Since we talked about personality types briefly in class today I thought I'd share this fun realization about famous people with my personality type...
http://www.celebritytypes.com/infj.php
Draw what conclusions you may.
Thursday, October 30, 2014
Wednesday, October 29, 2014
On Putin, and Words, and Externalities
So Putin's former economic advisor spoke at W&L about the Russian- Ukrainian situation this Monday and a few things he said resounded with some themes of class so far. If you are interested you can watch a recording of the talk here.
Word Choice Has Consequences:
In the last couple of class periods we have been trying to navigate language around the IMF. Word Choice becomes very important in situations where perception is key and statements are often really loaded. We have picked our way through "third rate economists" "subsidies" "lender of last resort" "austerity" and other charged words. The speaker pointed out the importance of words too. Specifically in 2 instances:
1. Most American and Western coverage of the situation in the Ukraine has used the word Crisis and has almost exclusively referred to the Ukraine. The west as a whole has not referred to the situation as a Russian-Ukrainian War. It has studiously avoided both references to Russia in the title of the situation and the term War. The speaker chalked this up to a success for Putin's PR department but I'm not sure thats the whole reason. Words have consequences. Like in the Rwandan Genocide in international politics certain words necessitate actions. An invasion of a sovereign nation by another sovereign nation and the resulting conflict-WAR triggers certain obligations in the international community in the age of the UN. So the US responsibility differs in a Ukrainian Crisis and a Russian-Ukrainian War.
2. The speaker pointed out that in July in a particular speech Putin shifted his preposition use in regards to the Ukraine. Before he used the preposition in Russian that means in- so "in the Ukraine" which is what is used in Russian for all independent countries. However in Russian you use "on" for territories/regions and for the first time publicly, in that speech Putin used the Russian "on the Ukraine" thus denying recognition to Ukrainian sovereignty.
Externalities Like Human Rights
We've discussed that there are non-economic factors that play into people's decisions. The labor market in particular is shaped by this. Businesses and workers may choose to live in places with higher taxes or some other economic nuisance because they appreciate the society or other non-fiscal factors (ex. Scandinavia) Tommy Joe in particular once made the observation that economics recognizes that people have preferences and that one of those preferences may be human rights.
The speaker pointe out that this particular principle can be seen in the Crimea. Many ethnic Russians speak Russian and are culturally Russian have still chosen to live in the Ukrainian Crimea instead of Russia. This is despite the fact that Russia would probably be more culturally comfortable and that Russia has higher real wages. He attributed these decisions to a preference for democratic government, tolerant society, and rights of speech which are more available in the Ukraine.
Preferences like these make a difference in the lives of real people in the Crimea.
Word Choice Has Consequences:
In the last couple of class periods we have been trying to navigate language around the IMF. Word Choice becomes very important in situations where perception is key and statements are often really loaded. We have picked our way through "third rate economists" "subsidies" "lender of last resort" "austerity" and other charged words. The speaker pointed out the importance of words too. Specifically in 2 instances:
1. Most American and Western coverage of the situation in the Ukraine has used the word Crisis and has almost exclusively referred to the Ukraine. The west as a whole has not referred to the situation as a Russian-Ukrainian War. It has studiously avoided both references to Russia in the title of the situation and the term War. The speaker chalked this up to a success for Putin's PR department but I'm not sure thats the whole reason. Words have consequences. Like in the Rwandan Genocide in international politics certain words necessitate actions. An invasion of a sovereign nation by another sovereign nation and the resulting conflict-WAR triggers certain obligations in the international community in the age of the UN. So the US responsibility differs in a Ukrainian Crisis and a Russian-Ukrainian War.
2. The speaker pointed out that in July in a particular speech Putin shifted his preposition use in regards to the Ukraine. Before he used the preposition in Russian that means in- so "in the Ukraine" which is what is used in Russian for all independent countries. However in Russian you use "on" for territories/regions and for the first time publicly, in that speech Putin used the Russian "on the Ukraine" thus denying recognition to Ukrainian sovereignty.
Externalities Like Human Rights
We've discussed that there are non-economic factors that play into people's decisions. The labor market in particular is shaped by this. Businesses and workers may choose to live in places with higher taxes or some other economic nuisance because they appreciate the society or other non-fiscal factors (ex. Scandinavia) Tommy Joe in particular once made the observation that economics recognizes that people have preferences and that one of those preferences may be human rights.
