Theory, General Equilibrium, and Political Economy in Development Economics
AbstractI discuss the role of economic theory in empirical work in development economics with special emphasis on general equilibrium and political economy considerations. I argue that economic theory plays (should play) a central role in formulating models, estimates of which can be used for counterfactual and policy analysis. I discuss why counterfactual analysis based on microdata that ignores general equilibrium and political economy issues may lead to misleading conclusions. I illustrate the main arguments using examples from recent work in development economics and political economy.
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Bibliographic InfoArticle provided by American Economic Association in its journal Journal of Economic Perspectives.
Volume (Year): 24 (2010)
Issue (Month): 3 (Summer)
Other versions of this item:
- Daron Acemoglu, 2010. "Theory, General Equilibrium and Political Economy in Development Economics," NBER Working Papers 15944, National Bureau of Economic Research, Inc.
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- P00 - Economic Systems - - General - - - General
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Theory, General Equilibrium and Political Economy in Development Economics
by Christian Zimmermann in NEP-DGE blog on 2010-05-13 00:31:06
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