hope.

Thoughts on The Absurdity of Existence

The author once wrote about the absurdity of existence, which basically argues that having purposes and finding meaning in life could be related to that absurdity and be some coping mechanisms in facing uncertain events. Yet, the absurdity of existence, which in this post refers to the contradictions and anomalies that appear in moral, social, and personal experience, can be reflected in the cases of spectrum and dichotomy, paradox and oxymoron, puzzles, et cetera. A simple instance, it seems absurd that in the same world where some people are starving, other people have obesity issues. While these absurdities might not exist for the purpose of benefiting humans, individuals can still derive insight, resilience, and compassion from confronting them.

First of all, take the example in the case of dichotomy, where injustice appears to prevail. Under the sun, in the place of judgment, wickedness was there, and in the place of righteousness, iniquity was also there. Although one should be careful in defining justice and fairness, it is commonly agreed that a set of rules can clearly determine the occurrence of a violation, which could lead to unjust practices. On the other hand, while it is defined that love does not rejoice about injustice but rejoices whenever the truth wins out, it is undeniable that, de facto, in the same world, injustice happens oftentimes. If one has love, then he/she would not be glad about injustice and uneven practices in every event and chance in life. Nonetheless, this does not mean that he/she could not be pleased or rejoice at all, since it is worth noting the relieving part that the truth wins out most of the time.

I perceived that nothing is better than that a man should rejoice in his own works, for that is his heritage.

Uncertainty, ambiguity, and risk illustrate how life often operates on a spectrum rather than through simple yes-or-no answers. Uncertainty, ambiguity, and risks are not firm yes-or-no cases, but instead, they tend to be more of a spectrum of possibilities. They are enigmas, which could be challenging and uneasy, but they could also spark excitement and present opportunities. Things that one thinks are seemingly good might actually be the reverse, vice versa. For example, while struggles and sufferings train oneself in resilience, perseverance, and persistence, comfort zones could be a calm before a storm. These absurdities, therefore, could teach one to keep carrying on, always hopeful, and endure through every circumstance.

To conclude, the absurdities of existence are real and undeniable. Some things are comprehensible, but more things are still puzzles. However, these should not prevent one from rejoicing and enjoying his/her existence. Many individuals might solely recognize the value of patience, compassion, or perseverance after encountering situations that seemed unfair or incomprehensible at the time. Having purpose and meaning is one thing; cultivating awareness and drawing lessons from life’s absurdities is another. Both are complementary and of importance — the former could be the necessary condition by giving direction, and the latter could be the sufficient condition by providing depth and resilience.

Institutions and Commodity Exports of Indonesia

Institutions have been argued to shape economic performance. Countries with effective governments, transparent regulations, and credible legal systems generally experience faster growth, attract greater investment, and trade more with the rest of the world. Primary commodities, including agricultural products, minerals, and energy resources, continue to account for a substantial share of exports in many developing economies. Their competitiveness depends not only on production costs and natural resource endowments but also on governance, regulatory certainty, and the institutional environment in both exporting and importing countries.

Recent evidence from Indonesia suggests that institutional quality matters for primary sector exports, but the magnitude of the implications of its dimensions is not uniform. While better regulatory quality and government effectiveness consistently support export performance, improvements in corruption control and the rule of law do not necessarily generate the same outcomes. Moreover, differences in institutional quality between trading partners can themselves facilitate trade, challenging the conventional wisdom that institutional similarity is always preferable.

Institutions Influence Trade Beyond Tariffs and Infrastructure

Traditional gravity models explain bilateral trade largely through economic size and geographical distance. Larger economies trade more, while greater distance raises transport costs and reduces trade flows. Over the past two decades, however, economists have increasingly recognised that institutions constitute another important determinant of international trade. Efficient governments reduce administrative costs, transparent regulations lower uncertainty, and credible legal systems strengthen contract enforcement. Together, these institutional characteristics reduce transaction costs that are often invisible but economically significant.

These considerations may be particularly important for primary commodities. Unlike manufactured products, commodity exports are highly exposed to volatile world prices, changing regulations, sanitary standards, and environmental requirements. Exporters therefore depend on institutional frameworks capable of providing predictable policies, facilitating certification, and reducing uncertainty in cross-border transactions.

Indonesia offers an informative case study. Between 2013 and 2022, primary sector products, including agriculture, mining, and energy, accounted for more than half of the country’s merchandise exports despite gradual structural transformation towards manufacturing. This continued dependence raises an important policy question: which institutional dimensions matter most for sustaining export competitiveness?

