a. The concept that I learned in this class that I believe will be the most useful and applicable to my understanding of the world would be Central Place Theory. Before this class, I had never known about, and probably had not even heard the words Central Place theory. This theory helps me understand why populations are drawn together through the market. It helps me understand why cities exist where they are, and how things work between them. It was also very interesting to learn about the hierarchy of places.
b. The topics I am interested in learning more about are the topics that Jared Diamond wrote about in his article New World and Old World: Differences. This article was very captivating to me because it answered a question that I hadn't even known had an answer. It delegitimizes scientific racism in one fell swoop. I am eager to learn more on the subject, and have already added Guns, Germs, and Steel to my book list!
c. The advice that I would give a student considering taking this class to not think that it will be a reiteration of Econ 101, as I did. I thought that the content of the class would be just like that in 101, and while some of the course did overlap with 101, I quickly learned about more theories and concepts than I had expected.
Wednesday, May 30, 2012
Tuesday, May 29, 2012
Weekly Blog Post
The African Development Bank is organizing, starting Wednesday in Tanzania, a forum dedicated to Civil Society Organizations in Africa, where around 60 CSOs are expected to show. The forum is directed at discussing challenges and opportunities that Africa faces, particularly opportunities in becoming a green continent. The forum also aims to provide the opportunity to contribute to the long-term strategy that the ADB is developing.
The focus on creating a 'green' Africa relates to the environmental Kuznets curve. As Africa is becoming more and more developed, and the economic climate there keeps growing and growing, demands for cleaner air and water also keep increasing. More government regulation and 'cleaner' cars and other modes of transportation that are emerging on the market are also indicators of a cleaner environment. Also, because of high population growth rates, especially in urban areas, and global-warming related weather changes that affect crop growth and production, a healthier environment is in Africa's best interest.
The focus on creating a 'green' Africa relates to the environmental Kuznets curve. As Africa is becoming more and more developed, and the economic climate there keeps growing and growing, demands for cleaner air and water also keep increasing. More government regulation and 'cleaner' cars and other modes of transportation that are emerging on the market are also indicators of a cleaner environment. Also, because of high population growth rates, especially in urban areas, and global-warming related weather changes that affect crop growth and production, a healthier environment is in Africa's best interest.
Tuesday, May 22, 2012
Beware of Greeks Bearing Bonds
1. A passage that was interesting to me was that hardly anyone in Greece is punished for not paying their taxes. On top of that, I was surprised to learn the amount of corruption in Greece. The author states "People who go to public health clinics assume that they will need to bribe doctors in order to actually be taken care of." He also states that government ministers in public office usually emerge as multi-millionaires will several homes. No wonder the Greek economy is in the state its in!
2. Even though Greece's economy is very small compared to the other European Union economies, the economic problems that exist in Greece threaten the rest of Europe. This is because when Greece's credit ratings fell, it turned government bonds into junk. The IMF and the European Central Bank decided to lend Greece up to $145 billion dollars to make up for it, therefore making Greece a 'ward' of the other states. Also, Greece uses the Euro. Because of the financial state in Greece, the Euro will depreciate, as will investment in the Euro, therefore harming the other countries in the European Union. If Greece walks away from it's nearly $400 billion debt, then the other countries in the Union that are teetering on the edge of bankruptcy run the risk of following.
3. Greece has agreed to an austerity program offered by the EU as a sort of bailout. Austerity is a policy that refers to a policy of deficit cutting by lowering spending. Using the short-run national income model (GDP=G+I+C+NX), I will explain how this will end up contracting the European economy.
GDP=G+I+C+NX
If government spending decreases then it will result in a decrease in GDP. If taxes increase, then consumption in turn will decrease because people will have less money to spend. This will then lead to a decrease in GDP, and effect the other parts of the equation (Investment and Net Exports).
http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010
2. Even though Greece's economy is very small compared to the other European Union economies, the economic problems that exist in Greece threaten the rest of Europe. This is because when Greece's credit ratings fell, it turned government bonds into junk. The IMF and the European Central Bank decided to lend Greece up to $145 billion dollars to make up for it, therefore making Greece a 'ward' of the other states. Also, Greece uses the Euro. Because of the financial state in Greece, the Euro will depreciate, as will investment in the Euro, therefore harming the other countries in the European Union. If Greece walks away from it's nearly $400 billion debt, then the other countries in the Union that are teetering on the edge of bankruptcy run the risk of following.
3. Greece has agreed to an austerity program offered by the EU as a sort of bailout. Austerity is a policy that refers to a policy of deficit cutting by lowering spending. Using the short-run national income model (GDP=G+I+C+NX), I will explain how this will end up contracting the European economy.
GDP=G+I+C+NX
If government spending decreases then it will result in a decrease in GDP. If taxes increase, then consumption in turn will decrease because people will have less money to spend. This will then lead to a decrease in GDP, and effect the other parts of the equation (Investment and Net Exports).
http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010
Monday, May 21, 2012
Weekly Blog Post
http://www.aps.sn/aps.php?page=articles&id_article=96311
Newly elected President, Macky Sall, announced today, Monday, May 21,2010, the establishment of a National Anti-Corruption Committee (OFNAC). The mission of the committee is to fight against corruption and similar offenses in order to strengthen the public governance. The committee will have significant powers including that of self-referral to any inquiry or investigation it deems fit. the OFNAC will also have the power to publish reports.
In other news, President Macky Sall announced the sale of one of the 2 Presidential planes. Sall said that having two planes was wasteful, and that the benefit of the sale of the device will be returned to the people. He also announced a series of other cutbacks to reduce the cost of the lavish lifestyle of the state. This includes such things as removing first class travel for ministers and state officials, and salaries of government ministers and advisors will be revised.
Senegal has heard promises of reduced corruption many times before, especially by the morally questionable former President Abdoulaye Wade. While this committee may seem like another structure destined for anemic funding and ultimately failure, the promise to reduce the cost of maintaining government seems to prove that President Macky Sall actually wants to keep his promise. Sall was born into poverty in Senegal, and worked his way up the ladder into the Presidency. He is a very promising figure for the future of Senegal.
Economically speaking, the construction of an Anti-Corruption Committee that works independently of the government, if implemented correctly, can greatly reduce the amount of corruption in Senegal. Seeing as how that is the greatest obstacle in starting a business in the country, the committee could attract more businesses to the country. This would further establish Senegal in the world economy, and the increased investment will stimulate the economy, leading overall to an increase in Gross Domestic Product.
Newly elected President, Macky Sall, announced today, Monday, May 21,2010, the establishment of a National Anti-Corruption Committee (OFNAC). The mission of the committee is to fight against corruption and similar offenses in order to strengthen the public governance. The committee will have significant powers including that of self-referral to any inquiry or investigation it deems fit. the OFNAC will also have the power to publish reports.
In other news, President Macky Sall announced the sale of one of the 2 Presidential planes. Sall said that having two planes was wasteful, and that the benefit of the sale of the device will be returned to the people. He also announced a series of other cutbacks to reduce the cost of the lavish lifestyle of the state. This includes such things as removing first class travel for ministers and state officials, and salaries of government ministers and advisors will be revised.
Senegal has heard promises of reduced corruption many times before, especially by the morally questionable former President Abdoulaye Wade. While this committee may seem like another structure destined for anemic funding and ultimately failure, the promise to reduce the cost of maintaining government seems to prove that President Macky Sall actually wants to keep his promise. Sall was born into poverty in Senegal, and worked his way up the ladder into the Presidency. He is a very promising figure for the future of Senegal.
Economically speaking, the construction of an Anti-Corruption Committee that works independently of the government, if implemented correctly, can greatly reduce the amount of corruption in Senegal. Seeing as how that is the greatest obstacle in starting a business in the country, the committee could attract more businesses to the country. This would further establish Senegal in the world economy, and the increased investment will stimulate the economy, leading overall to an increase in Gross Domestic Product.
Thursday, May 17, 2012
How Walmart is Changing China
A passage from the reading that I found particularly interesting was the former presence of melamine in milk and baby formula. This dangerous chemical can lead to illness and death, and after 300,000 illnesses and 6 infant mortalities, the Chinese government rearranged it's food inspection system. This is a good example of government response to public outcry. It also shows how the government in China, a country with a seemingly completely open market, is forced to regulate and inspect some products to protect its' consumers.
An example from this reading that demonstrates the interaction between multinational firms, economics, and culture is the example of organic foods in Walmart. Because of widespread distrust of local markets - and their bad reputation for mixing rotten produce in with the bad - consumers rely on big names like Walmart to sell reliable products that are certified organic. With the rising demand for natural and organic products, Walmart has been feeling pressure to make sure these products are available. In 2007, Walmart established the Direct Farm Program which enables the company to work directly with local farms through co-ops. This 'eliminates pieces of the supply chain that are not productive, as well as raising farmer's income... and giving them increased market access.' This also allows Walmart to get fresher produce to cut down on food spoilage to reduce waste and lower prices. With this increased pressure for increased sustainability, Walmart puts pressure on local farms to grow natural and organic products. An example of this is Dalian Glory Times Logistics Company.
In Senegal, multinational firms have impacted economics to an extent. Legislation that allowed foreign trawlers to fish outside Dakar have led to a decline in the amount of fish in the area, better known as tragedy of the commons. This has also affected Senegalese fishing companies by decreasing the supply of fish drastically, and leading to a nation-wide seafood shortage.
An example from this reading that demonstrates the interaction between multinational firms, economics, and culture is the example of organic foods in Walmart. Because of widespread distrust of local markets - and their bad reputation for mixing rotten produce in with the bad - consumers rely on big names like Walmart to sell reliable products that are certified organic. With the rising demand for natural and organic products, Walmart has been feeling pressure to make sure these products are available. In 2007, Walmart established the Direct Farm Program which enables the company to work directly with local farms through co-ops. This 'eliminates pieces of the supply chain that are not productive, as well as raising farmer's income... and giving them increased market access.' This also allows Walmart to get fresher produce to cut down on food spoilage to reduce waste and lower prices. With this increased pressure for increased sustainability, Walmart puts pressure on local farms to grow natural and organic products. An example of this is Dalian Glory Times Logistics Company.
In Senegal, multinational firms have impacted economics to an extent. Legislation that allowed foreign trawlers to fish outside Dakar have led to a decline in the amount of fish in the area, better known as tragedy of the commons. This has also affected Senegalese fishing companies by decreasing the supply of fish drastically, and leading to a nation-wide seafood shortage.
Monday, May 14, 2012
Weekly Blog Post
http://www.aps.sn/aps.php?page=articles&id_article=95989
The post describes an agreement signed between USAID, the African Cashew Alliance, and the West African Development Bank. This was a memorandum of understandin loan of more than 6 billion CFA francs to help the process of cashew production in West Africa. The amount will fund operators and processors of cashews through USAID and the ACA. It includes technical assistance and insurance, as well as installation. By signing this memorandum of understanding, each party has committed itself to work for promoting the cashew industry.
By funding, sustaining, and promoting the cashew industry, the parties involved will help increase the output of cashews, increasing supply of cashews in the region. This could lower the price of cashews and increase the quantity of demand. In theory, this is what would happen. However, this increase in funding would more likely stabilize an already somewhat volatile cashew market.
The post describes an agreement signed between USAID, the African Cashew Alliance, and the West African Development Bank. This was a memorandum of understandin loan of more than 6 billion CFA francs to help the process of cashew production in West Africa. The amount will fund operators and processors of cashews through USAID and the ACA. It includes technical assistance and insurance, as well as installation. By signing this memorandum of understanding, each party has committed itself to work for promoting the cashew industry.
By funding, sustaining, and promoting the cashew industry, the parties involved will help increase the output of cashews, increasing supply of cashews in the region. This could lower the price of cashews and increase the quantity of demand. In theory, this is what would happen. However, this increase in funding would more likely stabilize an already somewhat volatile cashew market.
Thursday, May 10, 2012
Vehicle Market Executive Summary
The country of Senegal has a small, but growing economy.
Senegal’s GDP per capita is slowly rising, and rests now at $1,900 per year. However,
the nation has an unemployment rate of 48%, and 54% of the population is below
the poverty line. Senegal has a population of 12,433,728, and 2,467,400 lives
in the capital of Dakar.
Port Autonome de Dakar, the largest port in Western Africa,
houses a new container terminal that allows post-Panamax containerships, a
fishing port, and a ship repair facility.
Senegal is part of the West African Economic and Monetary Union.
This union includes 8 countries and promotes free movement of goods and
capital. The regional bloc represents 60 million consumers.
However, corruption is the biggest problem when starting a
business in Senegal. Recently, institutions like the National Program for Good
Governance have been created, but lack the funding to prevent large-scale
corruption.
Tuesday, May 8, 2012
Weekly Blog Post
http://www.aps.sn/aps.php?page=articles&id_article=95742
The Policy Network of Fisheries in West Africa said today, May 8, 2012, that they welcomed the Senegalese government's decision to cancel the authorization to fish on the high seas pelagic resources. Senegalese authorities have canceled 29 fishing authorizations granted to foreign trawlers to make fisheries in Senegal more sustainable. For more than ten years, Senegal has been a victim of bad governance leading to a type of 'tragedy of the commons'. The decline of fish stocks have left the resources in a state of overexploitation. The NGO thinks that a fisheries policy "creates wealth and jobs in Senegal through the establishment of a new form of participatory governance where actors are placed in the heart of decisions and actions implemented". This action will ensure adequate provisions for Senegalese households, stabilize Senegal's fishing industry, and support the local economy.
