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Teddy Bentley
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This microfinance concept is a very interesting paper. I have not heard much about microfinance in the past. I think it is a very interesting concept and found the argument in the paper very compelling. It makes sense that focusing on individuals when lending out capital is more important and effective when finding what individuals need. People do many different things when they are making decisions when making investments. There is not one solve all solution when finding a strategy to effectively loan money. When looking at individuals goals and needs you can get a much better picture into how to effectively allocate capital. Being able to effectively loan money is one of the most important ways to stimulating the economy so this is a very important concept to do well for economic development. I think the idea of group liability is very ineffective but I understand why that would be a thing. Group liability to me seems like something that would deter people from borrowing money. Having to rely on others to make payments would make me more reluctant to borrow. The discrepancies between how women and men are affected by loans was also very interesting. When women are able to control their finances there is such a positive impact other families. Men seem to get in the way of saving money so creating bank accounts solely for women is a surprisingly effective development tool as well.
This paper was hard to understand and was filled with a lot of vocabulary that I did not un derstand. However, I was able to pick up on the conclusions that were made and they did make sense. I find that countries would likely have more investments when the interest rates are lowered but it was interesting to make the connection with interest rates in the US versus with the East Asian rising powers. This paper shows how important US policy is on interest rates and how that affects the rest of the world. The US financial policies are very important for stimulating foreign investment. This paper just seemed like the take away is just to show the influence of how to frame the economy in order to stimulate investment. As we know from this class, when there is investment in countries, and they are allocated to the correct resources, this well be very beneficial to the economic development of developing countries.
Toggle Commented Nov 19, 2021 on ... at Jolly Green General
From this study, there seems to be much more returns when there is a difference between education level and the education that is received. For example, low income students are getting a higher return at every level of education than high income students. That is likely because the education level of low income students is much lower, so the exposure to any sort of education is likely to make a very big difference in their ability to create returns. This is consistent in the findings with secondary and higher levels of education as the rate of return drops off from primary to the next levels. Something that wasn’t mentioned in this article was the effect of higher quality education. That is likely because quality of education is very hard to measure, especially on a global level. However, it would be very interesting to test this theory with rates of return. I think there should be something said about the quality of education when looking back at my original conclusion drawn from this article. When there is a big difference between the education level of the student and the education being received, there should be a higher rate of return. If students that get a great primary education aren’t benefitting from secondary school as much as someone with a bad primary education, then there should be an emphasis on increasing the quality of that secondary education. This would be a focus as education becomes more universal but it is crucial when trying to combat the diminishing returns of more education. The social returns must be high when taking in externalities. Refer to the graph w one worker being more effective when other gets educated. When examining social returns, I think they are so low because of the externalities, which is mentioned in the article. This brings me to the graph where if you increase the quality of one worker, the wages of another increase. As one person is educated better, it will increase the productivity of another student. These externalities aren’t taken into account in this study I would presume and that would dramatically increase the social returns to education. Lastly, education is done in a social setting. Gaining relationships and connections that people get in school is an incredibly important social return that should be accounted for.
Toggle Commented Nov 10, 2021 on For Friday's Discussion at Jolly Green General
I think this article did a great job at looking into discrepancies between boys and girls. There were a lot of aspects of life that Duflo explored that I had never really thought of. I thought he did a great job at just looking at the basic issues like mortality rate to try to get an idea of what is going on behind the scenes. It was interesting that he looked into vaccination rates in India to try to see if girls were treated differently than boys. It doesn’t make much sense that girls are more likely to die than boys, but I guess in these poor neighborhoods in India value the lives of boys more than girls which is a disturbing thing. I thought it was especially interesting that when you make households richer, you are disproportionally helping women. It goes to show that economic development and empowerment really do go hand in hand. Another section of this reading that I thought was very provocative was that economic development is not enough for women empowerment. I think this point is shown during the history of the United States. There has been extreme economic development throughout the history of the United States but there has been little done in the empowerment of women. Even in a time where equal rights is at the forefront of social disputes, women are still getting paid less on the dollar than men. It is very important for the population to realize that everyone is better off when there are equal rights and it will take more than just economic development. There needs to be social activation, which is starting to happen in the US in order to really make equal rights a possibility. It is nice to see that we are really starting to make strides on this and gives me hope for the future of the United States economic development.
Toggle Commented Oct 28, 2021 on For Friday's Discussion at Jolly Green General
The turn down the heat report is a sufficient beginning to describe the impact that temperature rises would have on the global economy. It is clear that an increase in global temperature to 2 degrees would make basic needs, like growing food and having access to water, almost impossible for developing nations in the most hard hit areas. A majority of struggling nations would be heavily affected by this climate change and the raise in temperature to 2 degrees is the low estimate. If the global temperature happens to rise to 4 degrees or above, the weather effects on developing nations seems to be completely fatal. Agriculture would be virtually impossible in many of the areas described in the report. With the massive increase in extreme weather events that is already happening, as the global temperature is .8 degrees above pre-industrial times, developing nations would have no time to develop as they would constantly be repairing their nations from weather catastrophes. The effects of a 4 degree increase don’t seem to be comprehended by the people on this globe. There seems to be an increasing sense of urgency for this problem, but it is nowhere near the level of urgency that is needed. I hoped that this paper would be more intense in its delivery. I don’t think it does a good enough job at describing the desperate situation that we are living in. Within the next 8- years they are saying that we could be at 4 degrees above pre-industrial times and that would mean that a tremendous amount of humans on the planet would not be able to meet there normal health needs to survive. It seems that without major policy changes and significant reduction of carbon emissions, there will be no need to plan for economic development because it will be so out of reach.
Toggle Commented Oct 21, 2021 on For Friday's Discussion at Jolly Green General
What is most impressive to me is that South Korea was able to implement such tremendous economic growth without any valuable exports. They did not have many valuable economic resources but still were able to become such an economic success story. While a lot of the success early on was a factor of foreign aid, this story definitely provides hope for other undeveloped countries to create the same success. All that South Korea did was allocate resources correctly and their investment in human capital, namely education, spurted their growth perfectly. It goes to show that just solely investing in your human capital when an economy seems hopeless is a very effective way to turn the entire situation around. The statistic comparing Korea’s income per capita to that of Haiti was very interesting when you start to think about what could be for a country like Haiti. Without many natural resources, there is still considerable hope for your economy when you allocate resources correctly. Unfortunately, factors like corruption get in the way of this and that was actually very surprising because South Korea was run by a military regime when they started the economic development. That leader easily could have prioritized his self-interests and not given back to the country in the way he did. This just goes to show the amazing effect of proper allocation of resources and smart long-term investments. Overall, this is a fascinating success story and one that others should mimic in order to achieve economic growth and prosperity.
This article by Wang, Wong, and Yip was very effective at explaining the role of institutional barriers and TFPs using examples from the real world. Seeing the disparity between different countries provided a great picture and introduction to the trends of what makes a country successful in development. In seeing the success stories of some developing nations, it is clear how they were able to develop successfully through manufacturing and diversification of resources. But most important to their success, was the country’s leadership in allowing development to happen. For example, in Côte d’Ivoire, having a country that is one of the most corrupt in the world is going to seriously hinder development. This compares nicely to China and India and explains how there is such a disparity between the two. While China and India have great access to valuable resources, their strategy to development was succinct and cooperative with institutions. Leadership in the country shared the wealth and incentivized correctly. In a country with extreme corruption, that is likely to be the complete opposite. A country can only successfully develop when its leadership puts institutions in place to allow the people to become more productive and that is what this article explains so well. Additionally, I thought it was very interesting seeing the how imperialism affected the poorer countries. Countries that are at the back end of this model are the ones that are most recently freed. Mother countries took advantage of colonies for hundreds of years and that imperialistic advantage has left these countries feeling the effects even to this day. Lastly, I thought the comparison to US GDP was a great tool to help understand the piece. It made the content very digestible for the reader to be able to refer to information that is very familiar to us.
Toggle Commented Sep 30, 2021 on For Friday's Discussion at Jolly Green General
This paper by Krugman was especially interesting because of his candid and frank message about basing economics on models. It was very interesting how he detailed how there can be very simple and very complex models that may not even be making the right assumptions. I think Krugman did an amazing job using metaphors to describe the complexity of the economy. The metaphor of predicting weather patterns resonated well with me as an example of how to predict economic development. When Krugman said, “In the early stages of a complex science, however, the criterion for a good model is more subjective: it is a good model if it succeeds in explaining or rationalizing some of what you see in the world in a way that you might not have expected.” I feel that the models in the past have explained more general assumptions and are not projecting events that one might not expect. In economic development, this has been a major issue, as Krugman explains, for economists using assumptions of perfectly competitive economies. Another metaphor, explaining how “folk wisdom” in weather prediction was widely ignored until it was actually looked back on and found to be correct. This is a great metaphor for the way economists have looked at development economics. Economists have ignored what seems to be obvious changes in assumptions concerning economies of scale and while Krugman argues that it is a fault of the economic development in the past few decades, I think it is just the evolution of theory that has to take place. I believe in any type of theory creation there are bad judgements and approaches to solving the problem. Here, is the example of economists going down the wrong paths and over simplifying situations for the sake of being able to teach these theories in the right way. However, going down the wrong path is one of the ways to finding the correct path and Krugman mentions that at the end of the paper. In conclusion, Krugman is very insightful in his theories and uses metaphors very well to help the reader understand his message. While economists have made some wrong turns, it has led to the advancement of economic development overall.
Toggle Commented Sep 23, 2021 on Krugman for Friday at Jolly Green General
This article is extremely relevant to todays world, which is shocking given it was published in 2012. It is a startling realization that we have been talking about changes that need to happen in sustainability for the past ten-plus years and still little impact or substantial change has been made. With that being said, Sachs is very much ahead of the times and on the right track in my opinion. Prior to reading this article, I had little idea of what an MDG or SDG was. However, since reading this article I am persuaded by the perceived effectiveness of the SDG and how these goals will positively affect the entire globe. While SDGs have a great grasp of what needs to happen to save humanity, it will still be a very difficult task to carry out on every level. Sachs mentions that this idea may seem far fetched, but he claims that in reality, it is not. In Sachs’ first SDG he wants everyone to have access to sustainable water and sanitation. The problem with this, and most of his other goals, seems to be the disparity of wealth within the people and governments of these developing and developed countries. There is an increasing gap between the most wealthy and the poor and in order to make these beneficial, sustainable changes there will need to be adequate funding. The wealthier individuals and governments will need to set examples and provide aid to the struggling areas of the world and there will need to be more economic development in order to create a larger middle class. In addition to the disparity of wealth in the world, there is also a disparity in the social ideologies that is creating turmoil and is hindering change. Politics in today’s world seem to be as divided as ever. Environmental and human rights issues have been turned into political issues and the disagreements of different viewpoints is seriously slowing down the progress of our world. In order for Sachs’ SDGs to be effective, there needs to be a more universal outlook on the problems that we are facing on a daily basis. It is unfortunate to see that these goals were outlined nine years ago today and are still on the forefront of the problems that we face. There has been some sustainability goals that have been set by leading countries but there is still a lot of work to be done. These goals are a great outline of what needs to happen and they provide valuable insights into how to improve from MDGs shortcomings, but there is still many details that are not included providing steps for countries and the world as a whole to be more sustainable.
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Sep 16, 2021