This is John Lavette's Typepad Profile.
Join Typepad and start following John Lavette's activity
Join Now!
Already a member? Sign In
John Lavette
Recent Activity
Juliana Milovich’s paper has an extremely wide berth, considering not only the impacts of aid on poverty but also the differences in institutions, natural resources, and social factors in the 64 sample countries. I found the mechanism of measuring aid particularly interesting. Milovich establishes that there is a large correlation between sitting on the United Nations Security council and the amount of aid received by the United States. In class, I would love to consider the exclusion restriction which assumes the instrument is randomly assigned and that it is not related to the poverty other than through the increased levels of aid (if I understand properly). I wonder if a position on the UNSC provides political power which could aid a nation in decreasing poverty. The results seem to support the hypothesis that the aid associated with a UNSC position does seem to reduce MPI but not an income perspective of poverty. However, the scatter plots seem (at least to me) to suggest there is a large amount of variability for countries which experience less than 5 years as a member of the UNSC. I find these results interesting as well, and I would like to discuss the linkage aid has to the components of the MPI (such as water availability, health, and education).
Toggle Commented Nov 13, 2020 on Last Post of the Year at Jolly Green General
While this article is very dense and uses technical jargon which I found to be difficult to follow at times, the conclusions formed are interesting and seem logical. When considering the forex market, both the supply and demand side for a country’s bonds must be considered. I am happy that I was able to read this paper after taking international finance as I was familiar with the concepts discussed. I was reminded of two topics we discussed in international finance. Firstly, the discussion of rational action in foreign lenders. I remember discussing that while carry trade could be explained through risk premia associated with lending in developing countries, lenders often take bandwagon actions without fully considering the risks associated with foreign investment. Secondly, the monetary trilemma when considering exchange rate policies was useful when unpacking the conclusion that specific cases may differ between nations. The trilemma states that a nation can pick two of the following traits for its monetary policy: exchange rate stability, free capital mobility, and independent policy. Therefore, a nation with fixed exchange rates will be impacted much differently to rising interest rates in industrial countries than those who allow a floating exchange rate. Also, a two countries which fix their exchange rate to the dollar must choose either to implement capital controls or concede their monetary policy to the nation to which they are fixing their currency. I am interested to discuss the paper in class to clarify some of the denser topics discussed in the paper, but it stands to reason that since exchange rate policy is specific to each nation since the transition from the Breton Woods era to the current non-system.
Toggle Commented Nov 6, 2020 on For Friday's Discussion at Jolly Green General
I found Parker and Vogl’s work on conditional cash transfers interesting as well as supportive of topics we have previously discussed in class. I enjoyed seeing data points which support the hypothesis that targeting specific groups can see larger impacts on human capital. First, there is substantial evidence that Mexico’s Progresa program has provided opportunities for young women. Not only through greater labor force participation but also through opportunities for migration. Second, Progresa is focused on low-income regions of Mexico and shows large returns for these groups, further supporting our discussion of how targeting populations of lower economic status can lead to greater returns from human capital investment. Finally, the study is founded on the understanding that returns from human capital investment are largest for children who have yet to make the transition from primary to secondary school. We had previously discussed how all three of these population groups would most largely benefit from poverty programming, and this paper presents concrete support for long-term gains of conditional cash transfers. Prior to reading this paper, I was unfamiliar with the Progresa program. However, as discussed above, I was happy to find that the program seemed well reasoned in its approach towards building human capital in vulnerable populations. Of particular note, I found it interesting that the cash transfers were provided to the mother of the child in order to hopefully ensure the greatest amount of spending on the child as possible. A question that constantly comes up throughout the paper is the comparison between conditional and unconditional programs. I am interested to learn more about the differences in results for these two types of programs. I think that conditional cash transfers make logical sense as they help to ensure that money is spent in a productive way. However, as we have discussed in class, low-income households act in rational ways in order to improve their livelihood and it seems that conditional programs could exclude certain highly vulnerable households by casting the net too narrowly. A combination of both programs seems sensible as completely cutting funding for low-income households after the child fails a grade more than once seems unreasonable since there could be exogenous factors preventing that child’s success. Until I learn more about the differences and researchers investigate more long term outcomes, I can only provide my initial reactions.
