In discrete choice models the marginal effects of a variable that is interacted with another variable and the interaction term differ from the marginal effect of a variable that is not interacted with any variable. Standard software incorrectly estimates these marginal effects. I provide correct...

This paper argues that studying the effect of financial development and shocks on aggregate growth volatility will not be informative because they affect growth volatility through its different components. Volatility declines either a consequence of a change in the nature of shocks or a change...

The linkage between the formal and informal credit markets has long been of great interest to development economists. This paper addresses one important aspect of the linkage by empirically investigating the impact of the microfinance program expansion on the moneylender interest rates in...

This paper, using data from a quasi-random control experiment on BRAC’s “Targeting the Ultra Poor” program in Bangladesh, investigates whether a one-off large grant to the extreme poor enables them to participate in the regular microfinance program that typically excludes them. The extreme...

In this paper, we investigate the macroeconomic determinants and the effect of host country business cycles on remittance inflows. Estimating a dynamic panel data model by the system GMM, we document that remittance inflows are pro-cyclical to home country volatility but counter-cyclical to the...

In this paper, we investigate the role of output market imperfections in constraining the microfinance program to mitigate credit market imperfections. We develop a model in which output market imperfections increase operating costs for NGOs and create barriers for producers to market their...

This paper revisits the empirical relationship between volatility and long-run growth, but the key contribution lies in decomposing growth volatility into its business-cycle and trend components. This volatility decomposition also accounts for enormous heterogeneity among countries in terms of...

The extreme hunger and deprivation that recurs every year in the lean season in northern Bangladesh, locally known as the Monga, is mainly due to the malfunctioning local labor and credit markets. Using data covering 5,600 extreme poor households in the Monga-prone region, we investigate in...

Financial inclusion is one of the key factors contributing to household welfare. We explore this effect in China utilizing a unique household survey panel data. Financial inclusion is measured by owning a transaction account at formal financial institutions. We employ an innovative method of...

In discrete choice models the marginal effect of a variable of interest that is interacted with another variable differs from the marginal effect of a variable that is not interacted with any variable. The magnitude of the interaction effect is also not equal to the marginal effect of the...