ND Economist Honored

Economics professor Joseph KaboskiKaboski is the David F. and Erin M. Seng Foundation Associate Professor of Economics. He could probably explain a whole lot to you about micro-finance, which is a big deal.  Copyright University of Notre Dame / Photo by Matt Cashore.

Notre Dame economist Joseph Kaboski and MIT economist Robert Townsend were awarded the prestigious Frisch Medal for a paper they co-wrote about microfinance programs.

Kaboski and Townsend published their paper in the well-regarded journal Econometrica in September 2011. Their paper is rather academically named "A Structural Evaluation of a Large-Scale, Quasi-Experimental Microfinance Initiative," probably because that's what the paper is about.

All this is very high-level, which probably explains why they won the Frisch Medal of the Econometric Society in the first place. The Frisch Medal is awarded once every two years for the best empirical or theoretical applied paper published in Econometrica in the last five years. So let's explain why Kaboski's research on microfinance is major-important.

Microfinance applies to financial services, like fund transfers or loans to entrepreneurs, that are applied on a small scale. Microfinance services, particularly micro-loans, are generally offered in poor nations or communities without access to large-scale commercial banks.

Micro-financial institutions are as diverse as their communities, but the point remains the same: When Goldman Sachs isn't flying executives into small villages to help potential entrepreneurs start businesses, then small villages do it themselves. And although there is plenty of healthy academic debate around the specifics of microfinancing, its growing prevalence around the world suggests it just might be the perfect way to turn poor communities into thriving economies.

In Thailand, the Thai government fuels microfinance with the Million Baht Village Fund, one of the largest microfinance initiatives of its kind. Here's the hitch: Someone needs to figure out how successful the Fund is.  If it works, then its model can be applied to developing nations like Thailand.  

Enter Kaboski and Townsend, whose Townsend Thai Data project has gathered survey information from Thai households monthly since 1997. With their extensive survey data supported in part by the Consortium on Financial Systems & Poverty, the authors could model and evaluate the Fund's impact on Thai villages.

In 2011, they published their findings in Econometrica to much acclaim.  The Frisch selection committee said the paper was praiseworthy for "its combination of rigorous theory and careful econometrics to produce important insights into a major development policy."

Kaboski's research focuses on growth, development and international economics. He emphasizes structural change, finance and development, schooling and growth, and microfinance.

Contact Professor Kaboski via email for more information on his research.

For more lovely photos of ND Faculty, see photos.nd.edu.

SOURCE: PR Newswire