Village Economic Accounts: Real and Financial Intertwined
- (pp. 441-46)
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.Citation
Paweenawat, Archawa, and Robert M. Townsend. 2012. "Village Economic Accounts: Real and Financial Intertwined." American Economic Review, 102 (3): 441-46. DOI: 10.1257/aer.102.3.441JEL Classification
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- D14 Personal Finance
- E44 Financial Markets and the Macroeconomy
- O12 Microeconomic Analyses of Economic Development
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance