Economic development, flow of funds, and the equilibrium interaction of financial frictions

Benjamin Moll, Robert M. Townsend, Victor Zhorin

Research output: Contribution to journalArticle

2 Scopus citations

Abstract

We use a variety of different datasets from Thailand to study not only the extremes of micro and macro variables but also withincountry flow of funds and labor migration. We develop a general equilibrium model that encompasses regional variation in the type of financial friction and calibrate it to measured variation in regional aggregates. The model predicts substantial capital and labor flows fromrural to urban areas even though these differ only in the underlying financial regime. Predictions for micro variables not used directly provide a model validation. Finally, we estimate the impact of a policy of counterfactual, regional isolationism.

Original languageEnglish (US)
Pages (from-to)6176-6184
Number of pages9
JournalProceedings of the National Academy of Sciences of the United States of America
Volume114
Issue number24
DOIs
StatePublished - Jun 13 2017

All Science Journal Classification (ASJC) codes

  • General

Keywords

  • Big data
  • Financial frictions
  • Isolationist policies
  • Regional flow of funds
  • Thailand

Fingerprint Dive into the research topics of 'Economic development, flow of funds, and the equilibrium interaction of financial frictions'. Together they form a unique fingerprint.

  • Cite this