TY  - JOUR
AU  - Buera,Francisco J.
AU  - Kaboski,Joseph P.
AU  - Shin,Yongseok
TI  - The Macroeconomics of Microfinance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17905
PY  - 2012
Y2  - March 2012
UR  - http://www.nber.org/papers/w17905
L1  - http://www.nber.org/papers/w17905.pdf
N1  - Author contact info:
Francisco J. Buera
Department of Economics
University of California, Los Angeles
8283 Bunche Hall Office 8357
Mail Stop: 147703
Los Angeles, CA 90095
Tel: 310/825-8018
Fax: 310/825-9528
E-Mail: fjbuera@econ.ucla.edu

Joseph P. Kaboski
Department of Economics
University of Notre Dame
434 Flanner Hall
Notre Dame, IN 46556
Tel: 574/631-9906
E-Mail: jkaboski@nd.edu

Yongseok Shin
Department of Economics
Washington University in St. Louis
One Brookings Drive
St. Louis, MO 63130
Tel: 314/935-7138
Fax: 314/935-4156
E-Mail: yshin@wustl.edu
AB  - We provide a quantitative evaluation of the aggregate and distributional impact of microfinance or credit programs targeted toward small businesses. We find that the redistributive impact of microfinance is stronger in general equilibrium than in partial equilibrium, but the impact on aggregate output and capital is smaller in general equilibrium. Aggregate total factor productivity (TFP) increases with microfinance in general equilibrium but decreases in partial equilibrium. When general equilibrium effects are accounted for, scaling up the microfinance program will have only a small impact on per-capita income, because the increase in TFP is counterbalanced by lower capital accumulation resulting from the redistribution of income from high-savers to low-savers. Nevertheless, the vast majority of the population will be positively affected by microfinance through the increase in equilibrium wages.
ER  -