Quote of the Week: John Maynard Keynes
“Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”
Quoted in the Financial Times, December 27, 2011
economics
Quote of the Week: Robert Zoellick
"The moods and coalitions of democratic politics matter, so one needs to look beyond textbook economics."
World Bank President
The International Economy, Fall 2011
Join us to Discuss Bangladesh's Economic Prospects!
We've launched a two-day online discussion on Bangladesh's Economic Growth at the World Bank Bangladesh Facebook page. Through the online discussion, we hope to initiate dialogue with you on Bangladesh's economy, the possibilities and the binding constraints for its continued growth.
Our economists will answer your questions and moderate the discussion. We encourage you to share your thoughts or ask questions on these pertinent issues and are looking forward to hosting more discussions on different themes.
Join us, leave comments, and invite your friends!
What? Bangladesh's Economic Growth: How can Bangladesh can embark on its journey towards higher growth?
When? August 25 and 26, 2011
We need to know more about how to economically empower women
co-authored with Alaka Holla
Everyone always says that great things happen when you give money to women. Children start going to school, everyone gets better health care, and husbands stop drinking as much. And we know from impact evaluations of conditional cash transfers programs that a lot of these things are true (see for example this review of the evidence by colleagues at the World Bank). But, aside from just giving them cash with conditions, how do we get money in the hands of women? Do the programs we use to increase earnings work the same for men and women? And do the same dimensions of well-being respond to these programs for men and women?
The answer is we don’t know much. And we really should know more. If we don’t know what works to address gender inequalities in the economic realm, we can’t do the right intervention (at least on purpose). This makes it impossible to economically empower women in a sustainable, meaningful way. We also don’t know what this earned income means for household welfare. While the evidence from CCTs for example might suggest that women might spend transfers differently, we don’t know whether more farm or firm profits for a woman versus a man means more clothes for the kids and regular doctor visits. We also don’t know much about the spillover effects in non-economic realms generated by interventions in the productive sectors and whether these also differ across men and women. Quasi-experimental evidence from the US for example suggests that decreases in the gender wage-gap reduce violence against women (see this paper by Anna Aizer), but some experimental evidence by Fernald and coauthors from South Africa suggests that extending credit to poor borrowers decreases depressive symptoms for men but not for women.
Quote of the Week: John Maynard Keynes
"It needs no proof that neither economic activities nor any other class of human activities can rightly be made independent of moral laws."
quoted in the Financial Times,
August 16, 2010
The Primacy of the Individual, Bah Humbug!
Have you put on weight lately? Are you dating someone who knows a friend or two of yours? Are you a little happier or sadder and cannot figure out why? According to authors Nicholas A. Christakis, MD, PhD and James H. Fowler, PhD, it may be your network stupid. In Connected, Christakis and Fowler set out to overturn the notion of the “primacy of the individual.” They suggest that people we do not even see can influence us in ways previously unimagined. Life many not be solely based on me, myself and my decisions. The beginning and end to all of our problems might be our networks.
- Tags:
- Information and Communication Technologies
- University of California San Diego
- The suprising power of our social networks and how they shape our lives
- Suicide
- Social Capital Blog; disease
- Science
- relatinoships
- rational seller
- rational buyer
- psychology
- Oprah
- Nicholas A. Christakis
- little Brown and Company
- law
- James H. Fowler
- Harvard University
- economics
- contagion
- Connections
- Connected
- communication
- Colbert Report
- Christakis lab
- Center for Wireless and Population health Systems
When More Roads Mean More Congestion
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| More congestion follows more roads. Photo Copyright of The Daily Star |
Basic transport economics teaches us that changes in roadway supply have an effect on the change in traffic congestion. Additional roadways reduce the amount of time it takes travelers to make trips during congested periods. As urban areas come closer to matching capacity growth and travel growth, the travel time increase is smaller. In theory, if additional roads are the only solution used to address mobility concerns, growth in facilities has to be slightly greater than travel growth in order to maintain constant travel times.
Adding roadway at about the same rate as traffic growth will only slow the growth of congestion. But all these assume “other things equal”. No, I am not referring to “induced demand” that could potentially make the cure (road) worse than the disease (congestion). I am referring to the competence, or lack thereof, of those who design, build, and operate the facilities in the public sector.
