Development Economics: Micro-based vs. Macro-based

[AREStudentHopeful]

Out of curiosity (and this shows my ignorance of both the development and ABM topics), has anyone tried to rely on randomized trial results to derive rules for agents in an ABM to extrapolate possible macro-level results? I know there have been some ABM's built in relation to US-style healthcare markets, but I was unaware of anything similar being done in development. To me, this seems like a good way to blend the two (micro and macro) prospectives.

[thewhiterabbit]

@dreck You are far more succinct and clear than I at making the same point :-)

 

@OneArmedEcon Agreed.

 

@ARE Not that I'm aware of - I think the field is too much in its infancy. That said, people are using randomized trials to test behavioral and other micro theories. I am not terribly knowledgable about macro (something I hope to rectify in grad school :-) but it seems like there is potential to do this kind of thing.

[appl09]

Ok, so whiterabbits post is longer and I mostly agree, but I think the answer to this boils down to two things.

1) Causality is important because the goal of much of development economics is policy recommendations. Without knowing which direction causality goes, you can't make good policy.

 

just a point of clarification - i would never say that causality is not important. my intent was to think more carefully when setting the standards too high can actually compromise the quality of the questions being asked. there is plenty of work being done that pins down the answer causally really well but i couldn't care less about the research question. my worry is mostly for the opposite - where good research and policy questions might not render themselves to certain standards of causality.

[Econ2011]

I don't think anyone would disagree that microeconomics provides the foundation but in order to assess the overall impact, one probably needs to look into the big picture that macroeconomics strives to provide. I agree causality is important but I believe it has to be more of theoretical rather than data driven given the limitations of the data.

 

For instance (and I use the example referenced above), someone might find that better health is associated with higher income and in this order while someone else might find that higher income is associated with better health outcomes. Both can be true and it is up for debate which one is the leading cause.