Village Economic Accounts: Real and Financial Intertwined
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Townsend_Village Economic.pdf
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925.48 KB
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Author(s)
Townsend, Robert
Paweenawat, Archawa
Date Issued
May 2012
Journal
American Economic Review
Publisher
American Economic Association
Citation
Paweenawat, Archawa, and Robert M Townsend. “Village Economic Accounts: Real and Financial Intertwined.” American Economic Review 102.3 (2012): 441–446. © 2012 AEA
Version
Final published version
Abstract
We propose a framework to create village economic and balance of payments accounts from a micro-level household survey. Using the Townsend Thai data, we create the accounts for villages in rural and semi-urban areas of Thailand. We then study these village economies as small open countries, exploring in particular the relationship between the real and financial variables. We examine cross-village risk-sharing and the Feldstein-Horioka puzzle. Our results suggest that within-village risk-sharing is better than across-village and, while there is smoothing in both, the mechanisms are different. We also find that, unlike countries, the cross-village capital markets are highly integrated.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.102.3.441
