This paper studies the efficiency of competitive equilibria in environments with a moral hazard problem and unobserved states, both with retrading in ex post spot markets. The interaction between private information problems and the possibility of retrade creates an externality, unless preferences have...

This paper proposes a framework to generate village economic accounts and village balance of payments accounts from a micro-level household survey. Using the Townsend-Thai data, Paweenawat and Townsend create village economic and balance of payments accounts for rural villages in Thailand. They then...

Many risks are present in rural developing economies: illness, weather, the sudden need to finance an investment opportunity, etc. Yet for many households in rural developing economies, consumption and investment are insured against short-term, idiosyncratic risks to a large extent, despite limited availability...

This paper evaluates the short-term impact of Thailand's Million Baht Village Fund program, among the largest scale government microfinance initiative in the world, using pre- and post-program panel data and quasi-experimental cross-village variation in credit-per-household. Kaboski and Townsend...

A nation’s economic geography can have an enormous impact on its development. This paper shows that for Thailand, a high concentration of enterprise in an area predicts high subsequent growth in and around that area. Felkner and Townsend also find spatially contiguous convergence of enterprise with stagnant...

Kaboski and Townsend use a structural model to understand, predict, and evaluate the impact of an exogenous microcredit intervention program, the Thai Million Baht Village Fund. They model household decisions in the face of borrowing constraints, income uncertainty, and high-yield indivisible investment...

Townsend and Pawasutipaisit use detailed income, balance sheet, and cash flow statements constructed for households in a long monthly panel in an emerging market economy, as well as contributions in economic theory, to document and better understand the factors underlying success in achieving upward...

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...

A number of papers argue that the misallocation of resources can explain large cross-country TFP differences. This argument is underpinned by empirical evidence documenting substantial dispersion in the marginal products of resources, particularly capital, in developing countries. But why does misallocation...

Several studies report interest rate elasticities for money demand below one half, the value predicted by economic models. It is also widely documented that money holdings decrease as new technologies to economize in the use of cash are introduced. This paper develops a dynamic inventory model for cash...