Monday, May 23, 2011

Kristof on Aid ...

...and health, and education, and economics.

Here at the NYT

Wednesday, April 27, 2011

Last call for posts

OK class... here's a shot at some blogging credit.

What topics did you think were the most interesting? The least? Why?

Was there a topic that you wish we had spent more time on? Less? Why?

How do you feel about the study of the economics of growth and development? Hard? Easy? Confusing?

Of all the topics we covered this term, which do you feel deserves more (or less) attention in terms of the public's general knowledge?

Tuesday, April 26, 2011

Collier on post-conflict resolution

Here's a video of Paul Collier at the US State Department discussing the keys to rebuilding war torn nations.

He emphasizes the importance of security before politics and discusses the economics of peacekeeping.

What are key elements to this approach?

Wednesday, April 13, 2011

Foreign Aid

Here are some readings and viewings on the pros and cons of foreign aid:

Various views at the Guardian.

Dambisa Moyo voices her strong objection to aid for Africa at the NYT.

Here's Moyo at the Colbert Report.

Moyo and Sachs argue at the Huffington Post here and here.

Bill Gates at Time.

Monday, April 11, 2011


Here's a video of Paul Collier discussing a few steps toward reversing the downward trend for the bottom billion. Note the importance of governance and the perils of "instant democracy". These have obvious implications for transitions currently underway in north Africa and the middle east. He also discusses the resource curse, and mentions "verified auctions" as a potential way to prevent backroom deals for extraction rights. The idea is that anyone interested in being a buyer or seller of the commodity must be backed by an objective third party (hence verified as a legitimate participant). The third party would presumably be an international agency.

Thursday, March 31, 2011

Correlation, causation and data

Here's a cool short post from the guys at Freakonomics about using data to advocate a viewpoint. You may recognize the name of the purported offender.

Many of you have had econometrics or are now enrolled in 422 (others will have me for 422 next spring), so hopefully if you can't relate to this, you soon will. People want answers. Analysts included. During tumultuous economic times this is especially so. Our job as economists is to seek those answers, find the truth, whatever it may be, and report it as objectively as possible. But many times the truth is "we don't know". People (especially those paying for analysis) don't seem to like that answer, which can create unfortunate pressures that can lead to tenuous conclusions.

Hopefully this class has increased your awareness that economics is messy, and "one size fits all" solutions are very rare.

For your work, be open about what you know, what you don't know, and what your assumptions are. When reading the work of others, question assumptions, check the data and always know your sources.

Thanks to RH for the link.

Thursday, March 10, 2011

Health and economic growth in India

Here's a quick summary of a study suggesting that gains in economic growth did not result in gains in child nutrition.

Why might this be the case?

Tuesday, March 8, 2011

More on the college premium

Krugman follows up on his Sunday piece with a recent blog post at NYT and another here where he answers my question.

Obviously the question of whether the college premium is going up, going down or staying flat is a matter of supply and demand for labor. On the demand side, technology can be a substitute for labor, and as tech improves (cheaper, better/smarter machines) the demand for substitutable labor should fall. But labor can also be a complement to technology, so as tech improves we should see an increase in demand. I think the jury is out in terms of the net effect, but clearly this is a matter of what types of labor serve as complements and what types are easily substituted.

Good stuff here from NBER.

As for the supply... here's a bit of info from the economist.

Interesting and related material here.

Monday, March 7, 2011

Krugman flips the script on education and growth

From today's NYT.

Krugman notes that the outsourcing of low-education jobs may be reaching a plateau, and that outsourcing of high-ed jobs may be speeding up. If so, strong education policy may not be the golden ticket to growth. Interesting perspective. I buy the "hole in the middle" argument, though I'm not sure I buy the idea that high-tech or high-ed jobs are "more offshorable". I haven't yet read the Blinder and Krueger paper, but it seems there's a parallel between these ideas and traded goods vs. non-traded goods. Which types of labor are easily outsourced to the lowest and/or most educated bidder?

How might this affect the college premium? The grad school premium? Will the effects vary by discipline? What might this do to the demand for certain college majors in the U.S.?

