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Marc F. Bellemare Posts

Published August 9, 2012

“How Can I Make the Best of My Time in Grad School?”

When you first arrive, read and think widely and exhaustively for a year. Assume that everything you read is bullshit until the author manages to convince you that it isn’t. If you do not understand something, don’t feel bad — it’s not your fault, it’s the author’s. He didn’t write clearly enough.

From one of the best things I have ever read on how to behave as a graduate student, by Yale’s Stephen C. Stearns. The whole thing is written with the same mordant.

Note that the advice above need not be “when you first arrive” (in my case, the entire first year was consumed by core courses), but the sooner the better. I agree with the skeptic angle, though. The earlier you can spot weaknesses in other scholars’ arguments, the better. And lastly, I couldn’t agree more on bad writing (and I’d go even further: do not reward awful writing by citing it).

Here is a little bit more:

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Published August 8, 2012

Roads to Development?

We return to two questions concerning the 19th century U.S. transportation revolution. First, to what extent were transportation improvements responsible for the large changes in the regional distribution of population in the United States and, within regions, for the changes in industry structure? Second, how important were transportation improvements for welfare gains? We find that transport improvements were the key factor driving where people lived and what industry they worked in. We also find that transport improvements were important for welfare gains: Gains over 1840-1860 would have been only half as large if there had been no transportation improvements.

From a new International Economic Review article by Berthold Herrendorf, James A. Schmitz, Jr., and Arilton Teixeira.

The emphasis is mine and, quite frankly, I’m surprised that the effect of transportation improvements on welfare is not larger. Better transportation  decreases transaction costs, which means that for many goods and services, buyers pay a lower effective price (i.e., market price plus transaction costs) and sellers receive a higher effective price (i.e., market price minus transaction costs).

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Published August 7, 2012

What Can We Do About Food Price Volatility?

A new article by Brian Wright, of UC Berkeley, in the World Bank Research Observer:

In the long view, recent volatility of prices of the major grains is not anomalous. Wheat, rice, and maize are highly substitutable in the global market for calories, and when aggregate stocks decline to minimal feasible levels, prices become highly sensitive to small shocks, consistent with the economics of storage behavior. In this decade, stocks declined due to high global income growth and biofuels mandates, making markets unusually sensitive to subsequent unanticipated shocks, including biofuels demand boosts in reaction to high petroleum prices, the Australian drought, and other regional grain production problems. To protect their own vulnerable and politically influential consumers, key exporters restricted supplies in 2007, exacerbating the price rise. Understandably, vulnerable importers are now building strategic reserves. To reduce costs and disincentive effects, reserves should have quantitative goals related to targeted distribution to the most vulnerable in severe emergencies. For countries with significant animal feeding or biofuels industries, options contracts to protect the consumption of the most vulnerable from harvest shocks are likely to be more cost-effective than emergency reserves.