This relates to supply and demand. Before the cancellation of the authorizations, supply of fish was low in Senegal, causing the quantity of supply to move to the left, decreasing the quantity of demand and raising the price. This was an inefficient use of natural resources. Cancelling the authorizations will eventually restore supply of pelagic fish, and the supply curve will return to normal. Price will be lowered, and the quantity of demand will return to the equilibrium.
The Policy Network of Fisheries in West Africa said today, May 8, 2012, that they welcomed the Senegalese government's decision to cancel the authorization to fish on the high seas pelagic resources. Senegalese authorities have canceled 29 fishing authorizations granted to foreign trawlers to make fisheries in Senegal more sustainable. For more than ten years, Senegal has been a victim of bad governance leading to a type of 'tragedy of the commons'. The decline of fish stocks have left the resources in a state of overexploitation. The NGO thinks that a fisheries policy "creates wealth and jobs in Senegal through the establishment of a new form of participatory governance where actors are placed in the heart of decisions and actions implemented". This action will ensure adequate provisions for Senegalese households, stabilize Senegal's fishing industry, and support the local economy.
This relates to supply and demand. Before the cancellation of the authorizations, supply of fish was low in Senegal, causing the quantity of supply to move to the left, decreasing the quantity of demand and raising the price. This was an inefficient use of natural resources. Cancelling the authorizations will eventually restore supply of pelagic fish, and the supply curve will return to normal. Price will be lowered, and the quantity of demand will return to the equilibrium.
Something that I found interesting was the effect of the internet on prices. "The ready availability of price information has not driven prices of identical items into alignment. Price dispersion still exists even though information is available for no cost at all. Some buyers are even still apt to purchase the more expensive item because of laziness.
By transaction costs, the McMillan means the extra costs that arise when buying or selling a good in a market. This includes search costs and evaluation costs. Search costs are the time, money, and effort it takes to find a good. Evaluation costs are the "difficulty buyers have in assessing quality"(McMillan 44). For example, when wandering around a market place, a person might buy the first good that they come across, even if it is more expensive or lesser quality. A different person, on the other hand, might take a really long time finding the best value, but lose more in 'search costs'.
One of the results of imperfect information is overpricing. A lack of information flow can leave the buyer vulnerable to high prices for low quality. If the consumers don't know the different prices offered, than they are willing to buy for what they think is the normal price. If sellers assume this ignorance, than they can hike up the prices for maximum profit to the disadvantage of the customer. Furthermore, some merchants will quote high prices if they know the other merchants are doing the same. This leaves the customer vulnerable.
By transaction costs, the McMillan means the extra costs that arise when buying or selling a good in a market. This includes search costs and evaluation costs. Search costs are the time, money, and effort it takes to find a good. Evaluation costs are the "difficulty buyers have in assessing quality"(McMillan 44). For example, when wandering around a market place, a person might buy the first good that they come across, even if it is more expensive or lesser quality. A different person, on the other hand, might take a really long time finding the best value, but lose more in 'search costs'.
One of the results of imperfect information is overpricing. A lack of information flow can leave the buyer vulnerable to high prices for low quality. If the consumers don't know the different prices offered, than they are willing to buy for what they think is the normal price. If sellers assume this ignorance, than they can hike up the prices for maximum profit to the disadvantage of the customer. Furthermore, some merchants will quote high prices if they know the other merchants are doing the same. This leaves the customer vulnerable.
Wednesday, May 2, 2012
A Fez of the Heart
One passage of the reading that I found particularly interesting was that fezzes were banned from Turkey in 1925. We usually associate the fez with Turkish culture, but it has been almost a century since they were 'bidden' in the country. The fez is associated with the old Turkey, not the new, modern, westernized Turkey.
An example of the interaction between economics and culture is the transition from the 'authentic' Turkey to the Turkey that caters to tourism. This is evident in the mixture of Turkish, American, and German cultures described on the main street. On page 8, the author writes "...The incursions of English and German had rendered Turkish a minority language. The author describes the presence of 'handburgers', and 'doner kebap' being advertised as traditional Turkish cuisine, as well as the European pop music played on the street to block out the sounds of the nearby mosque. Economics and culture interact in two ways in this prologue; resorts in Turkey modernizing in order to attract tourists, and tourists becoming attracted to what they see as 'authentic' Turkish culture(the fez).