Boomers and the dependency ratio

From the Census Bureau.

Cause for concern?

Kristof on Islam and economic growth

Nicholas Kristof has a great column in Sunday's NYT.
Note the role of the accumulation of capital.

He has a brief follow-up in his blog today.

Thursday, March 3, 2011

So much news, so little time...

Sorry for the blogging hiatus. I've been playing catch-up for a couple of weeks now.

There's a lot going on in the world that relates to our class, so let's dig in.

Big stories:

Unrest in the middle east and north Africa continues. What are the implications for those nations and for the rest of us? I'll post links to related stories and analysis soon. Feel free to send me links to what you're reading.

An obvious market connection is that gas prices are rising quickly. What are the implications of energy prices for economic growth and development? Read about it here at the WSJ, here at The Press (New Zealand), and here at the San Francisco Chronicle (note the estimate of a "fear premium" in a linked Business Week story).

In what some are labeling a "Cairo moment", attempts at union-busting are causing a stir in Wisconsin and Ohio. One side of the argument is that state's obligations to public union workers (pensions, health care) are exacerbating budget shortfalls. Curtailing collective bargaining will therefore rein in spending, they say, and help states climb out of severe budget shortfalls.

The other side argues that without unions, the working class will have little political power and will be taken advantage of, resulting in a shrinking middle class and more inequality (among other things). Unions provide a needed balance to the political power of corporations, they say, especially in light of the Supreme Court's recent ruling on political contributions. From this perspective, union busting is simply an attempt at knee-capping the principle contributor to one party's interests. One side says differentiating between private sector and public sector unions is at the heart of the matter, the other side downplays the distinction.

Whether the arguments of 2011 are for budget austerity or simply a political power-play, what role does collective bargaining play in economic growth and development? Read about the issues here at the NYT, here at MSNBC, and here at Fox News.

Here is a pro-union look at income, equality and unions by Ryan Witt at The Examiner. Interesting, but we have to be careful jumping from correlation to causation. Read more on the pro-union perspective here from the Center for American Progress Action Fund. You can also check the AFLCIO for their perspective.

Here is a paper from Holcombe and Gwartney presenting a detailed and non-technical look at the effect of unions on economic growth via their effect on labor laws. The paper provides great information and a thought-provoking thesis. But we have to keep in mind that CATO is a conservative think tank, so as with the links above, you sort of know the conclusions before starting the paper.

Here's a piece from two economists at LSE suggesting the effect of unions is negative, but can be offset.

Here's a link to an old blog post from Greg Mankiw on the subject. Here's a YouTube video of Krugman providing a different perspective and an excerpt from a Krugman interview at AFL-CIO.

Interesting related aside: Matthew Kahn (environmental econ prof at UCLA) has some interesting research related to unions and manufacturing firms' location decisions (and associated pollution).

Taking it one step further, if this is about politics then we have to think about how (and if) political regimes are related to economic growth.

OK, that's a ton of reading... I don't expect you to get through it all in one sitting, by try to consider both sides of the arguments and give thought to what we know and what we don't know. Like most of the issues under study this semester, these are complex and opaque relationships, and there are strong opinions on both sides.

Thursday, February 10, 2011


Here is a link to Kuznets' AER paper.

The full citation is:

Kuznets, S., 1955. "Economic Growth and Income Inequality". The American Economic Review, Vol. 45, No. 1, pp. 1-28.

What does he say about measuring inequality?
What does he say about the causes of inequality as related to economic growth?
Other important considerations?

Monday, February 7, 2011

Technological change and economic growth

Tyler Cowen (econ prof at George Mason) argues in a recently released e-book ("The Great Stagnation") that technological change has reached a plateau. As a result, he argues that economic growth and improvements in living standards will slow dramatically in the coming years.... unless we do something.

His basic thesis that we've consumed all the low-hanging fruit, especially with regard to innovation that results in public goods in the areas of health, education and infrastructure. The most recent "big idea" is of course the internet, which despite our expectation to the contrary, has failed to deliver much of anything in terms of real improvements in productivity and economic growth according to Cowen.