Toggle Commented Oct 29, 2020 on For Friday's Discussion at Jolly Green General
Duflo’s paper provides a general discussion and review of literature women empowerment and economic development. The beginning of the paper considers the relationship between economic development and the health and treatment of women and concludes that even a focus on economic development would disproportionally benefit women. This reminded me of a point of discussion in Wednesday’s class. We discussed how the causality flows both ways. Economic development can provide greater empowerment for women which can then provide greater growth as a significant part of the population reach a greater potential. However, Duflo discusses the fact that economic development will not provide enough growth to efficiently change discrimination. Despite this, policy makers have a very straightforward path to success but still focus primarily on a single side of the coin. Gender-blind policies have the ability to greatly increase welfare not only for women but for the entire population. There are obviously also major inherent value in providing liberties to a large portion of a population. These policies also have the added benefit of impacting social behavior in households, pushing them towards gender neutrality. These transitions can allow greater female participation through lowering fertility rates and increasing age at marriage and first child. As participation increases, women have more decision making power within the household and government which can further shape policy decisions.
Toggle Commented Oct 8, 2020 on Duflo for Friday at Jolly Green General
Epplin’s paper, “Market Failures and Land Grant Universities,” gave a relatively succinct and comprehensive history of land grant universities in the United States. I specifically found the beginning interesting and the difficulties which were faced when trying to get legislation passed. In the first half of the paper, a quote from Thomas Jefferson stood out: “If the children are untaught, their ignorance and vices will in future life cost us much dearer in their consequences than it would have done in their correction by a good education.” With the elections in full swing, I believe the focus on universal education independent of financial background. In a democracy, education is vitally important. While the paper focuses on agricultural research and education, general schooling is also very important. Any functional democracy relies on the ability of the general public to elect competent leaders. Without an educated populace, any democracy threatens to transition, as Socrates feared, into a demagoguery. More in line with the paper, I found it interesting that we need to allocated even more public resources towards agricultural education. In class we discussed how America should lower intervention in the agricultural sector in order to provide greater opportunity for foreign producers. I suppose Epplin also extends his argument into the fact that taxes can outweigh the social costs and end up increasing overall welfare within a country. Whether that be in the agricultural industry or otherwise.
Toggle Commented Oct 1, 2020 on For Friday's Discussion at Jolly Green General
I found Quiggin’s piece both uplifting as well as concerning. I find it reassuring that we have the capacity to both reduce our impact on the environment while pulling a large portion of the world out of poverty. However, I find these facts concerning due to the recent policy prescriptions passed by our current administration. Undoubtedly, the solutions discussed by Quiggin will require international cooperation, so when a world leader such as the United States withdraws from accords like the Paris Agreement. A thought I had while reading the paper has to do with our discussion on Wednesday. When considering the future, it is impossible to predict the exact wants and needs as well as the technology of future generations. However, technological advancement can work both to reduce or increase our impact on the environment. While Quiggin points out the advancements in solar energy costs, our ability to access oil and coal reservoirs has also increased. With the development of fracking, we now have much more access to fossil fuels at a cheaper cost. This could provide carbon fuels at a cheaper price and further discourage the transition to more renewable resources. Even so, if we make our decisions based on the welfare of all people instead of conceding ourselves to the desires of those who have a vested interest in maintaining the status quo.
Toggle Commented Sep 24, 2020 on Readings for Friday at Jolly Green General
There are many interesting characteristics of South Korea’s development which tie nicely with Rodrik’s strategies for growth. There are a few primary features which provide support for Rodrik’s argument. Primarily, South Korea took slow steps towards liberalizing their economy. The Park regime took state control over credit in order to choose the most viable investments to meet development goals. The regime also limited direct foreign investment at first, only loosening regulation after the First Five-Year Development Plan. However, the South Korean government also worked closely with selected entrepreneurs to create conglomerates. These chaebols were given low-interest loans, tax exemptions, and premium rates, but the South Korean government was still able to support performance and efficiency. The government monitored and gave preference to more successful firms rather than allow the monopolization of industries. I believe this leads me to the final point about the successes of South Korean development. Rodrik explains that growth is not the same as sustainable growth, arguing that strong institutions are needed to mitigate corruption. I was interested to learn that South Korea initialized their economic growth through large investment in human capital. After establishing an educated populace through both domestic students as well as foreign-educated citizens, South Korea assigned political positions through standardized testing and merit. This allowed for more intelligent policy decisions as well as lower corruption. So, while the government intervened heavily during the initial development of the nation and the transition to heavy industry, the best interest of the nation was of primary concern. Once the economy was mature, the government saw a shift towards democratization as a middle class emerged. While corruption and phony capitalism was impossible to avoid, South Korea was able to further shift towards a liberalized economy. Part of me wonders whether the specific policy prescriptions of South Korea could work as well in a place such as South America, and I find the “Confucian ethos” a compelling caveat to the story of South Korean development.
