Tuesday, March 31, 2009
Monday, March 30, 2009
paradox
I am, obviously, too emotional to study economics, while I am too rational to do literature criticism either(rational in the sense that I have high requirements on logical reasoning)...
Sounds familiar? I hope Wang Guowei would not have felt like losing his face if he sees this in heaven.. :)
Sounds familiar? I hope Wang Guowei would not have felt like losing his face if he sees this in heaven.. :)
encouraged
I'm really encouraged to see many (about seven) Chinese economists included on the list for top young economists!!
Excellent! They are models for me!
Excellent! They are models for me!
Referee report (I know it's boring)
For AJR2001..
Referee Report
The paper estimates the impact of institution on economic performance, using European mortality rate in the colonized country as the instrumental variable. The conclusion is that in colonies where Europeans faced high mortality rates, they could not settle and were more likely to establish extractive institutions, which persisted till the present and therefore have large impact on current economic performance. The paper also shows that once the effect of institutions on economic performance is controlled for, neither distance from the equator nor the dummy for Africa is significant.
The major contribution of the paper to the broader literature on new institutional economics, development economics and economic history is that it provides reliable quantitative estimates of the role of institutions on economic growth. By implementing the instrumental variable, it solves the causality problems that rich countries may be able to afford better institutions and that higher GDP growth and better institutions could be consequences of some other variables. Existing literature that study the influence of colonial experience on institutions focus on the legal origin and identity of colonizers. In contrast, this paper emphasizes the conditions in the colonies.
The distinctive feature of the methodology is the clever use of instrumental variable to solve the endogeneity problem. A major concern related to the validity of IV is the exclusive restriction that settler mortality rates have no effect on GDP per capita today other than their effect through institutional development. By arguing that the diseases (malaria and yellow fever) are unlikely to be the reason why many African and Asian countries are so poor today, they show the exclusive restriction is plausible. Moreover, table 4 in section III convincingly demonstrates that the relevance condition required by the IV methodology holds. Table 4 also shows the difference between the IV method and OLS method and proves that the role of institutions is downward biased under the OLS approach.
The paper also tests other hypotheses from previous studies. For example, the regression results show that latitude is considered as a significant determinant of economic development by previous studies may be because it’s correlated with institutions. Through the robustness check, it suggests that the identity of colonizers is not an important determinant of colonization patterns. Other control variables like religions, climate, European descent, ethno linguistic fragmentation and geography/health don’t change the result much.
The paper has the following problems in the narrative section as well as the empirical section. Let’s examine them following each step within the mechanism proposed by the authors. First, the proxy for settler mortality rates is the annualized death rate among one thousand soldiers. Though it’s probably true that most of the deaths were caused by diseases like malaria and yellow fever, the author didn’t give a clear account about the faction of deaths caused by other factors, such as wars, rebellions and violence. It’s possible that in some areas, violence and wars were the dominating determinants of the mortality of soldiers. So it would be helpful if the authors could provide figures about the fraction of each of these causes for death. Moreover, the authors emphasized that the diseases were more harmful to children than to adults. Did European settlers care more about the infant/children death or adult death? Another concern might be how diverse the geographic characteristics were within the same country. A large country may have both high infection areas and low infection areas. How would the settlers decide on the overall state policy under this unbalanced situation?
Secondly, the narrative story about the types of colonization and settlements on page 1374 should be made more relevant to the mechanism proposed in the paper. The authors discuss the difference between the extractive institutions and institutions establishing property rights. But they didn’t relate these differences to the disease-caused-mortality story in the previous section. It would be very convincing if the authors could give some qualitative examples showing how settler’s policies were indeed influenced by diseases hence mortality rates in the colonies. Instead of doing this, they only give an example of Spanish and Portuguese colonization and the extraction of gold, which is loosely related to the main story about the important use of IV.
Thirdly, as admitted by the authors, the proxy for current institutions has only one dimension. State policy contains a huge range of issues. The measure of property right protection also has lots of alternatives other than protection against expropriation and constraint on executive. Would the results be robust to these different proxies? Were there important events in a country that might have changed the persistence of institutions since independence? For example, the anticipation of Hong Kong’s return to China should have very large influence on its institutions.
Fourthly, it would be clearer for readers to see how the regression results have changed using the IV approach in a figure with comparisons.
And finally, one of the instrumental variables for health in table7 is the distance from coast. The authors can provide some explanation about how this IV might be correlated with health conditions.
Referee Report
The paper estimates the impact of institution on economic performance, using European mortality rate in the colonized country as the instrumental variable. The conclusion is that in colonies where Europeans faced high mortality rates, they could not settle and were more likely to establish extractive institutions, which persisted till the present and therefore have large impact on current economic performance. The paper also shows that once the effect of institutions on economic performance is controlled for, neither distance from the equator nor the dummy for Africa is significant.
The major contribution of the paper to the broader literature on new institutional economics, development economics and economic history is that it provides reliable quantitative estimates of the role of institutions on economic growth. By implementing the instrumental variable, it solves the causality problems that rich countries may be able to afford better institutions and that higher GDP growth and better institutions could be consequences of some other variables. Existing literature that study the influence of colonial experience on institutions focus on the legal origin and identity of colonizers. In contrast, this paper emphasizes the conditions in the colonies.
The distinctive feature of the methodology is the clever use of instrumental variable to solve the endogeneity problem. A major concern related to the validity of IV is the exclusive restriction that settler mortality rates have no effect on GDP per capita today other than their effect through institutional development. By arguing that the diseases (malaria and yellow fever) are unlikely to be the reason why many African and Asian countries are so poor today, they show the exclusive restriction is plausible. Moreover, table 4 in section III convincingly demonstrates that the relevance condition required by the IV methodology holds. Table 4 also shows the difference between the IV method and OLS method and proves that the role of institutions is downward biased under the OLS approach.
The paper also tests other hypotheses from previous studies. For example, the regression results show that latitude is considered as a significant determinant of economic development by previous studies may be because it’s correlated with institutions. Through the robustness check, it suggests that the identity of colonizers is not an important determinant of colonization patterns. Other control variables like religions, climate, European descent, ethno linguistic fragmentation and geography/health don’t change the result much.
The paper has the following problems in the narrative section as well as the empirical section. Let’s examine them following each step within the mechanism proposed by the authors. First, the proxy for settler mortality rates is the annualized death rate among one thousand soldiers. Though it’s probably true that most of the deaths were caused by diseases like malaria and yellow fever, the author didn’t give a clear account about the faction of deaths caused by other factors, such as wars, rebellions and violence. It’s possible that in some areas, violence and wars were the dominating determinants of the mortality of soldiers. So it would be helpful if the authors could provide figures about the fraction of each of these causes for death. Moreover, the authors emphasized that the diseases were more harmful to children than to adults. Did European settlers care more about the infant/children death or adult death? Another concern might be how diverse the geographic characteristics were within the same country. A large country may have both high infection areas and low infection areas. How would the settlers decide on the overall state policy under this unbalanced situation?
Secondly, the narrative story about the types of colonization and settlements on page 1374 should be made more relevant to the mechanism proposed in the paper. The authors discuss the difference between the extractive institutions and institutions establishing property rights. But they didn’t relate these differences to the disease-caused-mortality story in the previous section. It would be very convincing if the authors could give some qualitative examples showing how settler’s policies were indeed influenced by diseases hence mortality rates in the colonies. Instead of doing this, they only give an example of Spanish and Portuguese colonization and the extraction of gold, which is loosely related to the main story about the important use of IV.
Thirdly, as admitted by the authors, the proxy for current institutions has only one dimension. State policy contains a huge range of issues. The measure of property right protection also has lots of alternatives other than protection against expropriation and constraint on executive. Would the results be robust to these different proxies? Were there important events in a country that might have changed the persistence of institutions since independence? For example, the anticipation of Hong Kong’s return to China should have very large influence on its institutions.
Fourthly, it would be clearer for readers to see how the regression results have changed using the IV approach in a figure with comparisons.
And finally, one of the instrumental variables for health in table7 is the distance from coast. The authors can provide some explanation about how this IV might be correlated with health conditions.
Sunday, March 29, 2009
Tolstoy's Last Diaries
Such a great man can be messy and unorganized and as regretful as I am..He also had unkind feelings and felt ashamed with himself.
Now I feel a little bit better.
I am amazed by how similar some of Tolstoy's thoughts are to mine. It's such a coincidence that I picked up his diary at this moment:
"Our life is quest for gratification. There is physical gratification in health, in satisfying the lusts of the body, in wealth, sexual love, fame , honor, power. All these gratifications 1) are outside our control, 2) may be taken away from us at any moment by death, and #) are not accessible to everyone. "
Now I feel a little bit better.
I am amazed by how similar some of Tolstoy's thoughts are to mine. It's such a coincidence that I picked up his diary at this moment:
"Our life is quest for gratification. There is physical gratification in health, in satisfying the lusts of the body, in wealth, sexual love, fame , honor, power. All these gratifications 1) are outside our control, 2) may be taken away from us at any moment by death, and #) are not accessible to everyone. "
Saturday, March 28, 2009
The major weakness is being unpredicatable and hence unreliable.
The golden rule is to let time smooth "unpredictability" and try to behave consistently...
The golden rule is to let time smooth "unpredictability" and try to behave consistently...
be ware of this
reminder:
“怒伤肝，悲胜怒”、“喜伤心，恐胜喜”、“思伤脾、怒胜思”、“忧伤肺，喜胜忧”、“恐伤肾，思胜悲”
It consumes as much energy to recover from euphoria as from depression.
“怒伤肝，悲胜怒”、“喜伤心，恐胜喜”、“思伤脾、怒胜思”、“忧伤肺，喜胜忧”、“恐伤肾，思胜悲”
It consumes as much energy to recover from euphoria as from depression.
long term plans
Last night I dreamed that a university in Singapore gives me an offer. But I was reluctant to accept it.
I genuinely don't want to go back to China after I graduate. It's not about material well being, it's about intellectual resources.
I once told a professor that reading New York Times in China is such a fancy habit.It exhisbits taste and status. I said: All these resources that you Americans have taken for granted are so precious to me. I don't want to lose them again. I don't want to be isolated.
I have heard too many stories that some fifty years ago those brilliant Chinese scholars who had already established themselves in the U.S. academia went back to work for their country and had no way to pursue their research and lost their leading status gradually.Not to mention the Cultural Revolution. This is what I fear. It's true that nowadays things are quite different. Chinese universities are open to the world. They are rich enough to invite great scholars. To be honest,most of the scholars I met in Wuhan University are more famous than my professors here. So what? I felt lonely in Wuhan,intellectually speaking. Instead, I love my department here, because all the professors are so nice and encouraging. They can instruct me and help me.
I simply told Prof. C that if I go back, I won't be able to read his Marginal Revolution, as it's blocked. I will be marginalized and helpless. My academic career will be ruined. I cannot afford this. What's the use of my skills that I have acquired here if I go back? I don't need these to get a decent job or to get promoted. What's the meaning of studying hard here if these won't matter in the future? Do I come here just for fun, to enjoy the exotic culture,or to see the outside world?
It's not true that I don't want to "work for" my country. I am as concerned as always about the changes happening in China. I need to be independent to criticize and appreciate those changes.
How long does it take to change the corrupted bureacratic education system in China? I cannot predict. How long does it take to clear the envoronmnent of plagirism there? I cannot tell either.
I genuinely don't want to go back to China after I graduate. It's not about material well being, it's about intellectual resources.
I once told a professor that reading New York Times in China is such a fancy habit.It exhisbits taste and status. I said: All these resources that you Americans have taken for granted are so precious to me. I don't want to lose them again. I don't want to be isolated.
