Commented Oct 2, 2020 on For Friday's Discussion at Jolly Green General
The Quiggins article made reductions of carbon emissions sound manageable. It is a staggering statistic that the United States needs to reduce emissions by 90% by 2050. One thing I found troubling about the article is that Quiggins suggests that inner-city living is now becoming popular. He believes more people will leave suburbs to live in urban areas, therefore increasing the number of people using mass transit, walking, and cycling. My problem is that with increasing popularity, living in urban areas is becoming very expensive and unreasonable for most people/families. Therefore, the only people who would be able to reduce emissions by biking or walking in urban areas would be those with the economic means to do so. We talked earlier in the week about how sustainability is potentially held back by those of lower socioeconomic status who want more consumption over savings. Sustainability would be held back by those of lower economic status in this instance as well. This contributes to Quiggin’s idea that beliefs, values, and social institutions are what is keeping us from living sustainably. It is our societal mindset that bigger is better, that we need constant innovation, the next new thing, which keeps us from acting sustainably. Our societal mindset is also why being able to provide the world with enough food will not ultimately solve hunger. Quiggins emphasizes that because of the global market structure, food will go to those who can afford it. I also had never heard of the ‘advantage of backwardness’, but I found this idea very interesting. Not that developing countries don’t want improvements, but they’ve managed to wait out the kinks of newer technology, instead of adopting technology when it is first invented. This is one of the reasons developing countries are not having as much trouble acting sustainably. Hopefully, as a developed country, our societal mindset will be able to change so that we do not hit the limits of sustainability.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
South Korea’s economic development story is very interesting. The first thing that stood out to me is how much South Korea grew economically under a harsh militaristic government. Most people think of militaristic governments in bad light, but this paper highlights economic growth in that environment. In a strict political climate, economic growth was fueled by competition and a sense of national pride. South Korea desired to be self-sufficient. The military regimes proved effective in achieving economic growth. Korea was not under military rule forever, but began to democratize in the 1990s. Korea saw a decline in their competitive economic status among other countries. The paper does acknowledge that there is a social price to economic success. Korea was not as advanced socially when they saw their rapid growth, and as they gained social freedoms, their economic prowess dropped slightly. I found the emphasis on education to be particularly interesting, especially the promotion of technical school. I know that was in the 60s, but I feel that most people today do not appreciate tech schools today. I am someone who thinks that our generations is overly obsessed with sending everyone to college. This paper highlights that there are many different routes to economic success. It also poses the question of which should come first economic competitiveness or political/social freedoms.
Toggle Commented Sep 18, 2020 on Miracle on the Han for Friday at Jolly Green General
The most interesting piece of the article for me is how we “lose” information that we once knew when our new technology doesn’t explain it. I’d never quite thought it about it in those terms. Krugman argues that in the economic world, ideas without a backing from a model become this information that falls through the cracks. I do think that it is important to create models, and that it is perfectly fine for models to simplify and make assumptions about economics. However, I find Krugman to be a bit extreme view on the importance of models. Krugman poses this question to economists who don’t use models, "Are you sure that you really have such deep insights that you are better off turning your back on the cumulative discourse among generally intelligent people that is modern economics?” I think this question is a bit harsh and close-minded. This article does give hope that ideas that were once pushed to the back burner can eventually be reformulated and actually used with the help of economic models. Lastly, I would fire the editor of this piece simply because of the phrase "can be gotten started".
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
I found it very interesting the distinct separation of the exports of fast-growing economies and the exports of lagging or trapped economies. Most of the fast-growing Asian economies produce and export technology products. These products bring in a lot of profit, not to mention their governments are setting up policies to aid and protect exporters. For example, the article specifically mentions Chinese incentives, regulation, and policy efforts. Although the lag behind countries are exporting, they are producing mainly agricultural exports. These exports are not as profitable as the tech exports of fast-growing economies. One part of the paper I found most interesting is how some governments essentially blew their chances at economic growth with poor economic leadership. This pertains mostly to Latin American countries like Argentina, Chile, and Brazil that all suffered from severe inflation problems, corruption, and government misallocation. This paper emphasizes the importance of product diversification and institutional/government commitment in sustained economic growth.
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
In this article, Sachs discusses the Millennium Development Goals (MDGs) of 2000-2015 and the newer Sustainable Development Goals (SDGs). I really enjoyed how in depth Sachs discusses both the successes and failures of the MDGs and how those should carry into the SDGs. He does a good job of making the reader feel the gravity of the current trajectory of global environment and poverty issues. For both MDGs and SDGs, broad goals are stated in a way that is easily understood; however I wish there was a little more detail in how countries/companies worked towards MDGs and should work towards SDGs. Sachs states that great strides were made towards achieving the eight MDG goals, but how? I think a pitfall in the article is the lack of specificity. The article argues that global participation and commitment to SDGs from all countries rich and poor are necessary to eliminate poverty and better the environment, but what does participation look like? What does commitment entail? Sachs says the 3 pillars of SDGs are contingent on a yet a 4th - good governance. What does "good governance" look like, so that we can achieve the 3 pillars of economic development, environmental sustainability, and social inclusion.
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Aug 27, 2020