Toggle Commented Sep 17, 2020 on Miracle on the Han for Friday at Jolly Green General
I believe Krugman did an exceptional job in presenting the details to the story of development economics. I am especially interested in his discussion of how high development economics became a niche field which was largely ignored but still provides an interesting lenses through which to think about the world. The use of metaphor and model are useful tools in an ever-growing data driven world. Models in their definition are oversimplifications of reality which give greater insight and understanding, and Krugman does a wonderful job of framing the field of economics and how Hirschman’s works fit into the greater puzzle. Mathematics and statistics are of great importance when assessing certain hypotheses. However, a strong underlying theoretical framework goes a long way for assessing the problem. While econometrics teaches us to seek to capture every possible endogenous variable applicable to a certain research question, a broader approach can often bring fruitful discussion and a greater understanding. The Big Push idea is also quite captivating. While the model discussed in the paper only used labor as an input variable, the conclusions that for many developing markets the adoption of more effective means of production reminded me of our class discussion on why certain subsistent markets might not adopt new technology. Not only might they not have the capital needed to adopt the more expensive means of the production but there might also be an inherent risk factor to the transition to a new method of production.
Toggle Commented Sep 10, 2020 on Krugman for Friday at Jolly Green General
In their paper, Wang et al. delve into the factors which drive growth in developing nations as well as those which hinder certain trapped and lagging countries. There were many interesting points discussed throughout the paper, and I appreciated the focus placed on TFP and institutional barriers. There are a few important conclusions which I found especially interesting. Firstly, the success present in Southeast Asia is astounding. These nations have strong political institutions which were able to effectively develop export-oriented growth strategies. After establishing strong manufacturing industries, many of these nations were able to provide cheap credit and transition towards high-tech or service industries. Conversely, many South American and African nations faced problems with both credit as well as reliance on raw resource production. With little diversification, setbacks are inevitable and especially difficult to deal with for developing nations. In those nations which were able to develop manufacturing sectors, such as Ghana, protectionism led to declining growth rates. Another major factor which seems to lead towards market volatility is copious amounts of government spending and large deficits. These can cause problems as developing nations are often seen as riskier endeavors to foreign investors. If a nation becomes too reliant on foreign capital or lacks the ability to stabilize their currency, they are bound to face economic crisis which inhibit their growth. Wang et al. discuss the influence of political corruption. I am interested in discussing the factors which contribute to strong institutions, as corruption is a decisive element which seems to hold back lagging and trapped nations.
Toggle Commented Sep 3, 2020 on Reading for next Friday at Jolly Green General
I found the reading assignment on the transition from the Millennium Development Goals to the Sustainable Development Goals very compelling. I believe a focus on sustainable development is incredibly important for the future of the global community. Not only because climate change and the exhaustion of the world’s resources are of universal concern but also due to the connection between environmental degradation and poverty. The effects of climate change, such as extreme weather, water stress, and rising temperatures, most greatly impact poorer countries despite wealthier, more industrialized nations leading the world in carbon emission. More developed nations will undoubtedly need to lead the charge in switching to more sustainable economic practices. However, this could pose a problem in the fact that, as the paper stated, enforcing global agreements is impossible without an international governing body which wields significant power. The immediacy of sustainable growth problems only adds to the importance of Sachs’ other two proposed categories, economic development and social inclusion. While many of Sachs’ recommendations are optimistic in their ideals for global cooperation as well as the participation of the private sector, he lacks defined strategies for incentivizing involvement for the achievement of the goals proposed by the SDGs. I feel that the majority of people would agree that the SDGs are a step in the right direction, but I am interested in discussing possible concrete policies which could be successfully implemented. Are these lofty goals only possible through substantial government intervention and leadership, or can they be achieved on a more local basis through individual action and participation? I realize the answer is probably some of both; however, the actual implementation of methods for achieving the SDGs will require significant commitment to a cause outside of typical geopolitical action.
John Lavette is now following The Typepad Team
Aug 27, 2020