The impacts of credit on village economies
By: [by] Joseph P. Kaboski [and] Robert M. Townsend
Contributors: Townsend, Robert M., 1948-; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 09-13; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 09-13.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2009
Place of publication: Cambridge, MA
Language: eng
Number of pages: 35
Description: This paper evaluates the short-term impact of Thailand's 'Million Baht Village Fund' program, among the largest scale government microfinance initiatives in the world, using pre-and post-program panel data and quasi-experimental cross-village variation in credit-per-household. We find that the village funds have increased total short-term credit, consumption, agricultural investment, income growth (from business and labor), but decreased overall asset growth. We also find a positive impact on wages, an important general equilibrium effect. The findings are broadly consistent qualitatively with models of credit-constrained household behavior and models of intermediation and growth. Keywords: microfinance, finance and growth, credit constraints. JEL Classifications: O1, E2.
Notes: "April 9, 2009."

Includes bibliographical references (p. 32-35).

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