Working Paper: NBER ID: w28423
Authors: Francisco J. Buera; Joseph P. Kaboski; Robert M. Townsend
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. RCTs 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.
Keywords: macroeconomic development; randomized controlled trials; microeconomic evidence; policy synthesis
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 |
|---|---|
| macroeconomic models (E19) | micro evidence (B21) |
| education policies (I28) | distribution of skills (D39) |
| distribution of skills (D39) | wages (J31) |
| distribution of skills (D39) | investment incentives (O31) |
| scaled policies (J18) | economic outcomes (F61) |
| policy scale (D78) | effectiveness of large-scale interventions (C93) |