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Matt DiTondo
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One thing I noticed throughout this piece, which has been a theme throughout the class, is how interventions have different effects than they were initially predicted to. Microfinance was supposed to, or at least is was branded as means to, spark entrepreneurship in the developing world. Yet, the gains in entrepreneurship have been modest. While there were some slight increases in businesses opened (a sign of entraprenuership), we fail to see evidence of other forms of entrepreneurship in the form of increased revenues or number of employees. Instead, we see a shifting of recipient expenses and a changing basket of goods consumed. We also see, much less liberalization of entrepreneurship and returns from loans for women , another thing these programs were specifically supposed to address. However, while these points are often used to devalue the importance of Microfinance, that doesnt necessarily mean that the programs have failed.
As my other classmates have said, I found this piece to be really dense and somewhat hard to comprehend. While I know a little about international finance from the class on Money and Banking, I still found this essay relatively difficult to digest. One finding I found interesting was the necessity of looking at both the supply and demand sides of the equation. Typically in Money and Banking (and to a lesser extent Macro) we looked market interest rates as the only input.
Toggle Commented Nov 19, 2021 on ... at Jolly Green General
In recent weeks we've discussed the concept of diminishing returns to investments in human capital. Particularly, we've looked at how (for the growth path of developed nations like South Korea) investments in technology (R&D) becomes the primary mover of the production function. While we've discussed this on an individual nation scale, the aggregation of ROI from human capital investments allows us to look at a global Solow model. This is shown in Figure 1 with a slightly negative slope. However, any conclusions drawn from this figure are pretty dubious, as its r^2 is only .003. This continues for figure 2 as well. But then in table 1 we see a result we'd more expect, with the global mean years of education increasing along with the mean ROI. This would suggest that the global community is still at a point of increasing returns to human capital investments and that this should be a primary point of focus
Toggle Commented Nov 12, 2021 on For Friday's Discussion at Jolly Green General
One thing important aspect of the issue of climate change that I thought this piece nicley elucidates, is that the ones who are to be most effected by the negative impacts of climate change are the ones who are least equipped to fight it. The poor and underdeveloped regions of the world are those that are directly in the crosshairs of things like sea level rise, reduced crop/ fishery yields, and increasingly adverse weather events. Not only are these detrimental to the region, they also further reduce those peoples' ability to combat future events. This has played out in regions like the Aral Sea, which has been almost entirely been reduced by Climate-Chane and other human activities. Now the the people who inhabit this region are even more impoverished, since they can no longer utilize the Aral Sea, and now have no ability to further combat the destruction of their livelihoods.
Toggle Commented Oct 21, 2021 on For Friday's Discussion at Jolly Green General
The rise of South Korea is interesting to me on a personal note, because my grandfather was stationed there at the end of the Korean War. He has told stories before about how there was absolutely nothing (buildings, infrastructure, etc) there, and how everything that his battalion needed, they had to build. So it is interesting that, within a span of a lifetime, a whole country can change so significantly. This brings me to another thought: it seems, from the last few readings, its almost as thought the wealthy and well developed nations are picking winners and losers. Politically, the US needed South Korea as a bulwark against Communism, and so as the article mentions, it invested rather heavily in it (mostly through foreign aid.) In the last piece we read, we saw a similar story for the US and Taiwan. It makes me think whether or not we have a greater capacity to develop nations than we give in appearance.
One thing I noticed in this article, and the class in general, is how there is no tried and true playbook for development. There is quite an element of luck or randomness to a country achieving growth ahead of its peers. This is evident in things like factories set up to supply GIs kickstarting Hong Kong's economic development. Or in transfers of American technology to Taiwan, which has now led the island nation to being a key player in the modern global economy thanks to its hyper efficient and advanced production of microchips. Without an outside actor to get the ball rolling, would these countries be where they are today? In many of these countries there was a similar strategy: bet heavily on a key natural resource and use that to fuel the broader economy. And for Botswana this led to them being the "African Miracle." Yet, for the Ivory Coast this bet failed, and the country has lagged behind ever since. In most cases it seems that this bet is a losing one, as we talk about in other economics classes with the Dutch Disease or Natural Resource Curse. The only delineating factor seems to be the one we understand/are able to address the least: institutions.
