Sunday, October 7, 2012

Heterodox Central Bankers and Microcredit

Jayati Ghosh's presentation at the Central Bank of Argentina was a harsh critique of microcredit, which according to her has "gone from hero to zero" in less than a decade. Jayati relies on Bateman and Chang recent critique of microfinance, which suggests that microfinance is actually a barrier to economic growth and poverty reduction. A lot of the microcredit experience in India resembles a loan shark operation, with very high rates and heavy penalties, and is part of a broader drive to liberalize financial markets. It is important to note the perverse effects that fads in economic development might have on policy making.

4 comments:

  1. The link for Bateman and Chang's criticism of microfinance isn't working anymore. Is there another?

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    Replies
    1. http://hajoonchang.net/wp-content/uploads/2012/01/Microfinance.pdf

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    2. Now it's the Ghosh's work link that is having problems :/

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    3. Probably impossible to solve now, since the central bank now is not what it used to be. So I doubt that I would have access to that video or find a link to it.

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