While economic policy throughout the world has come to rely increasingly on markets and price signals to guide the course of growth and development, there remains a range of important issues about how market economies actually work, and how to facilitate their working, especially for less well-off populations. Long treated as a closed black box by economists, it has become clear that the internal decisionmaking and power structure of households shape the rate and form of growth. Both theoretical and empirical work within the department has tried to extend intra-household models and more fully understand the forces which may impart a gender bias to growth.
Market economies feature a complex interrelationship between different markets and sectors.
Macroeconomic reform or technological change in one sector reverberates out through factors and other markets influencing behavior in other sectors. In both teaching and research, the department features careful attention to and development of the general equilibrium modeling tools needed to explore the full impact of such changes. Privatized and alienable property rights are often portrayed as one of the key institutional prerequisites for a market economy. Research and teaching within the department has explored the various functions and impacts of alternative property rights regimes, with particular emphasis on the evolution of customary tenure systems. The university's Land Tenure Center offers a wealth of resources in this area.