Macroeconomics of Microfinance

Yongseok Shin, Joseph Kaboski and Francisco Buera

No 545, 2011 Meeting Papers from Society for Economic Dynamics

Abstract: This paper provides a quantitative evaluation of the aggregate and distributional impacts of economy-wide microfinance or other credit programs targeted toward small-scale entrepreneurs. In our analysis, we find that the redistributive impacts of microfinance are stronger in general-equilibrium, but the aggregate impacts are smaller. Making the typical microfinance program more widely available has a negligible impact on per-capita income, since an increase in aggregate total factor productivity(TFP) is offset by lower capital accumulation that stems from redistributing income from individuals with high saving rates to those with low saving rates. However, the welfare impact is uniformly positive except for those few that are extremely talented and/or wealthy.

Date: 2011
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Related works:
Journal Article: The Macroeconomics of Microfinance (2021)
Working Paper: The macroeconomics of microfinance (2013)
Working Paper: The Macroeconomics of Microfinance (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed011:545

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