Giving Credit Where It Is Due

Bibliographic Data

ID4029940
AuthorsAbhijit V Banerjee (Massachusetts Institute of Technology, Cambridge, Massachusetts; Directors, Abdul Latif Jameel Poverty Action Lab, Cambridge, Massachusetts; Research Associates, National Bureau of Economic Research, Cambridge, Massachusetts; Research Fellows, Center for Economics and Policy Research, London, United Kingdom; and members of the Board of Directors, Bureau for Research in Economic Analysis and Development (BREAD).), Esther Duflo (0000-0001-6105-617X, Massachusetts Institute of Technology, Cambridge, Massachusetts; Directors, Abdul Latif Jameel Poverty Action Lab, Cambridge, Massachusetts; Research Associates, National Bureau of Economic Research, Cambridge, Massachusetts; Research Fellows, Center for Economics and Policy Research, London, United Kingdom; and members of the Board of Directors, Bureau for Research in Economic Analysis and Development (BREAD).)
Year2010
Volume24
Issue3
Pages61-80
Publication date2010-08-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Journal of Economic Perspectives (JOURNAL)
Journal identifiersISSN: 0895-3309 • E-ISSN: 1944-7965
PublisherAmerican Economic Association (PUBLISHER • US)
DOI10.1257/jep.24.3.61
OpenAlexW2201049328
LanguageEN
Citations received29
References cited33

In the last few years, field experiments have emerged as an attractive new tool in the effort to elaborate our understanding of economic issues relevant to poor countries and poor people. By enabling the researcher to precisely control the variation in the data, field experiments allow the estimation of parameters and testing of hypotheses that would be very difficult to implement with observational data. The results of this body of empirical work, in turn, have pushed theory in new directions. Much of this paper illustrates the power of this interplay between experimental and theoretical thinking. Rather than discussing this in the abstract, we focus on one area where the recent empirical work has been particularly exciting and useful-credit. Credit markets in developing countries offer up many facts and puzzles that lead us to build theories based on informational constraints and psychological limitations. The empirical work inspired by these theories, in turn, has generated both support for the theories, which then influenced policy thinking, and new puzzles, which have prompted new efforts to improve the theory. We see the substantive, two-way conversation taking place between theory and data around credit markets in developing economies as a promising template for the field

Economics · Positive economics · Banking stability, regulation, efficiency · Engineering · Financial Literacy, Pension, Retirement Analysis · Microfinance and Financial Inclusion

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