Heterogeneous Associations between Institutional Dimensions and Trade

The results suggest that institutional quality should not be viewed as a single concept. Government effectiveness and regulatory quality exhibit the strongest and most consistent positive relationship with primary sector exports. Countries with governments that formulate credible policies, deliver efficient public services, and maintain transparent regulatory systems tend to export more successfully. Regulatory quality appears particularly important. Predictable regulations reduce uncertainty for exporters, facilitate compliance with international standards, and lower administrative costs associated with market entry. This is especially relevant for commodity exporters facing increasingly complex sustainability requirements and technical standards in international markets.

Government effectiveness also matters, although its implications differs between exporters and importers. Better governance among Indonesia’s trading partners is consistently associated with stronger bilateral trade, suggesting that efficient institutions in destination markets facilitate customs procedures, reduce administrative barriers, and improve market accessibility. These findings reinforce an important insight from institutional economics: policy implementation often matters as much as policy design.

Although conventional wisdom suggests that stronger institutions should universally promote trade, the evidence reveals a more nuanced relationship. Improvements in Indonesia’s control of corruption are associated with a weaker relationship with primary sector exports, while improvements in importing countries exhibit a positive association. Likewise, rule of law displays limited direct association within Indonesia but stronger positive relationships when institutional quality improves in destination markets. These results should not be interpreted as suggesting that corruption or weak legal systems benefit trade.

Instead, they likely reflect the distinctive characteristics of commodity markets. Primary commodity exports often rely on long-established commercial relationships, state-owned enterprises, and resource-based comparative advantages that may be less sensitive to certain institutional frictions than manufacturing exports. In addition, institutional reforms frequently involve transitional adjustments that temporarily increase compliance costs before longer-term efficiency gains materialise. The findings therefore suggest that different institutional dimensions are associated with trade through different channels rather than operating uniformly.

Institutional Distance and Trade

Perhaps the most interesting result concerns institutional distance. Most previous studies have argued that countries trade more when their institutional environments become increasingly similar. Similar legal systems, governance structures, and regulatory frameworks reduce uncertainty and lower transaction costs. The findings point towards a different mechanism. When trading partners possess stronger institutional quality than Indonesia, bilateral primary sector exports tend to increase. In other words, institutional differences favouring the importing country are positively associated with trade rather than constituting an obstacle.

This outcome is economically plausible. Countries with stronger institutions generally provide more predictable regulations, higher contract enforcement, better customs administration, and lower commercial risk. These characteristics reduce uncertainty faced by exporters, making it easier for firms from developing countries to access foreign markets despite institutional differences. Institutional asymmetry therefore need not be viewed exclusively as a trade barrier. Under some circumstances, stronger institutions in destination markets can compensate for institutional weaknesses in exporting countries. This finding contributes to an ongoing debate regarding whether institutional convergence is always necessary for expanding international trade.

Although institutions play an important role, conventional determinants of trade remain remarkably robust. Larger economies continue to trade more, geographical distance reduces exports, preferential trade agreements stimulate bilateral trade, and countries without direct maritime access face persistent disadvantages. These results remain highly consistent across all model specifications. The persistence of the traditional gravity model variables suggests that institutional reforms complement rather than replace conventional trade policy. Reducing transport costs, expanding trade agreements, improving logistics, and strengthening export infrastructure remain fundamental components of export competitiveness. Institutions further provide an additional layer of competitiveness by reducing uncertainty and facilitating commercial transactions.

What Does This Mean for Resource-rich Economies?

The findings have broader implications beyond Indonesia. Many resource-rich developing countries continue to depend heavily on commodity exports while simultaneously pursuing industrial upgrading and economic diversification. Institutional reforms therefore become increasingly important not only for attracting investment but also for maintaining export competitiveness during structural transformation. The evidence suggests several priorities. First, policymakers should prioritise improvements in regulatory quality. Predictable regulations, transparent administrative procedures, and efficient implementation appear to generate the largest export benefits.

Second, strengthening government effectiveness may produce larger gains than focusing exclusively on broad governance indicators. Effective implementation of policies often matters more than the formal existence of regulations. Third, institutional cooperation between trading partners deserves greater attention. Rather than viewing institutional differences solely as obstacles, governments should explore mutual recognition agreements, regulatory cooperation, and capacity-building initiatives that allow exporters to benefit from stronger institutional environments abroad.

Institutions Remain Central to Trade Competitiveness

As global trade becomes increasingly shaped by environmental standards, sustainability requirements, and regulatory compliance, institutional quality is likely to become even more important for commodity exporters. The findings suggest that institutions matter, but the extent of the importance of institutional dimensions is uneven. Government effectiveness and regulatory quality consistently support export performance, whereas other governance dimensions operate through more complex mechanisms. Moreover, stronger institutions in destination markets can facilitate trade even when institutional differences remain substantial. For resource-dependent economies seeking to expand exports while moving up global value chains, improving institutional quality should therefore be regarded as an integral component of trade policy rather than simply an element of broader governance reform.

