“Eliminating Uncertainty in Market Access: The Impact of New Bridges in Rural Nicaragua,” W. Brooks & K. Donovan (2018)

A Fine Theorem

It’s NBER Summer Institute season, when every bar and restaurant in East Cambridge, from Helmand to Lord Hobo, is filled with our tribe. The air hums with discussions of Lagrangians and HANKs and robust estimators. And the number of great papers presented, discussed, or otherwise floating around inspires.

The paper we’re discussing today, by Wyatt Brooks at Notre Dame and Kevin Donovan at Yale SOM, uses a great combination of dynamic general equilibrium theory and a totally insane quasi-randomized experiment to help answer an old question: how beneficial is it for villages to be connected to the broader economy? The fundamental insight requires two ideas that are second nature for economists, but are incredibly controversial outside our profession.

First, going back to Nobel winner Arthur Lewis if not much earlier, economists have argued that “structural transformation”, the shift out of low-productivity agriculture to urban areas and non-ag sectors, is fundamental…

View original post 1,491 more words

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.