Theory, General Equilibrium, and Political Economy in Development Economics
Name
Acemoglu_Theory general.pdf
Size
191.12 KB
Format
Adobe PDF
Checksum (MD5)
e5b05f83efb4302b206cbcf9f5f0a923
Author(s)
Acemoglu, Daron
Date Issued
June 2010
Journal
Journal of Economic Perspectives
Publisher
American Economic Association
Citation
Acemoglu, Daron. 2010. "Theory, General Equilibrium, and Political Economy in Development Economics." Journal of Economic Perspectives, 24(3): 17–32.
Version
Author's final manuscript
Abstract
I discuss the role of economic theory in empirical work in development economics with special emphasis on general equilibrium and political economy considerations. I argue that economic theory plays (should play) a central role in formulating models, estimates of which can be used for counterfactual and policy analysis. I discuss why counterfactual analysis based on microdata that ignores general equilibrium and political economy issues may lead to misleading conclusions. I illustrate the main arguments using examples from recent work in development economics and political economy.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike 3.0
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1257/jep.24.3.17