Toggle Commented Sep 30, 2021 on For Friday's Discussion at Jolly Green General
I founds Krugman's point about the loss of knowledge in pursuit of more rigorous models to be very interesting. There is an almost tragic sort of irony in the story of some piece of traditionally-held wisdom that is tossed out by a model, only to be later reaffirmed by the very same (only more matured) model that had cast it aside. The idea of how we always seem to throw the baby out with the bathwater certainly has wide-ranging implications, well beyond the field of economics, and it actually reminded me of a story I had read about a similar thing that occurred in a field sprung from economics: baseball analytics. We, for the most part, know of the sort of baseball analytics that were popularized by the book and movie Moneyball. We might not know the specifics metrics, but we have a gerneral idea that teams began to use advanced statistics and modeling to build better baseball teams. But we tend to think of this mostly as a singular discovery and not one that is continually evolving. And what has evolved over the last two decades as it relates to the position of Catcher is a textbook example of the effect Krugman describes. This evolution pertains specifically to one skill pitchers require, called "pitch framing". In essence this is the ability to catch a ball in such a way that, to the umpire, a ball appears as a strike. Up until the application of analytic models, it was unquestioned that this was one of the most important skills for a catcher to posses-- until it wasn't. For over a decade, all the smartest guys in the room thought nothing of this skill. Why? Because they lacked the data to quantify it. Their data showed only showed where a pitch had ended up and what the umpires call was, and with this data their (limited) models evaluated pitcher performance, and they determined pitch framing to be of dubious value. It wasn't until their data collection became more advance, specifically in technology that tracked the exact flightpath of every pitch, did they realize their error. With this newfound data, they reevaluated their models, and in the end reaffirmed that the age old wisdom had been correct: that this skill was one of the most important things for a pitcher to posses. While this story doesn't relate specifically to economics, it is representative of how this sort of failure of imagination and wisdom plagues more than just our study of Development Economics.
Toggle Commented Sep 23, 2021 on Krugman for Friday at Jolly Green General
I have previously encountered the MDGs in some form of media (which I am now unable to find now) which praised, as Sachs does, the structuring and simplicity of the MDGs, and how that was related to their success. The piece essentially argued that the MDGs were a large (and very positive) exception to the normal modus operandi of the UN. With the UN, being such a large, international, and beauracratic body, it can suffer from a systemic problem of over complexity. I believe the piece referred to another UN treatise on addressing climate change, which had something like 100-150 listed goals, with varying degrees of vaugery. With such a large list and little ability to rank-order their importance, it is much more difficult for the International community to actually ~do~ something to address the goals. This stands in stark contrast to the utter simplicity of the MDGs with few, important, and clearly stated goals. What the MDGs provided, and partially why they were so successful, was that they provided a clear and actionable pathway towards their achievement. This notion is something that we discuss heavily in Environmental Economics/Ethics classes: goals being clearly stated and achievable. And in this way I think I may see why, as Alli pointed out, that the SDGs were not as effective as their predecessors. I find these goals to be significantly less actionable, in that they are somewhat vague. Particularly SDG 3 caught my eye: "every country will promote the wellbeing and capabilities of all their citizens, enabling all citizens to reach their potential". While certainly a very lofty and admirable goal... it does really mean anything. Wellbeing and potential are subjective terms (as opposed to something like income), whose defining can encompass an entire semester of a philosophy course. And furthermore there isn't a clear and mutually agreed upon metric by which success or failure can be measure. While it points out Bhutan's metric of Gross National Happiness, this is not something like gross income which can be objectively defined, measured, and compared between nations and peoples. I think that the failure to structure the SDGs as the MDGs was one factor, as of course there are certainly countless others, in their relative failure.
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Sep 16, 2021