Digital Services Trade, Economic Capacity and Innovation

The rapid expansion of digital technologies has transformed international trade. Services that once required physical proximity, including finance, software development, consulting, engineering, education, and creative industries, can now be delivered across borders through digital networks. As a result, digitally delivered services have become one of the fastest-growing components of global trade. Nonetheless, less is known about the conditions under which digital services trade translates into broader improvements in national economic capacity. Is expanding digital trade sufficient by itself, or do complementary domestic capabilities determine whether countries fully benefit from this transformation?

A recent research study examines these questions by using economic capacity, measured by purchasing-power-parity-adjusted Gross National Income (GNI), which better captures national income available to residents by incorporating cross-border income flows. This distinction is particularly relevant in the digital economy, where value creation, ownership, and income generation increasingly occur across national borders. The evidence shows that digital services trade consistently improves economic capacity. Nevertheless, these gains depend critically on domestic innovation systems and, to a lesser extent, labour-market absorption. Technological innovation emerges as the strongest complementary factor enabling countries to convert participation in digital services trade into higher economic welfare.

Digital Services Trade and Economic Development

Digital technologies have fundamentally altered the nature of international trade. By reducing communication costs, lowering information frictions, and enabling remote delivery of services, digitalisation has expanded opportunities for firms to participate in international markets irrespective of geographic distance. Unlike traditional merchandise trade, digital services trade encompasses activities such as telecommunications, financial services, computer programming, research and development, intellectual property services, professional consulting, engineering, audiovisual production, and education delivered electronically.

These activities exhibit several characteristics that make them particularly attractive as drivers of development. First, digital delivery substantially reduces transaction costs, allowing firms to reach international customers without establishing a physical presence abroad. Second, digital platforms reduce barriers to entry, enabling small and medium-sized enterprises to participate in global markets that large multinational firms previously dominated. Third, digital services generate knowledge spillovers that improve productivity throughout the broader economy rather than benefiting only the exporting sector.

Yet countries differ substantially in their ability to exploit these opportunities. While some economies have developed thriving digital services sectors, others remain only marginal participants despite widespread digitalisation. This suggests that domestic capabilities play an important role in determining whether digital trade translates into sustained economic gains.

Innovation Amplifies the Gains from Digital Trade

Digital services trade has a positive and statistically significant association with economic capacity across countries, with technological innovation substantially moderating this relationship. Economies with stronger research and development capabilities derive considerably larger benefits from digital services trade than countries with weaker innovation systems. This result highlights an important complementarity between international integration and domestic technological capability. Digital trade facilitates access to foreign knowledge, technologies, and markets. However, countries require sufficient innovation capacity to absorb these opportunities effectively. Stronger research systems, greater technological capability, and higher innovative capacity allow firms to adapt imported knowledge, improve productivity, develop new products, and move into higher value-added digital activities. In other words, innovation contributes directly to economic development, while also increasing the returns to participation in global digital markets.

Employment and Innovation Matters

Labour-market conditions also shape the economic impact of digital services trade. Countries with stronger employment absorption generally experience larger gains from digital trade. Expanding digital services creates new employment opportunities through remote work, outsourcing, online professional services, and digitally enabled business activities. These opportunities can increase labour-force participation while generating higher incomes and productivity.

Nevertheless, the moderating role of employment is considerably smaller than that of technological innovation. This distinction is economically meaningful. Digital services trade increasingly relies on knowledge-intensive activities rather than labour-intensive production. Consequently, the ability to innovate appears more important than simply expanding employment. The findings therefore suggest that while job creation remains an important channel through which digital trade contributes to development, innovation has become the dominant mechanism determining long-run economic gains.

Different Development Stages Require Different Policy Priorities

The analysis also reveals substantial heterogeneity across income groups. Among high- and upper-middle-income economies, innovation overwhelmingly dominates employment as the mechanism through which digital services trade enhances economic capacity. These countries already possess relatively advanced labour markets, and additional gains increasingly arise from technological upgrading, research capability, and productivity improvements rather than expanding employment.

In contrast, low- and lower-middle-income economies continue to benefit from both innovation and labour absorption. Innovation remains the stronger complementary factor even in these countries, but employment plays a noticeably larger role than it does in advanced economies. This reflects the dual nature of digital transformation in developing countries. Digital services trade simultaneously creates new employment opportunities while encouraging technological upgrading. Consequently, digital trade provides developing economies with an opportunity to pursue both structural transformation and employment generation. The results suggest that policy strategies should differ according to countries’ stages of development rather than relying on a uniform digitalisation agenda.

