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Connor Verrett
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I thought this paper was really interesting. I am very interested in finance, but I am not as familiar with fixed-income and especially not foreign fixed income markets. I was very surprised that emerging market spreads and US rates had no positive correlation. The US t-bond rate is a crucial piece in evaluating any investment as it represents the risk-free rate. Although this paper was very interesting, I am curious what policies could be implemented as a result of it. Would getting emerging countries to model their credit markets after East-Asian countries be helpful? With rates already so low in the US and Europe is there anything they can do to help developing countries at this point?
Toggle Commented Nov 19, 2021 on ... at Jolly Green General
I found the idea of comparing the return on investment to education to the return to investing in stocks and bonds. I have never really thought of education that way, maybe because I am not really the one paying the bills, but I thought it was very enlightening. It also makes sense in the context of everything we have learned in class that priority should be given to females. I feel like every reading we do it becomes more reinforced how important female human capital is for development. I have also never really thought of technology and education being in a race until now.
Toggle Commented Nov 12, 2021 on For Friday's Discussion at Jolly Green General
I found box 2 to be one of the most interesting parts of the report. I think people in society tend to put climate issues in a different basket of problems than social issues. Even if they connect the dots between climate issues and social issues, the first thought that comes to my head is maybe disenfranchised people living close to heavily polluted places. In America, if you were to tell me who rising sea levels would impact the most I would tell you likely people with beach houses and everybody living in the city of New Orleans. Box 2 explains how in developing countries many impoverished people who live informal settlements in flood plains are incredibly exposed to rising sea levels and their consequences. It was eye-opening to see the intersectionality between climate change and social issues, migration, and food insecurity.
Toggle Commented Oct 22, 2021 on For Friday's Discussion at Jolly Green General
I learned a lot from this article. I really did not realize that South Korea was for a long time a military dictatorship like its counterpart in the North. A lot of times in class we have discussed often how institutions are required in developing nations to implement a policy that leads to development. I am surprised that South Korea was able to do these without democratic institutions. However, I think this case study may lack external validity. We have seen so many other countries that have tried to develop with military juntas in power that have failed due to corruption or revolutions. I am shocked that the economy was still able to thrive after the assassination of the president. I think Korea got lucky. The country would not have had that much access to US aid had it not been in such a strategically important location. South Korea got that aid because the US wanted a foothold in South East Asia. The reading mentioned briefly that foreign investors likely looked past the politically volatile landscape due to the presence of so many American troops there to provide security. While many of the economic policies employed by the government worked, I think trying to apply these to other countries may be short-sighted due to South Korea's unique position.
I found the comparison between the African countries the most interesting. I recently watched a documentary on Botswana and it really is a miracle what they were able to do there. When the British left they were left with almost no people with education. They left the people who had worked with the British in charge as they had experience running a government. Additionally they have been able to have relatively fair elections and rule of law for sometime there. They then used loans from the IMF to buy capital that they then used to like their natural resources. They paid the loans and the government owned half of the mining companies and used the profits to invest in education and public goods. From reading this paper it seems that many of the countries in Africa lake the rule of law that Botswana has or don’t try to evolve past agricultural economies. Greece and Argentina similarly from my readings had a really tough time enforcing rule of law and taxes. It seems no matter how hard countries try to develop, institutions are required for it to occur. I feel Botswana is more similar to some of the Asian miracle countries that focused on expanding their production capabilities and nationalizing some of the industry’s and liberalizing them later.
Toggle Commented Sep 30, 2021 on For Friday's Discussion at Jolly Green General
I think that the qualitative model approach definitely makes a lot more sense if you can achieve the end goal of a general prediction of what happens in certain development situations. Models no matter how complex will always suffer from simplicity, but we would be nowhere without allowing ourselves to take them as simple as they are. At times I've questioned how one could call something so simple a model. I liked the weather pan comparison because it put economics into context with other fields. Drawing on financial models like discounted cash flow analysis have similar issues in that they are very simple and really only work within their assumptions. Economics is unique in my opinion because it combines qualitative and quantitative analysis. Setting an abstract quantitative bar for theory seems contrary to the field itself. Having models for simplified situations give economists something to compare the complex situations to. One thing I've noticed that's not really addressed in many of the models we've looked at is how would account for lacking institutional structures and things like rule of law in developing countries. Even the most complex models could never fully address a random military coup that results in the destruction of capital. Maybe people don't save because of runaway inflation or nowhere they can reliably store their money. None of the model's we accounted for really factor risk. Yes, capital could have more marginal productivity in a nation with less capital. However, would you take the chance at that investment if there was a high probability of instability ruining your investment? You would probably accept that there would be lower productivity in a developing nation with the trade-off that it won't be destroyed. Additionally some of the models even show that it would have higher productivity. Thing's like the O-ring theory show that even just the smallest thing in the world could completely throw off a model. Does this mean the model is bad? I don't think so. A model was never intended to capture all of the minutia.
Toggle Commented Sep 24, 2021 on Krugman for Friday at Jolly Green General
I really like the idea of MDGs. I think creating targets is important in the pursuit of any goal. I also see why SDGs are the next evolution of this. Countries like china were able to raise so many people out of poverty, but at what cost? They did so by becoming a place where goods were cheaply manufactured. They were cheap partly because environmental regulations were lax. Additionally, Muslim groups in Western China were persecuted. I admire the SDGs for trying to address both concerns and I think that countries that strive for these will be better off in the long term than countries that maybe took shortcuts in achieving goals. While I admire the idealism and optimism of people that think the MDGs were responsible for lifting so many people out of poverty, I am not convinced that it was the main motivation for these countries. Does a UN goal without any sort of way of enforcement really have any incentive for countries to adhere to it? I worry that the SDGs will not have anywhere near the same level of success because developing countries may see that they can gain an advantage over developed nations by employing unsustainable growth methods. I also worry developed countries won't employ SDGs because at least in the US and arguably the UK a large portion of the population seemly does not want international organizations setting the standards for them as seen in the US withdrawal from the Paris Climate Agreement and Brexit. While I hope developing and underdeveloped nations strive to achieve the SDGs and I agree with their premise, I worry that without real enforcement measures that they'll be ignored.
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Sep 16, 2021