The speaker pointe out that this particular principle can be seen in the Crimea. Many ethnic Russians speak Russian and are culturally Russian have still chosen to live in the Ukrainian Crimea instead of Russia. This is despite the fact that Russia would probably be more culturally comfortable and that Russia has higher real wages. He attributed these decisions to a preference for democratic government, tolerant society, and rights of speech which are more available in the Ukraine.
Preferences like these make a difference in the lives of real people in the Crimea.
Thursday, October 23, 2014
Africa Isn't A Country
A Point:
"Africa is not one country" is a phrase I hear all the time (though I admit that may not be as universal an experience). And it's true. Africa is a continent with a wide array of countries with widely different cultural, economic, political, ext. assets, challenges, and situations. Looking at Africa as if it's all the same is just silly.
From the Krugman (The Return of Depression Economics) and Stiglitz it seems clear that major problem for LDCs in debt markets is the tendency for lenders to view them as all one. Over and over again we find examples of regions or even all emerging markets being subjected to massive pullouts of investment and recall of loans (to name a few things) because a different LDC is having a problem or made a bad decision. When Mexico handled devalued its currency (and arguably botched the it) Argentina was devastated and investment in all of Latin America was affected. The panic in the Asian markets made lenders wary of al lending to LDCs anywhere. For all there is to be said of regional linkages and markets, it seems that the global lending markets suffers from a case of "Less Developed Countries are all the same/one country". In a lending market that is highly susceptible to speculation and "animal spirits" as we discussed in class this kind of mistaken assumption that if LDCs in one country or region are making bad (or good) financial decisions or in bad (or good) economic situations that all LDCs are a risk (or good investment).
Some Thoughts:
From our readings it is clear there are many differences between personal and international/sovereign lending. However would it not solve at least a chunk of the problems that Stiglitz is so crazy about to practice fixed rate loans on the international scale? Especially with the long time period of such large loans this seems more stable and practical.
"Africa is not one country" is a phrase I hear all the time (though I admit that may not be as universal an experience). And it's true. Africa is a continent with a wide array of countries with widely different cultural, economic, political, ext. assets, challenges, and situations. Looking at Africa as if it's all the same is just silly.
From the Krugman (The Return of Depression Economics) and Stiglitz it seems clear that major problem for LDCs in debt markets is the tendency for lenders to view them as all one. Over and over again we find examples of regions or even all emerging markets being subjected to massive pullouts of investment and recall of loans (to name a few things) because a different LDC is having a problem or made a bad decision. When Mexico handled devalued its currency (and arguably botched the it) Argentina was devastated and investment in all of Latin America was affected. The panic in the Asian markets made lenders wary of al lending to LDCs anywhere. For all there is to be said of regional linkages and markets, it seems that the global lending markets suffers from a case of "Less Developed Countries are all the same/one country". In a lending market that is highly susceptible to speculation and "animal spirits" as we discussed in class this kind of mistaken assumption that if LDCs in one country or region are making bad (or good) financial decisions or in bad (or good) economic situations that all LDCs are a risk (or good investment).
Some Thoughts:
From our readings it is clear there are many differences between personal and international/sovereign lending. However would it not solve at least a chunk of the problems that Stiglitz is so crazy about to practice fixed rate loans on the international scale? Especially with the long time period of such large loans this seems more stable and practical.
Thursday, October 9, 2014
A Call for a Return to the Bunsen Burners
The push for STEM and concern for the state of science and math education in the is serious and perhaps well founded. But maybe our concern about falling behind is a little overblown... or at least not new.
(from a book about teenage culture in the 1950s)
Wednesday, October 8, 2014
A Collection of Thoughts on FDI
We've been talking a lot about Foreign Direct Investment (FDI) lately. It seems there is at least something close to a consensus that FDI can be an extremely positive force for development in less developed nations. Stiglitz had some caveats to the benefits of FDI versus what they could be considering the sometimes negative externalities like environmental impact and questionable business practices like sweatshops and child labor (though he and Wolf could debate that one out). Meanwhile Wolf, in trying to defend FDI, gave its major potential impact on the developing world a bit of the short shift. In the midst of all this FDI talk I have had a few thoughts.
Is all FDI created equal?