Policy implications

The study carries several implications for policymakers seeking to strengthen competitiveness in the digital economy. First, expanding participation in digital services trade should be viewed as a long-term development strategy rather than merely a trade policy objective. Reducing barriers to digitally delivered services, improving digital regulations, and facilitating cross-border data-enabled business activities can contribute to higher national income. Second, investments in innovation ecosystems deserve particular attention. Research institutions, university–industry collaboration, technology diffusion, and research and development incentives substantially increase the returns from digital trade. Countries that invest in innovation are better positioned to transform digital integration into sustained productivity growth.

Third, labour-market policies remain important, particularly in developing economies. Digital skills training, workforce reskilling, and policies that facilitate labour mobility can improve the employment gains generated by digital transformation. Lastly, digital infrastructure continues to underpin the entire ecosystem. Reliable broadband networks, secure internet infrastructure, and widespread digital connectivity remain fundamental prerequisites for countries seeking to participate successfully in the rapidly expanding global market for digital services.

Looking ahead

Digital services trade is reshaping international commerce by allowing countries to exchange knowledge-intensive services with unprecedented speed and scale. The evidence suggests that participation in this growing sector contributes meaningfully to economic capacity, but the magnitude of these gains depends on countries’ domestic capabilities.

Among these capabilities, technological innovation plays the most important role. While employment creation continues to matter, particularly in developing economies, innovation consistently provides the strongest foundation for converting digital trade into long-term improvements in national income and economic welfare. As digital technologies continue to transform global production networks, countries that combine openness to digital trade with sustained investments in innovation are likely to be best positioned to capture the benefits of the digital economy.

Lessons Learned: Decision

Among numerous lessons learned over the past three decades, one valuable lesson is related to decisions. This post discusses decisions and lessons learned from them. It argues that we need to optimise our decisions to maximise our satisfaction in both the current and future periods, giving at least as much value to the future as to the current moment.

The topic of decision-making is imperative to discuss, but relatively underrated. The average adult makes 33,000 to 35,000 total decisions each day, many of which happen automatically and simultaneously. All decisions, from the little to the big ones (in terms of the possible implications and risks), put us on the road, i.e., they lead to consequences, and there is no shortcut or way to avoid. Assuming a rational economic agent, we would want to optimise each decision made in a given time period to maximise our satisfaction. Nonetheless, individuals are sometimes irrational, time-inconsistent, and shortsighted in their time horizon, preventing them from decision optimisation.

The lessons the author learned with respect to decisions:

A regret might be another form of self-blaming, which could be due to (seemingly) wrong decisions in the past state that lead to suboptimal rewards (benefits) and current state. Accordingly, we might need to forgive ourselves (in the past) and let go of the past, taking only lessons from the experience into consideration and valuation for the current and future states and the rewards.
Subject to our resource constraints and conditions, we might want to optimise our decisions at the moment and in the future. Nevertheless, it depends on how patient we are and to what extent we value our future. The more valuable the future, the less discount or compromises are put in the decision-making. Recalling that there are always trade-offs and consequences, the more we value the current moment, the less value we give to the future.
The future is about uncertainty and complexity. Instead of calculating every possible future consequence, we can look one step ahead and estimate the rest to find the best possible “optimal” decision to maximise benefits.
Hence, the objective could be optimising decisions in the current and future periods, given possible choices of action and constraints. In other words, it calculates the value of a state based on the rewards from taking actions and the expected value of future states. The questions that could guide oneself to optimise the rewards in each phase of the time horizon are as follows:
- Current State Value: How good is it to be where I am right now?
- Immediate Reward: What do I get right now by taking an action?
- Future Value: How good will the next situation be?

It is worth noting the caveats of this notion. Firstly, the rewards/benefits could sometimes be unknown. Secondly, the valuation of the current state, rewards, and the future state could be subjective. Thirdly, one should be rational – be time-consistent, long-sighted, and should only aim to optimise their decision and rewards. Lastly, there are still rooms for uncertainty and possibility of external forces like a momentum that are completely exogenous (out of one’s control) and could influence the valuation of the states, decisions taken, and the rewards.

To conclude, decision-making could sometimes be difficult. If we are to be true to ourselves, it is wise and better to make decisions that give an equal value of rewards between the present and the future, even when the future is uncertain. Given different circumstances and starting points individuals have, the basic idea and the leading questions still hold. It could lead to optimal decisions and prevent lamentation and remorse.

Do Trade Barriers Slow Growth? What New Evidence Reveals

A long-standing debate in economics asks whether trade restrictions help or hinder economic performance. A recent study revisits this question with a clear focus: not on prices or welfare proxies, but on what ultimately matters for policymakers—economic growth. Using multicountry data, the study examines how different types of trade restrictions shape growth outcomes across diverse economic contexts.

