I'm leaving San Francisco tomorrow. My dear friend S, the one whose birthday was yesterday, bought me a fancy going-away dinner (he's a well-paid attorney, so we let him do things like that) which included a bottle of wine (a pinot noir from Oregon! yay!), the majority of which I consumed. So I'm, you know, a bit sloshed right now (and I feel the need to mention again that the wine was from Oregon, because you don't know how hard it is to get wine that's from anywhere other than Napa Valley or Sonoma County when you live in the Bay Area).
Anyway, I'm leaving tomorrow, and I will miss S terribly. I wasn't very sentimental about it when we said goodbye, but I am sad to be leaving him.
I had this whole adventure at the laundromat today. I have some super-concentrated laundry detergent, but remembering that it's super-concentrated is difficult for me, and I'd never been to this laundromat before, so I think I poured the soap in the wrong part of the machine, so I poured more into another part. I was washing a huge load of sheets and towels and stuff, and the bottom line is that I apparently put WAY too much soap in. By the end of the final rinse cycle, things were still quite soapy. So I ran the machine again without putting any more soap in. But after the second run, things were STILL soapy! So I just said screw it and put everything in the dryer anyway. So if I start complaining about a weird skin rash when I get back to San Francisco, it's because of my soapy sheets.
P.S. I got an email from E from Kuala Lumpur, where he had a six hour layover. So far he's survived the trip.
Tuesday, May 30, 2006
Monday, May 29, 2006
packing
Well, I'm almost done packing. I think I will be able to fit everything in one bag and my backpack. I took a picture because I'm really impressed with myself (although I should point out that the bag will be getting much fuller than that, because there's a bunch more clothing that needs to get packed after I wash it). I'm generally pretty terrible at packing light, and I think this is one of the best jobs I've ever done, considering how long I will be gone (of course, I'm not actually done packing yet, so we'll see). It's certainly much easier to pack light when you don't have to bring any sweaters or jeans.
I also managed to get my old laptop back into decent working order (apparently it had some kind of crazy virus, and in addition the hard drive was too full), so I will be bringing it as well. I put Stata on it (that's the statistical software we use to do econometrics), and I'll get Excel from my ma when I get home. I'm very lucky to currently be in possession of two laptops, because I can bring the crappy one to India and not worry about it getting moldy or stolen or something.
Today is the 26th birthday of my dear friend S. Happy birthday! (He probably won't ever read this, but that's okay.)
E left for India tonight. I think he's on a plane on the way to L.A. at the moment. I'm glad he's getting there a week and a half before M and me, because maybe he can get a little bit of a feel for the city and find the office of the NGO we'll be working with and stuff like that.
Sunday, May 28, 2006
the balassa-samuelson effect
I wasn't going to post today, but I just got an email from my dear friend IB (he gets two initials because just "I" would be confusing) in which he complimented me on having a new post everyday. Well, it wasn't so much a compliment as it was just a comment; he is the very busy father of a ridiculously adorable 2-month-old, so he may have just been marvelling at the gobs of free time that I have.
I did little or nothing of interest today. I dyed my hair dark brown, which according to my roots is more or less my natural hair color. What I really need is a hair cut, but I've decided to wait until I get to India in order to take advantage of the economic forces that make a haircut, even a good one, so much cheaper there than here. My best friend Muffin (I'm sure he'd prefer that I just use his real name instead of our mutual term of endearment for one another, but it's more fun this way) used to get fabulous haircuts from one of the best stylists in Sri Lanka for about $10. It's so cheap because the overall wage level in Sri Lanka (or India) is so low relative to that of the US. And the wages are so much lower because productivity in manufacturing (and other sectors in which international trade takes place) is so much lower in India and other developing countries, and wages tend to reflect productivity. But hair stylists, of course, aren't any more productive here than they are in India or anywhere else. They get paid more here only because the overall wage level is higher here. And because services aren't tradable, they don't compete with Indian hairstylists (well, except in my case), so their wages stay higher despite the fact that the service they provide is the same as the service that Indians provide more cheaply. (This is called, as you may have guessed by now, the Balassa-Samuelson effect.)
