Working Paper: CEPR ID: DP15775
Authors: Francisco Buera; Joseph Kaboski; Robert M. Townsend
Abstract: Macroeconomic development remains an important policy goal because of its ability to lift entirepopulations out of poverty. In our review of the literature, we emphasize that the best way toachieve this objective is to embrace a synthesis of methods and ideas, with the science ofexperiments as a unifying feature. RCTs need representative data and structural modeling, andmacro models need to be designed and disciplined to the realities and data of developing countryeconomies. Macroeconomic models have key lessons for gathering and analyzing micro evidenceand for moving to an evaluation of macro policy. Resource constraints, heterogeneity, generalequilibrium effects, obstacles to trade, dynamics, and returns to scale can all play key roles. Asynthesis for macro development is well under way.
Keywords: Structural Transformation; Economic Growth; Investment Dynamics
JEL Codes: O1; O11; O12; O2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| structural transformation (L16) | economic growth (O49) |
| structural transformation (L16) | capital accumulation (E22) |
| stable transformation path (strap) (D50) | economic growth (O49) |
| stable transformation path (strap) (D50) | capital accumulation (E22) |
| structural transformation (L16) | Baumol's disease effect (E31) |
| Baumol's disease effect (E31) | slowdown in aggregate growth (F62) |
| structural transformation (L16) | distinct growth trajectories (O41) |
| capital accumulation (E22) | economic growth (O49) |