Rather than treating trade policy as a single concept, import restrictions and export regulatory measures are treated separately. The findings are consistent, with import restrictions being strongly associated with lower economic growth. Policies such as tariffs, import licences, and state import monopolies show particularly large and statistically significant negative effects. These measures tend to raise the cost of imported inputs, limit competition, and reduce productivity. In many cases, they also encourage rent-seeking behavior and weaken incentives for innovation. As a result, rather than protecting domestic industries, import barriers often end up slowing overall economic performance.

By contrast, the results for export-side policies are more nuanced. Certain export regulatory measures, particularly those related to financing and the repatriation of export earnings, are associated with higher economic growth. These policies can strengthen foreign exchange reserves, improve access to credit, and support domestic investment. In turn, this can stimulate production, enhance liquidity in the financial system, and generate broader multiplier effects across the economy. When trade policy is considered in aggregate, however, the overall picture becomes clear: more trade restrictions are linked to weaker economic growth. Even if some export-related measures provide targeted benefits, they are generally outweighed by the broader negative effects of restrictive trade regimes.

An especially important insight from the study is the role of institutions. Governance, measured through indicators such as government effectiveness and regulatory quality, has a direct positive effect on economic growth. At the same time, it also shapes how trade policies work. Interestingly, the study finds that stronger governance can amplify the negative effects of trade restrictions. In countries with effective institutions, policies are implemented more consistently and enforced more strictly, which makes restrictive measures more binding and their economic costs more pronounced.

This finding adds an important layer to the broader institutional perspective. While strong institutions are essential for growth, they do not automatically guarantee good outcomes, especially if the policies being enforced are themselves distortionary. Beyond trade policy and governance, the study also highlights several structural drivers of growth. Foreign direct investment, urbanisation, and domestic consumption are all positively associated with economic performance, reflecting their roles in productivity enhancement and structural transformation. These factors reinforce the idea that growth is shaped by a combination of openness, investment, and institutional quality rather than trade policy alone.

Taken together, the evidence challenges the notion that restricting trade can be an effective strategy for promoting growth. While certain export-supporting measures may offer targeted benefits, broad-based trade restrictions, especially on imports, tend to hold economies back. Higher costs, lower productivity, and reduced competitiveness ultimately outweigh any short-term gains from protection.

The policy implication is straightforward. Countries seeking to accelerate growth should focus less on restricting trade and more on reducing trade frictions, strengthening institutions, and supporting productive capacity. This includes easing import barriers, improving regulatory quality, and expanding access to export financing. In an increasingly interconnected global economy, sustainable growth depends not on limiting trade, but on enabling it.

Revisiting Trade Restrictions and Export Purchasing Power

A recent article in the International Economic Journal revisits a classic question in international economics: do trade restrictions actually improve a country’s welfare? Rather than relying on the traditional terms of trade (TOT) — the ratio of export prices to import prices — the study focuses on a more comprehensive indicator, the income terms of trade (ITT). Using panel data for 139 countries over the period 2008–2021, it examines whether import and export restrictions, as well as governance quality, shape a country’s real purchasing power in global markets.

The distinction between TOT and ITT is crucial. Traditional TOT measures how export prices move relative to import prices. In theory, large countries may use tariffs to influence world prices in their favour. However, higher export prices alone do not guarantee greater national welfare if export volumes decline. ITT, first formalised by Graeme Dorrance, adjusts for this by incorporating export volumes. It captures how many imports a country can actually purchase with its export earnings. A country may experience favourable price movements yet see its real import capacity stagnate or fall if export performance weakens. ITT therefore provides a more accurate picture of trade-related purchasing power.

The study employs the Measure of Aggregate Trade Restrictions (MATR) and detailed indicators of specific policies, including import licences, non-tariff measures (NTMs), tariffs, export licences, and export taxes. To address endogeneity and dynamic effects, the analysis uses the two-step system GMM estimator developed by Manuel Arellano and Stephen Bond. This econometric approach allows the study to isolate the causal relationship between trade policy and income terms of trade across countries with diverse economic structures.

The findings are consistent. Import restrictions are strongly associated with deterioration in income terms of trade. Measures such as import licences, non-tariff barriers, and tariffs show particularly large and statistically significant negative effects. While theory suggests that tariffs may improve price-based terms of trade, the empirical evidence indicates that once export volumes are taken into account, restrictive policies reduce overall export purchasing power. The volume losses appear to outweigh any potential price gains.