A matter of degrees
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For economists interested in climate change, some news. The long awaited regional version of Bill Nordhaus' DICE model is now out. (Actually it’s been out since February, but I just got to it...) It’s called RICE with the ‘R’ standing for Regional. A quick overview of some of the key results can be downloaded here.
Nordhaus is one of the earliest and most prominent climate modelers in the economics profession. He and Nicholas Stern are often set up as the two book ends of the climate change economists’ spectrum. I believe their differences are not that great.
Disasters: what is the cost ?
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Buried under the most snow since records have been kept, as we are right now in Washington, the mind turns naturally to the effects of extreme weather events. Clearly the impacts for those of us with solid housing and uninterrupted WiFi access are minimal compared with the impacts of extreme weather for most people in the world. But even here we can see a combination of effects -- the costs of closing offices or of running through the whole winter's supply of firewood in one week, at the same time as the economic uptick for those who repair household boilers, restore downed power lines or dig people's cars out of the snow or shovel their sidewalks for a fee. Since climate change is expected to increase the frequency and severity of extreme weather events, figuring out the net cost of natural disasters is an important topic. And figuring out sensible ways to reduce those costs is also going to be increasingly important.
At the World Bank last week, we had an interesting seminar from Stéphane Hallegate from the French International Centre for Research on Environment and Development and the National Meteorology School that shed light on some of these issues. Stéphane has modelled the impacts of a number of natural disasters looking at both the direct costs of the disaster (how much does it cost to rebuild structures that were destroyed?) and the indirect costs (what is the cost of a business being closed for several months net of any local economic benefits that may occur as reconstruction starts).
How Can Economists Change the World?
Economists dominate international development, and, in the case of the World Bank, well, that is an instance of full spectrum dominance. In an article in Public Choice (2010) 142:1-8, titled 'Persuasion, slack, and traps: how can economists change the world?', Bryan Caplan has some bad news as well as some good news.
The bad news is a restatement of the argument of his The Myth of the Rational Voter (Caplan 2007): "I argue that economically inefficient policies survive by popular demand. The public systematically misunderstands economics - and probably many other policy relevant subjects - leading voters to support policies contrary to their best interests. I also maintain that the public's misconceptions are, in a sense, wilful. Most people embrace political and economic beliefs on the basis of their emotional appeal, not dispassionate analysis."
The Nobel Prize Committee pays attention to governance of the commons
The Nobel Prize in Economic Sciences is being shared this year by Elinor Ostrom, a political economist at Indiana University, and Oliver Williamson, an economist at UC Berkeley. The award could not be more appropriate in these times of rethinking what markets can and cannot do.
The award to Ostrom, who has spent her professional life studying how societies manage common resources is particularly relevant as we draw closer to the Copenhagen summit and countries are busy defining what they are willing to do to protect the global atmospheric commons.
In fact, Ostrom wrote a background paper for us earlier this year for the World Development Report 2010: Development and Climate Change. In it, she took exception to the notion that a solution to global change must be global. Such a solution would take too long, she argued. She also reminded us that a solution negotiated at the global level, if not backed up by a variety of efforts at the national, regional, and local levels, was not guaranteed to work well. This is because climate change is the result of many individual and local decisions.
Smaller South Asian nations not immune to the effects of global financial crisis
The smaller economies of Bangladesh, Nepal, and Sri Lanka continue to show optimism for their economies based on good remittance inflows and export indicators that demonstrate strong growth in 2008. Policymakers have used these statistics as evidence to believe that they have been relatively unaffected by the current global downturn.
Economics Discovers Accountability
Paul Collier, renown economist and author of The Bottom Billion, promotes accountability to be one of the two vital public services that a state should provide to its citizens.
Global Financial Crisis: How should South Asia respond?
The global financial crisis hit South Asia at a time when it was barely recovering from a severe terms of trade shock resulting from the global food and fuel price crisis.The food and fuel price shocks had badly affected South Asia, with cumulative income loss ranging from 34 percent of 2002 GDP for Maldives to 8 percent for Bangladesh. Current account and fiscal balances worsened sharply and inflation surged to unprecedented levels.