Robert M. Townsend gave the Financial and Private Sector Development (FPD) Network Chief Economist Talk at the World Bank in November. Townsend's talk, entitled "Informal Networks and Shadow Banking: Policy Implications" presented an overview of research lessons on risk sharing and networks in Thai villages as well as the importance of extensive panel data in understanding these occurrences. The lecture was also geared toward policymakers, highlighting potential policy implications, backed by the current research.
Media Coverage
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Townsend Gives Chief Economist Talk at World BankAll About Finance World Bank BlogDecember 21, 2011
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Townsend Awarded 2011 Laffont Prize in EconomicsMIT NewsNovember 18, 2011
Robert M. Townsend has been named the 2011 recipient of the Jean-Jacques Laffont Prize in economics for his work in Thailand, combining the theoretical and applied aspects of economics. The prize will be awarded by the Institute of Industrial Economics (IDEI) in January 2012.
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More Than Just Minutes: Mobile Banking in KenyaMediaGlobal NewsSeptember 14, 2011
Mobile technology is changing the world in profound and unimaginable ways. In the developing world, mobile phones present an opportunity to bypass costly infrastructure required for installing landlines, making long distance communication not only easy, but cheap. Together, Robert M. Townsend, William Jack of Georgeton, and Tavneet Suri of MIT are examining mobile technology in Kenya that allows people to send and receive money.
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The Rich Complexity of Village LifeThe Federal Reserve Bank of Minneapolis, The RegionJune 15, 2011
A Thai village study finds wide variation in risk attitudes, suggesting that policy to smooth economic volatility may need to be nuanced. “Heterogeneity and Risk Sharing in Village Economies” (Minneapolis Fed Working Paper 683, January 2011, Pierre-André Chiappori, Krislert Samphantharak, Sam Schulhofer-Wohl, and Robert M. Townsend) looks at differences in risk aversion among households in four rural provinces in Thailand. The authors discover a rich complexity of village economics and a wide range of preferences regarding risk: Some households have an extreme aversion to it; others welcome it. The research further suggests that before policymakers seek to address poverty by mitigating fluctuations that impose hardships on some villagers, they need to consider this variability. A number of households, the researchers indicate, might actually benefit from volatility in village income.
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Escaping PovertyNew research reveals how poor get richerApril 20, 2011
Economists have developed a wealth of tools in recent decades. But few scholars have applied those methods to an important social question: how do poor people manage their finances?
Economics Professor Robert M. Townsend is shedding light on the issue through a long-term study of the poor in small villages in Thailand. Townsend's work shows that having a sound financial strategy emphasizing saving significantly helps families escape poverty, and education is also linked to advances in wealth.
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How Do We Know if Financial Innovations in Developing Countries Help or Hurt in the Fight Against Poverty?CFSPMarch 22, 2011
Ever since widespread defaults on microloans in India thrust the microfinance industry into crisis, a compelling and fundamental question has been renewed: How do we determine what impact financial innovations and financial policy changes will have on the economies of developing countries? A new book by MIT economist Robert M. Townsend explains for the first time how economists and policymakers can merge rigorous economic models with extensive data to answer important questions like these. Financial Systems in Developing Economies outlines the theoretical and practical foundations for analyzing the impact of financial systems on growth, inequality and poverty. Townsend demonstrates how researchers can quantify potential gains and losses to individual households and firms, to regions, and to national economies under varying financial policies.
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Townsend on Development, Poverty and Financial InstitutionsInterview on EconTalk, hosted by Russ RobertsMarch 15, 2011
Robert M. Townsend of MIT and the Consortium on Financial Systems and Poverty talks with EconTalk host Russ Roberts about development and the role of financial institutions in growth. Drawing on his research, particularly his surveys of households in Thailand, Townsend argues that both informal networks and arrangements and formal financial institutions play important roles in dealing with risk. Along the way, he discusses the role of microfinance in poor countries and the potential for better financial arrangements to lead to higher growth and the accumulation of wealth.
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Households as corporate firms.Interview by Stephen Yeo of VOX EUDecember 17, 2010
Robert M. Townsend talks about his recent book, co-authored with Krislert Samphantharak, that analyses household finance in developing countries using integrated household surveys. Townsend describes how to create new and more comprehensive household ‘accounts’, and use them to analyse productivity, capital structure and liquidity in households. The interview was recorded in London in November 2010.
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Financial systems in developing countries: how poor people lift themselves out of poverty.Interview by Stephen Yeo of VOX EUDecember 10, 2010
Robert M. Townsend of MIT talks about his research on how the lives of the world’s poor can be improved through more efficient financial systems. Drawing on data gathered from an extensive survey of Thai households, Townsend discusses risk-sharing and the importance of networks, the rate of saving and return on assets, and villages as small, open economies. The interview was recorded in London in November 2010.
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Economists may bring into focus the financial lives of billions.November 17, 2010
Economists Krislert Samphantharak of UC San Diego and Robert M. Townsend of MIT have defined a far-reaching framework that may contribute significantly to the meaningful assessment and analysis of the financial lives of the world’s poor. The lack of a cohesive framework for gathering and organizing data about the finances of poor households often results in data that are inconsistent or analysis that does not make sense. This inhibits the ability of researchers and policymakers to make sound decisions that truly benefit the poor. In their book Households as Corporate Firms, published by Cambridge University Press,Samphantharak and Townsend establish a framework that shows how researchers can create detailed accounts for households based on corporate financial accounting principles.