Export restrictions also have adverse implications, though their magnitude is generally smaller than that of import barriers. Policies such as export licences, repatriation requirements, and export taxes are linked to lower income terms of trade. In practice, restricting exports can reduce foreign demand, weaken competitiveness, and limit export revenues, thereby diminishing the ability to finance imports. One important insight is that import barriers tend to have more elastic and sensitive effects than export restrictions. Import controls raise input costs for domestic producers, reduce competitiveness, and may trigger retaliatory measures from trading partners. Administrative barriers, including documentation requirements and licensing systems, further increase transaction costs. Rather than strengthening national welfare, these policies appear to compress export revenues and weaken real trade capacity.

Institutional quality plays a central role in shaping outcomes. Using World Governance Indicators, the study finds that stronger governance significantly improves income terms of trade. Control of corruption, regulatory quality, government effectiveness, and rule of law all show positive and statistically significant relationships with ITT. Improvements in corruption control and regulatory quality have particularly large effects. These findings resonate with institutional trade theory associated with scholars such as Daron Acemoglu and James Robinson, which emphasises that sound institutions reduce uncertainty, lower transaction costs, and enhance economic performance.

Structural factors also matter. Higher labour productivity and greater industrial employment shares are positively associated with income terms of trade, suggesting that industrialisation and upgrading strengthen export performance. Conversely, larger relative output — measured as a country’s share of global GDP — can deteriorate ITT, consistent with the idea that increased global supply exerts downward pressure on export prices. These patterns echo earlier structuralist arguments advanced by Prebisch and Singer on the importance of diversification and industrial transformation (Toye & Toye, 2003; Bibi, 2024).

While traditional terms-of-trade theory implies that tariffs can improve national welfare under certain conditions, the income-based perspective tells a different story. Manipulating relative prices does not necessarily increase real purchasing power if export volumes decline or trade efficiency suffers. Once quantity effects are incorporated, protectionist gains appear fragile and often counterproductive.

In conclusion, the evidence suggests that trade restrictions — particularly on the import side — tend to reduce a country’s export purchasing power and import capacity. At the same time, stronger governance, higher productivity, and structural transformation enhance income terms of trade. For policymakers, the implication is that sustainable trade gains are more likely to arise from institutional strengthening, regulatory quality, and competitiveness-enhancing reforms than from raising trade barriers. In a global economy marked by recurring protectionist pressures, the purchasing power of exports ultimately depends less on restricting trade and more on enabling it.

References
Bibi, S. (2024). Prebisch and the terms of trade. Resources Policy, 90, Article 104813. https://doi.org/10.1016/j.resourpol.2024.104813.

Natanael, Y. (2026). Trade Restrictions, Governance, and Income Terms of Trade: Evidence from a Global Panel Data Analysis. International Economic Journal, 1-45. https://doi.org/10.1080/10168737.2026.2613855

Toye, J. F., & Toye, R. (2003). The origins and interpretation of the Prebisch-Singer thesis. History of Political Economy, 35(3), 437–467. https://doi.org/10.1215/00182702-35-3-437

Purposes and Existence Absurdity

Humans tend to make assumptions, hypotheses or temporary answers when facing uncertainty and the unknown, as these are often perceived as unfamiliarity and unpredictability, which can be identified as threats or uncomfortable situations, forcing individuals to rationalise or make sense of such conditions. While assumptions and hypotheses are usually useful in the short run, having purposes could be the solution to uncertainty, the unknown and the absurdity of existence in the long run.

Having purposes helps individuals in several substantial ways. It helps one to thrive and survive in challenging conditions by serving as a cornerstone to hold on when things do not go as expected. Moreover, it forces an individual to focus on things important and relevant to the purposes, keeping those on priority to be at the top of mind and swiping away irrelevant matters. This is particularly crucial in a world full of diverse people’s interests and fluid information flow, it tends to create “noise” (unnecessary and irrelevant information) rather than “signal” (relevant and necessary information), which makes it easy to get distracted and discouraged. Additionally, having purposes makes humans believe and hope, allowing them to find the meaning in their existence.

On the other hand, the obsession with purposes can merely be intended to disrupt the absurdity of existence. In general, the existence of human beings is arguably random and absurd to a certain degree, as it does not necessarily conform to human rules, rationality and logical flows of thinking, making it somewhat unpredictable and causing oscillation. One effective way for oneself to disrupt the unnecessary overthinking of the absurdity of existence is by having purposes, as it helps an individual rationalise things and build a sense of hope amidst the surrounding happenings that might not always be rational or predictable.

After all, nothing really matters. Things and people eventually come and go. Nevertheless, purposes and meaning stay. It might be the time to reflect on the purposes and priorities, i.e. how individuals use most of their time. Since where individuals treasure is, there their heart will also be. Perhaps it is time to reconsider and evaluate whether one has taken good self-care and ensure to not be overly influenced by what is happening with the outside world and the absurd existence.