All of which means that for the first time in my life, I may actually get a really good haircut at a really nice salon, because it will probably still be cheaper than the mediocre, utilitarian "Great Clips" cuts I get here.
I did little or nothing of interest today. I dyed my hair dark brown, which according to my roots is more or less my natural hair color. What I really need is a hair cut, but I've decided to wait until I get to India in order to take advantage of the economic forces that make a haircut, even a good one, so much cheaper there than here. My best friend Muffin (I'm sure he'd prefer that I just use his real name instead of our mutual term of endearment for one another, but it's more fun this way) used to get fabulous haircuts from one of the best stylists in Sri Lanka for about $10. It's so cheap because the overall wage level in Sri Lanka (or India) is so low relative to that of the US. And the wages are so much lower because productivity in manufacturing (and other sectors in which international trade takes place) is so much lower in India and other developing countries, and wages tend to reflect productivity. But hair stylists, of course, aren't any more productive here than they are in India or anywhere else. They get paid more here only because the overall wage level is higher here. And because services aren't tradable, they don't compete with Indian hairstylists (well, except in my case), so their wages stay higher despite the fact that the service they provide is the same as the service that Indians provide more cheaply. (This is called, as you may have guessed by now, the Balassa-Samuelson effect.)
All of which means that for the first time in my life, I may actually get a really good haircut at a really nice salon, because it will probably still be cheaper than the mediocre, utilitarian "Great Clips" cuts I get here.
Saturday, May 27, 2006
bouncy balls
I think this British commercial is like the coolest thing ever. It was shot in San Francisco using absolutely no computer effects. They basically dumped nearly a quarter million bouncy balls out onto the street and filmed it.
E and I were just on the phone discussing whether or not we should try to survive in India without AC. Rooms with AC, while still ridiculously cheap, seem to be about twice as expensive as rooms without. And I don't like the idea of being a spoiled American traveller who has to be comfortable at all times. I guess I'll decide when I get there.
E and I were just on the phone discussing whether or not we should try to survive in India without AC. Rooms with AC, while still ridiculously cheap, seem to be about twice as expensive as rooms without. And I don't like the idea of being a spoiled American traveller who has to be comfortable at all times. I guess I'll decide when I get there.
Friday, May 26, 2006
microfinance
I got my visa for India today. I've never had to get a visa before, because the longest I've stayed in any foreign country other than Mexico is 2 weeks, which is generally a short enough stay as to not require one. This is one of those times that living in San Francisco is nice, because I can just take the bus to the Indian Consulate and stand in line for a while, instead of having to mail off my passport and wait two weeks to get it back.
So, the research we're doing in India is on microfinance, which is essentially small-scale banking services for very poor people. It refers primarily to very small loans to very poor people, also known as microcredit. Microfinance is very "in" right now in the world of development, partly because there's a ton of (mostly anecdotal, but also some empirical) evidence that it helps alleviate poverty, and partly because it is appealing across more or less the entire political spectrum, which is unusual for an economic policy.
I think microfinance is pretty interesting, so I'll talk about it a little. First of all, it's important to know that for a variety of reasons, lots of poor people in developing countries work in the informal sector, which means that they don't have "official" wage-paying work. In many cases they are self-employed in very small-scale businesses; imagine something like weaving baskets and then selling them. The idea is that they can be more profitable in these kinds of activities if they have access to credit, which might allow them to buy more raw materials at one time, or to buy some kind of productive asset like a sewing machine. Essentially, they're the same kinds of reasons why a business in this country would take out a loan. The difference is that since these people are so poor and have such small-scale businesses, they might only need to borrow $200 or $100 or $50.
