Nabila Tabassum Chowdhury > Recent Status Updates

"Interestingly, this system may be changing. A substantial part of the business model of two of the world’s most successful companies, Amazon and Alibaba, is to insert themselves in place of these intermediaries by allowing individual producers to build their own reputations on their sites, for a price of course, thereby not requiring certification from the intermediary."

"Everyone invests what they can and leave it to the intermediaries to put the pieces together. This is another reason why the industry needs to be clustered."

"Of course, even such desperate measures may not always save your skin. The overall reputation of the industry matters, and it may take only a few bad eggs to ruin the reputation of an otherwise high-quality industry. Governments, recognizing this, have tried to find ways to penalize individual producers who cheat on quality."

"The presence of some success stories can set off a virtuous cycle."

"This is where it can be very useful to have the right connections: someone who knows you and will vouch for you."

"It’s a vicious cycle. The curse of low expectations can be very hard to overcome."

"However, suspicion of newcomers can also turn into a self-fulfilling prophecy. If almost no one buys the car, the company will collapse and customer service will cease."

"benefitted significantly from the success of older Japanese brands. Conversely, buyers are unlikely to want to try out a car produced in Bangladesh or Burundi, even if it is supposedly made to the most exacting standards, the price is low, and the reviews are good."

"A new Japanese entrant, like Mitsubishi when it first entered the US market in 1982, probably"

"The outsized role of reputation means international trade is not just about good prices, good ideas, low tariffs, and cheap transportation. It is very difficult for a new player to enter and take over a market, because they start without reputation."

"The value of a brand name is that it wards off competition."

"In these two cases there was also someone with vision and talent. But clearly money helped."

"Young firms lacking a reputation need to start with deep pockets."

"for the ultimate consumer, time is money, as is reliability, and it’s money we will never recover. It is not like Amazon will pay Abhijit his hourly wage for his two trips to the grocery store or the two hours spent trying to fix the machine."

"Domestic pressures for protection mount during bad times and safety regulations are often used as an excuse to protect the domestic producers."

"Workers are laid off, retiring workers are not replaced, and wages start to drift down. Business owners take a big hit on their profits, loans get renegotiated, all in order to preserve as much as possible of the status quo ex ante."

"Given these various forms of stickiness, it is plausible that when bad news arrives in the form of greater competition from outside, instead of embracing it and moving resources to their best possible use, there is a tendency to hunker down and hope the problem will go away on its own."

"his is the phenomenon, in banking parlance, of “evergreening” loans, one of the main reasons why so many banks with seemingly impeccable balance sheets suddenly wake up to a looming disaster."

"The one exception, unfortunately, is when loans are about to fail— then bankers actually give the ailing firms new loans to pay back their old ones, in the hope of postponing the default and perhaps benefitting from a reversal of fortune. "

"It is clear that the kind of extreme state control these economies operated under before liberalization was very effective at keeping inequality down, but at a high cost in terms of growth."

"This is because, as Samuelson showed in a later paper, the fact that free trade raises GNP means there is more to go around for everybody, and therefore even workers in the United States can be made better off if society taxes the winners from free trade and distributes that money to the losers."

"Comparative advantage is the idea that countries should do what they are relatively best at doing."

"So is the public simply ignorant, or might it have intuited something the economists have missed?"

"The last two hundred years have given us a chance to refine this theory, but it is a rare economist who fails to be compelled by its essential logic. Indeed, it is so rooted in our culture that we sometimes forget the case for free trade is by no means self-evident."

"In contrast, in the United States the general public opinion about trade is mixed at best, and more often than not these days, negative."

"Ultimately, we also need to remember that many people, regardless of any incentives on offer, will choose not to move. This immobility, which runs against every economist’s instinct of how people should behave, has profound implications for the entire economy."

"The fact that history repeats itself does not make it less unpleasant the second or third time around."

"Given the outsized fear of failure, offering migrants some insurance against failure would be a possibility. When this was offered in Bangladesh, the effects were almost as large as the effect of offering a bus ticket."

"This suggests that encouraging migration, both internal and external, should indeed be a policy priority, but that the right way to do it should be not by forcing people or distorting economic incentives, as has been done in the past, but by removing some of the key obstacles."

"The fear of being overwhelmed is also what gives rise to worries about assimilation. If too many people with a different culture come (from country cousins moving within India to Mexicans settling in the United States), will they assimilate or will they change the culture? Or, for that matter, will they assimilate so well that their culture will vanish, leaving us all with a uniform globalized tasteless blend?"