To conclude, there is nothing wrong with having purposes and an optimistic view on existence. Even an obsession with purposes could help sometimes, and to some degree, to deal with the absurdity of existence that is full of maybes. Maybe everything falls apart, maybe everything falls into place.

“On Leave” Takeaways

This post provides several key takeaways inferred from the author’s contemplation and experience after taking “on leave” status and having off days from routine duty. Those takeaways are:

Burn out
As a human being, it is completely alright to experience burnout after running several events simultaneously. Burnout is not only attributed to overwhelming situations resulting from overworking or an overload of duties, but also to a misalignment between one’s core values and the work that they do.

The Need to Take a Break
The author is fully aware that it is imperative for an individual to take a break, even for only a short period, from routine and mundane daily duties. It is understandable, especially for young people, to feel like they are always in a rush, in a hustle to be as productive as they can to be able to feel satisfied and competitive as well as to advance toward their goals as soon as possible. Ultimately, humans are still human, with all their limitations and emotions to be recognized and acknowledged. Taking a break is a need, and it is as important as working and completing tasks. Moreover, taking a break also facilitates the body and mind to process, evaluate, and improve, which also leads to the next takeaway.

Rest and digest
Everything indeed has its momentum, phase, and time. An individual, in general, goes through two main circumstances: fight or flight, and rest and digest. Being in a busy and rushed situation might lead an individual to experience a stressful situation, which can be identified by our brain as a fight-or-flight situation. Nevertheless, being constantly in this mode might lead to burnout and suboptimal learning throughout the process. Hence, a rest is necessary to digest the information retrieved, which might eventually lead our conscious and subconscious minds to work in favor of achieving a particular goal.

Subconscious and Conscious Mind
Continuing on the previous point, the subconscious mind runs in the background, processing information received from the surroundings and experiences that one might not fully notice or be aware of. Together with the conscious mind, it processes information that might influence one’s decision and behavior. Meditation and contemplation might be some of the best ways to conclude the information processed by the conscious and subconscious minds, and further proceed with actions toward the ultimate goals.

Motivation and Work
This post suggests that there are at least five aspects that might influence an individual’s work motivation in a certain job and career:

Incentives (salary, bonuses, other benefits): while they are not always the only absolute factor of work motivation, incentives might positively influence work motivation as they might improve one’s well-being.
The topic, field, and substance of the work: a match between skills, interests, expertise, and the field and tasks is essential to keep motivated, as it can lead to the optimization of one’s capabilities that contribute to collective benefits and personal satisfaction.
The colleagues, coworkers, or human capital: it is undeniable that inspiring, encouraging, and supportive colleagues and superiors might boost one’s work motivation, and vice versa. The society or people aspect of a workplace might be a considerable external factor affecting an individual’s motivation to work and complete tasks.
The opportunity for self-development: a balance between work and life is essential for an individual to sustain in an occupation and career. Hence, an opportunity in terms of time and probability to develop one’s skills, interests, and passion might be an enhancing factor of the motivation to work.
Work system: a remote or hybrid (partly working from the office and partly working from home) might be an advantageous mechanism for workers in many occupations that are applicable (with some exceptions, such as public services occupations that require physical interactions). Hence, workers in occupations that do not require intensive physical interactions might benefit from a remote or a hybrid work scheme, as the scheme offers time and cost efficiencies.

Reevaluating Work Values: The Importance of Aligning Passion, Expertise, and Job

The Monday blues constitute a situation that can demotivate an individual through dreadful feelings and negative emotions, particularly felt on Mondays. For workers, one reason could be job dissatisfaction, which might be due to various factors. A contributing factor is the mismatch between the substance or tasks being performed at the job and one’s interest, expertise, and passion. Several countries and societies tend to underestimate work interest, expertise, and a specialist, as they usually expect versatility and a generalist. Nevertheless, the tendency to underappreciate interest, expertise, and passion while overappreciating versatility and general skills could raise issues for workers and the economy as a whole.

For many workers, especially those with skills, knowledge, and passion in a certain field or career, interest and expertise are integral parts of the duties they would expect. Nonetheless, some societies and economies tend to place more value on the ability to perform nearly all types of jobs and underestimate deep, specific skills in a particular field or job. In certain contexts and economies, workers often have to perform duties that are not their interest, expertise, and passion, but rather because of job requirements to obtain earnings and stability. While there are no issues with versatility in this context, underestimating interest and expertise might cause considerable issues. The first issue related to the workers’ motivation for performing their jobs is that it might be rational to put in a bare minimum effort without utilizing all their skills and knowledge. Moreover, in the long term, this condition could deteriorate the worker’s motivation and lead to suboptimal results in their performance and self-development, which in turn might negatively influence the institutions’ performance.