I have heard too many stories that some fifty years ago those brilliant Chinese scholars who had already established themselves in the U.S. academia went back to work for their country and had no way to pursue their research and lost their leading status gradually.Not to mention the Cultural Revolution. This is what I fear. It's true that nowadays things are quite different. Chinese universities are open to the world. They are rich enough to invite great scholars. To be honest,most of the scholars I met in Wuhan University are more famous than my professors here. So what? I felt lonely in Wuhan,intellectually speaking. Instead, I love my department here, because all the professors are so nice and encouraging. They can instruct me and help me.
I simply told Prof. C that if I go back, I won't be able to read his Marginal Revolution, as it's blocked. I will be marginalized and helpless. My academic career will be ruined. I cannot afford this. What's the use of my skills that I have acquired here if I go back? I don't need these to get a decent job or to get promoted. What's the meaning of studying hard here if these won't matter in the future? Do I come here just for fun, to enjoy the exotic culture,or to see the outside world?
It's not true that I don't want to "work for" my country. I am as concerned as always about the changes happening in China. I need to be independent to criticize and appreciate those changes.
How long does it take to change the corrupted bureacratic education system in China? I cannot predict. How long does it take to clear the envoronmnent of plagirism there? I cannot tell either.
about the entrance exam
Today we were talking about some interesting topics about Asian students. A Korean friend said Korean kids don't eat breakfast because high school begins at 6am. So even they go to college, the habit of not having breakfast still persists.
We Chinese also have fierce competition for college entrance. I was thinking that maybe I could run some regression to see how people's habit of taking breakfast may correlate with entrance exams in Asia. :)
It's interesting to think about these questions.
We Chinese also have fierce competition for college entrance. I was thinking that maybe I could run some regression to see how people's habit of taking breakfast may correlate with entrance exams in Asia. :)
It's interesting to think about these questions.
Friday, March 27, 2009
plans
I am going home in May. I wanna be home!!!!!!!!!!
A mere thought about being at home thrills me!
I am now drunk without alcohol because of the exultance. I don't want to sleep. I want to dance.
All the courses are going well this semester. I am in very good relationship with five(six?) professors here. And I plan to increase this number to ten next semester.:) Some of them have agreed to collaborate with me in the future. They each have their comparative advantage, and I am learning different things from different people. For example, Prof. N is good at thinking of the big picture about political economy and he always pushes me to reach the very essence. Prof. H is a science geek and has amazingly "bold" imaginations. We often chat via facebook. Prof. C has unsurpassable sense of balance and he combines the dismal science with humanity sooooo well. He is a live dictionary. Prof. R is one of the most approachable and generous person I have never known. He gave me a ride last time in his BMW. I didn't do that well on Macro, but we still share lots of common interests. He speaks pretty good Chinese. Prof. T is a practical person. I enjoyed his class very much. His lectures are so clear and well organized. His ideas and methods trigers my interest in law and economics. And Prof. L, who is my all time favorite, takes care of me like a father. I really cannot express how grateful I am to his kindness. I owe him so much that I don't know how to pay back.
Next semester I'll take an American economic history course, two econometrics courses(!). May take one consortium course in George Washington.. I need to strengthen my techniques more..
Come up with interesting ideas ,make them rigorous through hard thinking and realize them using techniques.
A mere thought about being at home thrills me!
I am now drunk without alcohol because of the exultance. I don't want to sleep. I want to dance.
All the courses are going well this semester. I am in very good relationship with five(six?) professors here. And I plan to increase this number to ten next semester.:) Some of them have agreed to collaborate with me in the future. They each have their comparative advantage, and I am learning different things from different people. For example, Prof. N is good at thinking of the big picture about political economy and he always pushes me to reach the very essence. Prof. H is a science geek and has amazingly "bold" imaginations. We often chat via facebook. Prof. C has unsurpassable sense of balance and he combines the dismal science with humanity sooooo well. He is a live dictionary. Prof. R is one of the most approachable and generous person I have never known. He gave me a ride last time in his BMW. I didn't do that well on Macro, but we still share lots of common interests. He speaks pretty good Chinese. Prof. T is a practical person. I enjoyed his class very much. His lectures are so clear and well organized. His ideas and methods trigers my interest in law and economics. And Prof. L, who is my all time favorite, takes care of me like a father. I really cannot express how grateful I am to his kindness. I owe him so much that I don't know how to pay back.
