Return on assets (ROA) from household enterprise is crucial for understanding the well being and productivity of households in developing economies. Yet the definition and measurement of household enterprise ROA remain inconsistent or unclear. This paper illustrates potential measurement problems with...

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...

This paper examines the three distinct arguments about the special economic role of the middle class that are traditionally made. In one, new entrepreneurs armed with a capacity and a tolerance for delayed gratification emerge from the middle class and create employment and productivity growth for the...

Theories rationalizing joint liability lending are rich in implications for repayment rates; this paper exploits this fact to test four diverse models. Ahlin and Townsend show that the models’ repayment implications do not always coincide. For example, higher correlation of output and borrowers’ ability...