The Macroeconomics of Microfinance / Francisco J. Buera, Joseph P. Kaboski, Yongseok Shin.

Format:

Book

Author/Creator:

Buera, Francisco J.

Contributor:

National Bureau of Economic Research.

Kaboski, Joseph P.

Shin, Yongseok.

Series:

Working Paper Series (National Bureau of Economic Research) no. w17905.

NBER working paper series no. w17905

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2012.

Summary:

We provide a quantitative evaluation of the aggregate and distributional impact of microfinance or credit programs targeted toward small businesses. We find that the redistributive impact of microfinance is stronger in general equilibrium than in partial equilibrium, but the impact on aggregate output and capital is smaller in general equilibrium. Aggregate total factor productivity (TFP) increases with microfinance in general equilibrium but decreases in partial equilibrium. When general equilibrium effects are accounted for, scaling up the microfinance program will have only a small impact on per-capita income, because the increase in TFP is counterbalanced by lower capital accumulation resulting from the redistribution of income from high-savers to low-savers. Nevertheless, the vast majority of the population will be positively affected by microfinance through the increase in equilibrium wages.

Notes:

Print version record

March 2012.