In general, a lack of recognition for workers’ interests, expertise, and passion can lead to employment challenges if not addressed through fair compensation and support. One potential consequence is brain drain, where talented individuals migrate to countries that offer better opportunities and greater appreciation for their skills and aspirations. This can weaken the domestic economy by reducing the availability of competent human capital, an essential component of national development. Additionally, misalignment in the labor market may worsen as individuals increasingly pursue roles perceived as valuable, even when these do not align with their true interests or expertise, leading to supply-demand imbalances. It is also important to recognize that possessing relevant skills and performing well in a task does not guarantee long-term success or satisfaction. For example, deep analytical work often requires a strong interest in the subject matter, as intrinsic motivation plays a critical role in sustaining performance and achieving meaningful outcomes.

Hence, the government, private sector, and society might need to pay more attention and appreciate interest, expertise, and passion as much as they appreciate versatility. All types of jobs, professions, and careers need to be valued, facilitated, and supported by the government and society, as they have heterogeneous and complementary contributions to the economy. The workplace could identify and map workers’ interests and competencies before assigning them to certain positions. Workers might need to strive to have a career and occupation that aligns with their interests and skills.

In conclusion, it is essential to balance appreciation for both specialization and versatility to foster a motivated and productive workforce. Valuing workers’ interests, expertise, and passion can enhance job satisfaction, performance, and long-term economic resilience.

Rethinking Commodity Dependence: Its Impact on Economic Inequality, Growth, and Human Development

As global markets continue to evolve, the relationship between commodity dependence and various facets of economic development warrants deeper examination. Many countries heavily rely on exports of primary commodities such as oil, minerals, and agricultural products, which can significantly influence their economic trajectories. However, an increasing body of research points to the troubling implications of commodity dependence, particularly concerning economic inequality, growth, and human development.

Commodity dependence is often perceived as a boon for nations with abundant natural resources. The initial influx of wealth from exports can provide a much-needed revenue stream for economic development. However, this reliance can also lead to adverse outcomes, particularly as countries may neglect other sectors of their economy. Over time, such dependency can hinder sustainable growth and exacerbate income inequality, as wealth tends to become concentrated in the hands of a few while limiting opportunities for broader economic participation.

A recent study has highlighted a negative relationship between commodity dependence and economic inequality (Natanael, 2024), suggesting that greater dependence on commodity exports might be associated with less income inequality, which contradicts the traditional belief that commodity dependence would exacerbate inequality by hindering the development of diverse economic sectors. This unexpected result suggests that commodity dependence may indicate a more uniform economic structure, which could reduce income inequality compared to a diversified export structure that might lead to uneven growth across different sectors, generating greater inequality. Nevertheless, the stage of development might help explain the phenomenon, reflecting the anticipated inverted U-shaped relationship. While income levels initially lead to increased inequality, greater economic sophistication and more inclusive economic growth can eventually reduce inequality as countries develop further. The findings emphasize the importance of institutional quality in mediating these dynamics, suggesting that effective governance can mitigate income inequality linked to commodity dependence.

Moreover, the relationship between commodity dependence and economic growth is convoluted. While resource-rich nations may initially enjoy rapid economic growth from commodity exports, this growth can be unsustainable in the long run. The phenomenon often referred to as the “resource curse” suggests that countries that do not diversify their economies risk stalling their growth due to overreliance on volatile commodity prices. Achieving sustainable economic growth requires a conscious effort to invest in other sectors, such as manufacturing and services, that can provide stability and resilience against market fluctuations.

In the context of human development, in certain contexts, countries that are dependent on commodities may also experience improvements in human development indicators (Natanael, 2024), particularly when commodity booms translate into increased educational investment and prosperity. However, the relationship may vary based on several factors, including the level of economic complexity, the type of diversification in the economy, and institutional changes.

To address the challenges posed by commodity dependence, countries might consider multi-faceted approaches that focus on economic diversification, institutional strengthening, and inclusive policymaking. By facilitating innovation and entrepreneurship in non-commodity sectors, policymakers can create a more resilient economic landscape that mitigates the risks associated with commodity dependence. Additionally, improving institutional quality—encompassing transparency, governance, and regulatory frameworks—can help manage the impacts of commodity wealth and promote equitable development.

In conclusion, the intricate relationship between commodity dependence, economic inequality, growth, and human development reveals the need for countries to rethink their reliance on primary commodities. As they strive for sustainable growth and social equity, nations must prioritize diversification and invest in strong institutions that can support a more equitable distribution of resources. By doing so, they can transform potential vulnerabilities into pathways for inclusive prosperity.

Reference
Natanael, Y. (2024). Is Less Commodity Dependence Better for Economic Equality, Economic Growth, and Human Development?. Global Journal of Emerging Market Economies, 09749101241300637. https://doi.org/10.1177/09749101241300637