Economists are excessively influenced by the so-called positive economics view, which says that economists should only describe and not prescribe. Here I argue that this view is flawed because it makes unreasonably strong assumptions about what players (the agents taking economic decisions) know...

We study how the introduction of microfinance changes the networks of interactions among 16476 households in 75 Indian villages, and develop a new dynamic model of network formation to explain the empirical findings. None of the villages were exposed to microfinance by 2006, and 43 villages were...

This paper reports on the first randomized evaluation of the impact of introducing the standard microcredit group-based lending product in a new market. In 2005, half of 104 slums in Hyderabad, India were randomly selected for opening of a branch of a particular microfinance institution...

This paper reports on the first randomized evaluation of the impact of introducing the standard microcredit group-based lending product in a new market. In 2005, half of 104 slums in Hyderabad, India were randomly selected for opening of a branch of a particular microfinance institution...

Formal financial institutions can have far-reaching and long-lasting impacts on informal lending and information networks. We first study 75 villages in Karnataka, 43 of which were exposed to microfinance after we first collected detailed network data. Networks shrink more in exposed villages....

We examine how participation in a microfinance program diffuses through social networks. We collected detailed demographic and social network data in 43 villages in South India before microfinance was introduced in those villages and then tracked eventual participation. We exploit exogenous...