Here's an interview with Cowen at the NYT.

Here's an article at the WSJ.

The Atlantic has an interesting article discussing technological change in kitchens.

More good reading on the topic here from Forbes.

Here's a 30-minute interview with Cowen at The American Enterprise Institute.

What is Cowen's solution?

How can we frame this discussion in terms of the Solow model?

What are some criticisms of Cowen's thesis?

What are the big productivity-enhancing innovations in history, and when did they occur?

Tuesday, February 1, 2011

Wednesday, January 26, 2011

Interesting article about the HDI

Cuba not in the 2010 HDI.

Here's the story.

How was Cuba doing prior to 2010?

Tuesday, January 25, 2011

Predicting political unrest

This is pretty cool. You gotta love statistics. Using 20 years of publicly available data from 150 nations, researchers at Kansas State University have developed a model to forecast civil unrest.

Named "The Predictive Societal Indicators of Radicalism Model of Domestic Political Violence Forecast", the model uses measures of coercion (motivation or fuel for the fire), coordination (ability of the populous to mobilize) and capacity (ability to dampen the intensity of protest) to predict which nations are likely to experience domestic civil unrest.

The article notes that they're 5 for 5 in their predictions so far, but considering what's happening in Egypt right now it looks like we can say they're 5 for 6. Notice the importance of Twitter. We'd categorize that under coordination.

Thanks to Ryan H. for the lead.

Monday, January 24, 2011

Global prosperity

Real Clear World has some cool graphics to play around with...

Click here to view the top 10 most prosperous nations in the world (click country #10, country #9, etc on the left to view some basic stats about each).

Look below for other interesting questions. I haven't read through all of these.

Why Tunisia is different

From Robert Kaplan of the NYT.

Favorable history, geography, and an initial focus on development as a means to growth (rather than the other way around) by Bourguiba - before things eventually turned bad under Ben Ali... contrast these with some of Tunisia's neighbors.

Friday, January 21, 2011

Links from class

CPI inflation calculator from BLS. See how far a dollar went back in the day.

Currency converter (use for official exchange rates).

Thursday, January 20, 2011

Cool gapminder video on YouTube

Click here. Hans Rosling is a hoot.

PPP from the IMF

Here's a short and useful article about purchasing power parity from the IMF.

Read about the Big Mac index at The Economist here, here and here.

Friday, January 14, 2011

Conflict in Tunisia

Read about the recent rebellion in the north African nation here at Time Magazine , here at the Washington Post and here at the Guardian.

Interesting to contrast today's state of affairs with conditions just a couple of years ago.

Here is a map showing Tunisia's location.

What's at issue? Acute problems are unemployment, food prices and by extension, food security. More generally, it's about freedom.

Collier discusses the "conflict trap" in The Bottom Billion and notes that a large part of the economic costs of rebellion and civil war are realized long after the rebellion is over. We'd call this a lag effect, where today's actions have implications for tomorrow's outcomes. Perhaps more important for Tunisia, Collier finds that rebellion most often does not result in improvements in the conditions that ostensibly spawned the rebellion to begin with. Indeed, he notes that civil war can be the start of a long process of "development in reverse". Importantly for the rest of us, he finds that civil wars and rebellions result in adverse spillover effects on the region, often extending into high-income countries. Check out that map again. Also consider that nations in the EU are Tunisia's principal trade partners.

It's important to point out that Collier's work is based on analysis of many countries, and the results do not serve to predict what will happen in a particular situation. Rather, they should be interpreted as what is likely to occur on average. Let's hope Tunisia is an exception.

For more reading, here's a relatively short piece by Collier on economic development and conflict.

Wednesday, January 12, 2011


Welcome to ECN 429.

Let's get started...

Check out the Millennium Development Goals at the U.N.

Explore facts and statistics (use the drop down boxes) at NationMaster.

The interactive World Development Indicator maps from World Bank are pretty cool (scroll down and click a topic).

Read some stuff by Nicholas Kristof.

Read some old posts from this blog.