Theory, General Equilibrium, and Political Economy in Development Economics

摘要

Development economics investigates the causes of poverty and low incomes around the world and seeks to make progress in designing policies that could help individuals, regions, and countries to achieve greater economic prosperity. Economic theory plays a crucial role in this endeavor, not only because it helps us focus on the most important economic mechanisms, but also because it provides guidance on the external validity of econometric estimates, meaning that it clarifies how we can learn from specific empirical exercises about the effects of similar shocks and policies in different circumstances and when implemented on different scales.