Regular banks, as you can imagine, don't tend to lend such tiny amounts, because the overhead on a small loan is nearly as much as that of a big loan, but the interest collected is a lot less, so it isn't profitable. Furthermore, it's not like they have FICO scores in, say, rural Bangladesh (which, incidentally, is where microfinance was started), so banks don't know anything about the creditworthiness of poor people with no ties to the formal economy. Most of these people can't offer anything of value as collateral, because in many cases they literally don't have anything of value. As a result of these problems, the poor tend not to have access to credit. If they do, it's often from informal money lenders that charge very high interest rates (and I mean VERY high, like 20% a MONTH).
So microfinance institutions (MFIs), most of which are nonprofit, have been created to provide small quantities of credit to the poor in developing countries (and, in some cases, developed countries as well...there are some MFIs that operate in the US, I think). Most MFIs use a group loan mechanism, where people who want loans organize themselves into groups of, say, five people, and some or all of the five get an individual loan. Everyone in the group essentially cosigns for everyone else's loan, so that if one person doesn't repay the loan, that person's group members are responsible for paying. MFIs tend to have excellent repayment rates (around 95%).
You can probably see why microfinance is so politically popular. Conservatives (and economists) like it because it uses market mechanisms and encourages self-sufficiency. Lefties like it because it's all about individual self-determination and empowerment, especially for women, who are very often targeted by MFIs as clients.
So that's the basic gist of microfinance. I'll get into the specifics of what we're researching later.
p.s. I have this small red beanbag-esque pillow that my dear friend B gave me, and I've been wearing it on my head for most of the time I've been typing this (don't ask me why...I really don't know). I can see myself in the mirror on my closet door, and I look just like one of those mushrooms from Super Mario Brothers.
So, the research we're doing in India is on microfinance, which is essentially small-scale banking services for very poor people. It refers primarily to very small loans to very poor people, also known as microcredit. Microfinance is very "in" right now in the world of development, partly because there's a ton of (mostly anecdotal, but also some empirical) evidence that it helps alleviate poverty, and partly because it is appealing across more or less the entire political spectrum, which is unusual for an economic policy.
I think microfinance is pretty interesting, so I'll talk about it a little. First of all, it's important to know that for a variety of reasons, lots of poor people in developing countries work in the informal sector, which means that they don't have "official" wage-paying work. In many cases they are self-employed in very small-scale businesses; imagine something like weaving baskets and then selling them. The idea is that they can be more profitable in these kinds of activities if they have access to credit, which might allow them to buy more raw materials at one time, or to buy some kind of productive asset like a sewing machine. Essentially, they're the same kinds of reasons why a business in this country would take out a loan. The difference is that since these people are so poor and have such small-scale businesses, they might only need to borrow $200 or $100 or $50.
Regular banks, as you can imagine, don't tend to lend such tiny amounts, because the overhead on a small loan is nearly as much as that of a big loan, but the interest collected is a lot less, so it isn't profitable. Furthermore, it's not like they have FICO scores in, say, rural Bangladesh (which, incidentally, is where microfinance was started), so banks don't know anything about the creditworthiness of poor people with no ties to the formal economy. Most of these people can't offer anything of value as collateral, because in many cases they literally don't have anything of value. As a result of these problems, the poor tend not to have access to credit. If they do, it's often from informal money lenders that charge very high interest rates (and I mean VERY high, like 20% a MONTH).
So microfinance institutions (MFIs), most of which are nonprofit, have been created to provide small quantities of credit to the poor in developing countries (and, in some cases, developed countries as well...there are some MFIs that operate in the US, I think). Most MFIs use a group loan mechanism, where people who want loans organize themselves into groups of, say, five people, and some or all of the five get an individual loan. Everyone in the group essentially cosigns for everyone else's loan, so that if one person doesn't repay the loan, that person's group members are responsible for paying. MFIs tend to have excellent repayment rates (around 95%).
You can probably see why microfinance is so politically popular. Conservatives (and economists) like it because it uses market mechanisms and encourages self-sufficiency. Lefties like it because it's all about individual self-determination and empowerment, especially for women, who are very often targeted by MFIs as clients.
So that's the basic gist of microfinance. I'll get into the specifics of what we're researching later.
p.s. I have this small red beanbag-esque pillow that my dear friend B gave me, and I've been wearing it on my head for most of the time I've been typing this (don't ask me why...I really don't know). I can see myself in the mirror on my closet door, and I look just like one of those mushrooms from Super Mario Brothers.
Thursday, May 25, 2006
chennai
As you may be aware, I'm heading to India to conduct field research for my master's thesis. I'll be working with two other students from my program, M and E (they probably wouldn't mind me using their full names, especially since there are probably like three people reading this, but using just first initials is very J.D. Salinger, don't you think?). We'll be located in and around Chennai, which is a large city (population 7.6 million) on the southeast coast off the Bay of Bengal (see map). Most Chennaiites (yes, that is really what they're called) speak Tamil, but as is common in other parts of India, English is widely spoken as well. (Tamil, for those who are keeping track, is also the language/ethnic identity of the separatists in northeast Sri Lanka, known as the Liberation Tigers of Tamil Elam or LTTE, who are at war with the Sri Lankan government.)
We will be arriving in Chennai at more or less the hottest time of the year. Temperatures will average around 100 degrees Fahrenheit with very high humidity. It will be sort of like being in a sauna with 7.6 million other people and a bunch of mosquitos.
Tune in tomorrow, when I'll explain what E, M, and I are actually going to be doing all summer.
Wednesday, May 24, 2006
adventure
I've been secretly longing to write a blog for a while now, but I feel like I need some sort of justification; that I am literate and have internet access doesn't really seem like enough.
Now I have found that justification: I'm spending two months in India, during which time my life will theoretically be more interesting than it is now. It will be an Adventure, and I will write all about it. Assuming that I can hook my camera to whatever computer I'm using in India, I will also post pictures.
The namesake of this blog is an international macroeconomic concept which explains how a country's trade balance is affected by a change in its exchange rate. This is the gist: If, say, the dollar depreciates (like it just did) we would expect this to make imports more expensive and exports cheaper, meaning that we import more and export less, and our trade balance improves (this is called the volume effect). In the very short-term, however, consumers, exporters, and importers don't immediately adjust their behavior. They keep buying just as many imports, but now the imports are more expensive, so the trade deficit actually gets worse (this is called the value effect). Eventually, patterns do change, and the trade balance improves as expected (theoretically, anyway). The movement of the trade balance over time, down then up, looks like a j, hence the name, j-curve.
The only reason I chose this particular economic concept for the title of my blog is that my name starts with a j.
Anyway, it's two weeks until I leave, but I wanted to get "warmed up". I will try not to fill the entire two weeks with explanations of economic terms.
Now I have found that justification: I'm spending two months in India, during which time my life will theoretically be more interesting than it is now. It will be an Adventure, and I will write all about it. Assuming that I can hook my camera to whatever computer I'm using in India, I will also post pictures.
The namesake of this blog is an international macroeconomic concept which explains how a country's trade balance is affected by a change in its exchange rate. This is the gist: If, say, the dollar depreciates (like it just did) we would expect this to make imports more expensive and exports cheaper, meaning that we import more and export less, and our trade balance improves (this is called the volume effect). In the very short-term, however, consumers, exporters, and importers don't immediately adjust their behavior. They keep buying just as many imports, but now the imports are more expensive, so the trade deficit actually gets worse (this is called the value effect). Eventually, patterns do change, and the trade balance improves as expected (theoretically, anyway). The movement of the trade balance over time, down then up, looks like a j, hence the name, j-curve.
The only reason I chose this particular economic concept for the title of my blog is that my name starts with a j.
Anyway, it's two weeks until I leave, but I wanted to get "warmed up". I will try not to fill the entire two weeks with explanations of economic terms.
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