14.772
Development Economics: Macroeconomics
Emphasizes dynamic models of growth and development. Topics include migration, modernization, and technological change; static and dynamic models of political economy; the dynamics of income distribution and institutional change; firm structure in developing countries; development, transparency, and functioning of financial markets; privatization; and banks and credit market institutions in emerging markets. Examines innovative yet disruptive digital technologies, including blockchain, digital assets, crypto currency, distributed ledgers, and smart contracts.
Spring 2013
Topics
- Introduction to the course
- Micro-founded macro models
- Growth, inequality, TFP with financial imperfections (featuring limited commitment)
- Growth, TFP, international capital flows: Other frictions in financial intermediation (costly state verification, adverse selection, moral hazard)
- Measurement: Financial accounts, economic accounts, NIPA, balance of payments; From households to village economies to national level flow of funds
- Insurance: From village insurance to financial access and targeting to risk instruments in advanced OECD countries
- Capital asset pricing: Idiosyncratic and aggregate risk, mean variance frontiers, lack of insurance among the poor and modern corporations
- Links to the macro literature: Panel data and models of smoothing (exogenous incomplete markets)
- Labor supply: Intensive and extensive margin in villages to families, lotteries, and elasticities in macro
- Barriers to sharing risk (moral hazard, limited commitment): Common methods in village economies
- Program evaluation: The Thai Million Baht Village Fund
- From reduced-form to structural evaluation: Expanding financial infrastructure and impact
- Discussion, research proposals
Readings
- Townsend, R. M. “Insurance and Credit: Micro Financial Underpinnings for Entire Economies.” IIES 50th Anniversary Lecture slides (annotated) (2012).
- Samphantharak, K., and R. M. Townsend. Chapter 4 in Households as Corporate Firms: An Analysis of Household Finance Using Integrated Household Surveys and Corporate Financial Accounting . Econometric Society Monograph Series. Cambridge University Press, 2009. ISBN: 9780521124164.
- Selected case studies
- “CFSP Flow of Funds Accounts and Savings Workshop.” April 2012, conference summary
- Tazhibayeva, K., and R. M. Townsend. “The Impact of Climate Change on Rice Yields: Heterogeneity and Uncertainty.” Working Paper, 2012.
- Suri, T. “Estimating the Extent of Local Risk Sharing Between Households.” Working Paper, 2011.
- Samphantharak, K., and R. M. Townsend. “Understanding Consumption and Income Volatility in Village Economies.” 2013.
Prerequisites & course information
Prereq: 14.121 and 14.451 G (Spring) 5-0-7 units
Sources
- Course catalogue ↗2026–2027
- MIT OpenCourseWare ↗Spring 2013
- MIT OCW calendar ↗
- MIT OCW readings ↗
- MIT OCW syllabus ↗
- Historical MIT OpenCourseWare offering. Named reading entries and schedule topics are automatically extracted from the linked source pages.