@article{39340529a6ef4c21afd4c654c345ce00,
title = "Economic development, flow of funds, and the equilibrium interaction of financial frictions",
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.",
keywords = "Big data, Financial frictions, Isolationist policies, Regional flow of funds, Thailand",
author = "Benjamin Moll and Townsend, {Robert M.} and Victor Zhorin",
note = "Funding Information: We thank Fernando Aragon, Paco Buera, Hal Cole, Matthias Doepke, Mike Golosov, Cynthia Kinnan, Michael Peters, Tommaso Porzio, Yuliy Sannikov, Martin Schneider, Yongs Shin, Ivan Werning, and seminar participants at various institutions for very useful comments. Hoai-Luu Nguyen, Hong Ru, Suparit Suwanik, and Xiaowen Yang provided outstanding research assistance. For sharing their code, we thank Paco Buera and Yongs Shin. R.M.T. gratefully acknowledges research support from the Eunice Kennedy Shriver National Institute of Child Health and Human Development Grant R01 HD027638, the research initiative Private Enterprise Development in Low-Income Countries, a program funded jointly by the Centre for Economic Policy Research and the Department for International Development under Grant MRG002 1255, the Consortium on Financial Systems and Poverty at the University of Chicago (funded by the Bill & Melinda Gates Foundation), and the Thailand Research Fund and Bank of Thailand. This work was completed in part with resources provided by the University of Chicago Research Computing Center.",
year = "2017",
month = jun,
day = "13",
doi = "10.1073/pnas.1707055114",
language = "English (US)",
volume = "114",
pages = "6176--6184",
journal = "Proceedings of the National Academy of Sciences of the United States of America",
issn = "0027-8424",
publisher = "National Academy of Sciences",
number = "24",
}