The Macroeconomics of Microfinance: An IDSS Seminar

Loan application in Bangladesh

World Bank (Shehzad Noorani, 2002)


Francisco Buera
Assistant Professor of Economics, UCLA


November 13, 2012


12–1:15 p.m. PT


RAND Corporation
1776 Main Street, Room 5312
Santa Monica, CA

About the Program

Buera's research provides a quantitative evaluation of the aggregate and distributional impact of microfinance or credit programs targeted toward small businesses. He has found 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.

About the Speaker

Francisco (Paco) Buera is an assistant professor at the Department of Economics at UCLA (2008-2012). Prior to this position, he was a senior research economist with the Federal Reserve Bank of Minneapolis (2011-2012), the Peter B. Kenen Fellow in the International Economics Section at Princeton University (2010–2011), visiting scholar at MIT (2008), and an assistant professor at Northwestern University (2004–2008). In 2004 Buera received his Ph.D. from the University of Chicago. He also holds bachelor’s and master’s degrees in economics from Universidad Torcuato Di Tella, Argentina, and the University of Chicago, respectively.

Buera's current research focuses on macroeconomics and economic development, spanning a wide range of topics: optimal management of government debt; entrepreneurship and financial frictions, and the role of financial markets in the process of development and in explaining business cycle fluctuations; structural change and economic development; the diffusion of economics policies across countries and over time; and the role of international trade in the diffusion of technologies. His work has appeared in the American Economic Review, Econometrica, Journal of Economic Theory, Journal of Monetary Economics, Annals of Finance, and the Journal of the European Economic Association.

About the IDSS

The International Development Speaker Series is supported by PRGS and Research and Policy in International Development, a research center within RAND Labor & Population.

How to Attend

IDSS talks are open to PRGS students, RAND staff, and community members interested in global development. Learn how to attend and join the mailing list for future events.

About PRGS

PRGS is unique in American higher education. It was founded in 1970 as one of the original eight graduate programs in public policy analysis. PRGS was the only program specializing in the Ph.D. It is also the only one based at a public policy research institute—the Santa Monica, California-based RAND Corporation—which invented many of the analytical tools of public policy analysis. Learn more at

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