Next semester I'll take an American economic history course, two econometrics courses(!). May take one consortium course in George Washington.. I need to strengthen my techniques more..
Come up with interesting ideas ,make them rigorous through hard thinking and realize them using techniques.
Thursday, March 26, 2009
Today Prof. H asked whether we would like to go to Gorbachev's lectures. A female student from Afghanistan said no. She said:"We don't like Russians."
It sounds to me a little bit peculiar, but then I realize that it's just like some Chinese people say they don't like Japanese.
It sounds to me a little bit peculiar, but then I realize that it's just like some Chinese people say they don't like Japanese.
Wednesday, March 25, 2009
strange names
I couldn't help laughing while I saw two strange names showing on the power point slides this afternoon at a seminar.
One name is Slaughter.
The other name is Dollar.
One name is Slaughter.
The other name is Dollar.
Tuesday, March 24, 2009
about fictions
Prof. H raised an interesting point that too many fictions only discuss the small social network rather than the broader society. Actually W.H. Auden has very acute observation on this. He compares Shakespeare's works with Bernard Shaw's and claims that drama became more intellectual and less about the broader world because hiring actors and setting up stage structures were becoming too costly. That's such an interesting insight of economics, raised by a poet!! I love him a lot, despite his homosexuality. :) I always think those real great thinkers should be able to get rid of the established boundary and constraints rooted in their own fields and borrow insights from other disciplines- from the broader world.
Some of my professors are doing really well on this!
Some of my professors are doing really well on this!
Sunday, March 22, 2009
hukou
My professors are talking about "Buy a house,get a visa" policy in the U.S.
http://www.marginalrevolution.com/marginalrevolution/2009/03/buy-a-house-get-a-visa-2.html#comments
I just want to mention that there is a similar policy in China. Here is the excerption from my email to a professor:
China is notorious for its household registration policy, or the Hukou system. http://en.wikipedia.org/wiki/Hukou_system
It creates lots of trouble for rural immigrants.
Recently the Tianjin municipal government announced that those who buy an apartment can get Hukou in that city. I think the logic is the same with the "get a visa" story.
http://www.marginalrevolution.com/marginalrevolution/2009/03/buy-a-house-get-a-visa-2.html#comments
I just want to mention that there is a similar policy in China. Here is the excerption from my email to a professor:
China is notorious for its household registration policy, or the Hukou system. http://en.wikipedia.org/wiki/Hukou_system
It creates lots of trouble for rural immigrants.
Recently the Tianjin municipal government announced that those who buy an apartment can get Hukou in that city. I think the logic is the same with the "get a visa" story.
hard work rewards
I am making real progress in my studies this semester. The ability to frame and analyze a question is improved. In addition, I know what kind of questions are beyond my reach now, and what kind of topics are promising at this stage. I am so glad.
The proposal for my econ history term paper has been approved and praised by three professors. I am greatly encouraged!That's a lot of work to do, of course.
Hard work rewards!!!
The proposal for my econ history term paper has been approved and praised by three professors. I am greatly encouraged!That's a lot of work to do, of course.
Hard work rewards!!!
Saturday, March 7, 2009
the political economy behind the movie Seven Samurai
Its logic is analogous to the paradox of British military spending. On the one hand, the peasants need their protection from the bandits. They have to spend a lot hiring the samurai(just like the heavy taxation borne by British people). The senior man in the village was like a representative of Parliament, deciding how much they could spend. On the other hand, peasants feel threatened by the power of the samurai. They hide their food and pretty daughters. This is like people wanting to cut the budget for national defense. The two social classes, peasants and samurai, depend on each other, and hate each other in some sense. In times of war, they fight together. But the conflicts still exist there.
Akira was able to reveal all the complicated situations and subtle human psychology in these stories. He is one of the greatest directors.
Akira was able to reveal all the complicated situations and subtle human psychology in these stories. He is one of the greatest directors.
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