From Micro to Macro Development
Journal of Economic Literature
vol. 61,
no. 2, June 2023
(pp. 471-503)
Abstract
Macroeconomic development remains an important policy goal because of its ability to lift entire populations out of poverty. In our review of the literature, we emphasize that the best way to achieve this objective is to embrace a synthesis of methods and ideas, with the science of experiments as a unifying feature. Randomized controlled trials need representative data and structural modeling, and macro models need to be designed and disciplined to the realities and data of developing-country economies. Macroeconomic models have key lessons for gathering and analyzing micro evidence and for moving to an evaluation of macro policy. Resource constraints, heterogeneity, general equilibrium effects, obstacles to trade, dynamics, and returns to scale can all play key roles. A synthesis for macro development is well under way.Citation
Buera, Francisco J., Joseph P. Kaboski, and Robert M. Townsend. 2023. "From Micro to Macro Development." Journal of Economic Literature, 61 (2): 471-503. DOI: 10.1257/jel.20211537Additional Materials
JEL Classification
- C93 Field Experiments
- D00 Microeconomics: General
- E00 Macroeconomics and Monetary Economics: General
- O10 Economic Development: General
- O11 Macroeconomic Analyses of Economic Development
- O12 Microeconomic Analyses of Economic Development