The leading destination is Dakar. It is the nations capital, located on the beach, and one of the biggest ports in West Africa. There is an international airport, hospitals, universities, museums, and booming nightlife, and is famous for its large markets. Another popular destination is L'ile de Gorée, or Goree Island. It is located just off the coast of Dakar. It is famous for its history in the slave trade, and is home to the popular pilgrimage site, le Maison des Eclaves(house of slaves). It is a popular destination for African-americans who with to reflect upon their ancestry. Rebta Lake (Pink Lake) is a lake in Senegal that is a shade of red due to its high salt content and unique bacteria. It is a one-of-a-kind, and is the only pink lake in the world. It is also a popular destination for the fascinating salt harvesting that takes place.
An example of the interaction between economics and culture is the transition from the 'authentic' Turkey to the Turkey that caters to tourism. This is evident in the mixture of Turkish, American, and German cultures described on the main street. On page 8, the author writes "...The incursions of English and German had rendered Turkish a minority language. The author describes the presence of 'handburgers', and 'doner kebap' being advertised as traditional Turkish cuisine, as well as the European pop music played on the street to block out the sounds of the nearby mosque. Economics and culture interact in two ways in this prologue; resorts in Turkey modernizing in order to attract tourists, and tourists becoming attracted to what they see as 'authentic' Turkish culture(the fez).
The leading destination is Dakar. It is the nations capital, located on the beach, and one of the biggest ports in West Africa. There is an international airport, hospitals, universities, museums, and booming nightlife, and is famous for its large markets. Another popular destination is L'ile de Gorée, or Goree Island. It is located just off the coast of Dakar. It is famous for its history in the slave trade, and is home to the popular pilgrimage site, le Maison des Eclaves(house of slaves). It is a popular destination for African-americans who with to reflect upon their ancestry. Rebta Lake (Pink Lake) is a lake in Senegal that is a shade of red due to its high salt content and unique bacteria. It is a one-of-a-kind, and is the only pink lake in the world. It is also a popular destination for the fascinating salt harvesting that takes place.
Tuesday, May 1, 2012
Weekly Post
http://www.aps.sn/aps.php?page=articles&id_article=95360
Briefly, this article translates into an entrepreneur in the Matam region of Senegal who is starting an animal feed production company in order to have readily available feed for local farmers and encourage other citizens and farmers to move to this area and invest in local companies. The entrepreneur, Ibrahima Sow, has been encouraging local farmers to grow corn so he can support his business. Sow explains, "I created this company in order to encourage my brothers in the Diaspora who have more money than me to come and invest in the Matam region and help it's people live better." As part of its social policy, the company has given one million two hundred thousand CFA to a local health center to help pay for pharmaceuticals. Within the article, Sow mentions the setback of poor roads in the area.
This company is an example of the strive to create a stronger local economy in Senegal, and applies to Central Place theory. Sow and the company encourage people not only to invest in the company, but to move to the area. The company, just one year old, has 25 employees, but also stimulates the local economy by buying corn and other produce from local farmers. Donating to the local health center improves its' conditions and a sanitary and well-supplied hospital could be incentive for people to move to the Matam region. If the company grows and employs more, it will have a ripple effect on the economy and stimulate population growth in the region. This could also be an incentive for the local government to invest in road construction which will both employ people and encourage further growth to the area. The company will produce feed for poultry, which is also a somewhat large market in the area, and the farmers and the company will be mutually beneficial.
Briefly, this article translates into an entrepreneur in the Matam region of Senegal who is starting an animal feed production company in order to have readily available feed for local farmers and encourage other citizens and farmers to move to this area and invest in local companies. The entrepreneur, Ibrahima Sow, has been encouraging local farmers to grow corn so he can support his business. Sow explains, "I created this company in order to encourage my brothers in the Diaspora who have more money than me to come and invest in the Matam region and help it's people live better." As part of its social policy, the company has given one million two hundred thousand CFA to a local health center to help pay for pharmaceuticals. Within the article, Sow mentions the setback of poor roads in the area.
This company is an example of the strive to create a stronger local economy in Senegal, and applies to Central Place theory. Sow and the company encourage people not only to invest in the company, but to move to the area. The company, just one year old, has 25 employees, but also stimulates the local economy by buying corn and other produce from local farmers. Donating to the local health center improves its' conditions and a sanitary and well-supplied hospital could be incentive for people to move to the Matam region. If the company grows and employs more, it will have a ripple effect on the economy and stimulate population growth in the region. This could also be an incentive for the local government to invest in road construction which will both employ people and encourage further growth to the area. The company will produce feed for poultry, which is also a somewhat large market in the area, and the farmers and the company will be mutually beneficial.
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