Financial Structure and Economic Welfare: Applied General Equilibrium Development Economics

Robert M. Townsend. Annual Review of Economics. Ed. Kenneth Arrow and Timothy Bresnahan. Vol. 2, 2010: 507-546.

This review provides a common framework for researchers thinking about the next generation of micro-founded macro models of growth, inequality, and financial deepening, as well as direction for policy makers targeting microfinance programs to alleviate poverty. Townsend covers topics such as the treatment of financial structure general equilibrium models, designing surveys to capture measures of income, investment/savings, and flow of funds, and aggregating individuals and households to the level of network, village, or national economy. LINK