Contributions

  • Massachusetts Institute of Technology. Dept. of Economics - Contributor

Publication

2010 - Massachusetts Institute of Technology, Dept. of Economics, Cambridge, MA, Massachusetts

Language

English

Word Count

6,000 words, Guess

Page Count

24 pages

Identifiers

Description

I 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. Keywords: economic development, economic theory, methodology of economics, political. JEL Classifications: O10, O12, B41, D50, P48.

Subjects

Series Statement

  • Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- 10-6
  • Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 10-06.

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