It seems as if it isn't. FDI seems almost clearly better as a form of investment that hot speculative capital flow. Some (maybe most) FDI seems beneficial, but many of the negative examples discussed by both Wolf and Stiglitz centered around resource extraction based FDI, which seems to do little to impart technological or skill advances, instead leaving the sites of investment with fewer resources and environmental disasters.
There also seems to be certain plans for and types of government management of FDI that work better than others. China has seen major benefits from FDI and its government manages carefully which investments it will allow in- insisting on some measure of control over the project. Based on Kumar, India has also engaged in this type of limitation- it opened up it's retail sector to foreign investment but limits outsiders to a maximum 49% stake (pg.5). These manages FDI regimes seems anecdotally the most successful, but I wonder it is the result of government management and restriction or other factors?
FDI and Democracy
One of the criteria that gets mentioned over and over again as a key factor of attracting FDI is political stability. Companies don't like to invest where they are unsure of the state of rule of law, property rights, and access to a workforce in the immediate future. Since FDI is a more entrenched and long term form of investment it cannot simply be pulled out (without significant loss) at the first sign of turmoil.
This logic makes sense. However those in the west that push FDI and "development aims" tend to push them simultaneously with political liberalization. Political liberalization is a great ideal, however in practice it often does not look like stable political environment that attracts investors. In fact many of those most successful with FDI like South Korea and China have had regulated FDI systems controlled by strong, not exactly democratic regimes. Liberalization politically has sometimes followed economic development- but that development has been kicked off and nurtured by restrictive regimes. This reality conflicts with liberalism's ideal of political and economic openness moving together and the idea that freedoms advance together as discussed by Amarta Sen. However in practical situations- nations where (often pushed by the west) political liberalization has progressed we have seen that new democracies are highly volatile places- of exactly the sort that terrify investors. What does this say about where FDI is successful and should it change the way that we look at development strategy?
Is all FDI created equal?
It seems as if it isn't. FDI seems almost clearly better as a form of investment that hot speculative capital flow. Some (maybe most) FDI seems beneficial, but many of the negative examples discussed by both Wolf and Stiglitz centered around resource extraction based FDI, which seems to do little to impart technological or skill advances, instead leaving the sites of investment with fewer resources and environmental disasters.
There also seems to be certain plans for and types of government management of FDI that work better than others. China has seen major benefits from FDI and its government manages carefully which investments it will allow in- insisting on some measure of control over the project. Based on Kumar, India has also engaged in this type of limitation- it opened up it's retail sector to foreign investment but limits outsiders to a maximum 49% stake (pg.5). These manages FDI regimes seems anecdotally the most successful, but I wonder it is the result of government management and restriction or other factors?
FDI and Democracy
One of the criteria that gets mentioned over and over again as a key factor of attracting FDI is political stability. Companies don't like to invest where they are unsure of the state of rule of law, property rights, and access to a workforce in the immediate future. Since FDI is a more entrenched and long term form of investment it cannot simply be pulled out (without significant loss) at the first sign of turmoil.
This logic makes sense. However those in the west that push FDI and "development aims" tend to push them simultaneously with political liberalization. Political liberalization is a great ideal, however in practice it often does not look like stable political environment that attracts investors. In fact many of those most successful with FDI like South Korea and China have had regulated FDI systems controlled by strong, not exactly democratic regimes. Liberalization politically has sometimes followed economic development- but that development has been kicked off and nurtured by restrictive regimes. This reality conflicts with liberalism's ideal of political and economic openness moving together and the idea that freedoms advance together as discussed by Amarta Sen. However in practical situations- nations where (often pushed by the west) political liberalization has progressed we have seen that new democracies are highly volatile places- of exactly the sort that terrify investors. What does this say about where FDI is successful and should it change the way that we look at development strategy?
Wednesday, October 1, 2014
Passing of the Torch
In class on Tuesday we talked about the passing of the global hegemon torch from Great Britain to the US. This was in many ways an extraordinary moment in world history- the international equivalent of the "Bloodless Revolution" of 1800 when Adams handed the reins of power to Jefferson. Of course there was not one single moment when this occurred- but a gradual- if intentional and planned -handing over of international maintenance and responsibility to the rising United States. One extraordinary instance in which this responsibility transition can be clearly indicated is the transition of support in postwar Greece and Turkey from Britain to the US as seen here in a short summary and statement on this extraordinary moment when the US took up its international mantle.
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