MIT Department of Economics

Robert M. Townsend
Elizabeth & James Killian Professor of Economics

A theorist, macroeconomist, and development economist, Townsend analyzes the role and impact of economic organization and financial systems through applied general equilibrium models, contract theory, and the use of micro data. 




This website attempts to capture the scope of my work throughout my career, up through and including present day. It organizes the work formally -- so you can hopefully find what you are looking for or discover something new -- as well as loosely, around a series of themes and ideas that I am currently pursuing.


What’s New?


I am currently a member of the executive committee and past president of the Society for the Advancement of Economic Theory (SAET). Founded in 1990 and dedicated to advancing knowledge in theoretical economics, SAET publishes the journals Economic Theory and Economic Theory Bulletin, names Economic Theory Fellows, and bestows the Aliprantis Prize for Excellence to a young researcher. SAET also facilitates communication among researchers in economics, mathematics, game theory, and other fields that have the potential to inform and shape economic theory.

New Courses

This fall I am teaching Intermediate Microeconomic Theory (M14.04). This course provides an introduction to theory and data, consumer choice, and general equilibrium models. It includes the analysis of consumer and producer decisions, partial and general equilibrium analysis, insurance, the welfare theorems and failures of these theorems as with externalities but with resolutions, contract theory and mechanism design, policy analysis, the content of theory for data, and the design of media of exchange as with Bitcoin and markets made possible by distributed ledgers.

The lectures center around eight major themes: 1) Introduction and Motivation for the Course; 2) Pareto Optimality, Risk and Dynamics, Application to Village Economies, Social Networks, and the US; 3) Private Information, Contracts, Mechanism Design; 4) Quasi Natural Experiments, Prediction and Validation, Actual and Counterfactual Impact of Policy and Welfare; 5) Prediction with Alternative Concepts, Welfare Theorems; 6) Microeconomics and General Equilibrium Theory and Data, Identification and Falsification, Welfare; 7) Failures of the Welfare Theorems and Some Market Structure Remedies; and 8) Bitcoin, Blockchain, and Distributed Ledgers.

Last year, I taught Advanced Macroeconomics and Development Economics at MIT, packaged into one class. These focus on the analysis of financial systems in emerging markets and in more developed economies. I like to feature the unity in this approach, bringing together the common elements -- that is, theory and the use of data -- and by identifying obstacles to and potential remedies for achieving efficiency. This approach supports the creation of policy that is based on first principles. I am also struck by the relevance of past work in general equilibrium and its continued relevance today, as well as the importance of contract theory with limited commitment and private information. Market design, financial intermediaries, money and payments are important topics in this approach.

Recent Lectures

In June 2018, I presented, “Distributed Ledger Technology: Innovation and Regulation in Cryptocurrency, E-Payments, and Financial Infrastructure” at Sveriges Riksbank, De Nederlandsche Bank, and Deutsche Bundesbank Annual Macroprudential Conference in Stockholm, Sweden.

Teaching & Students


This page features current and past classes that I have taught at MIT going back to 2011. It also includes syllabi.


Some of my lectures can be found online: Development Economics, Macroeconomics; Measurement in Economics; An Overview of Micro-Founded Macro Models; Applying an Applied General Equilibrium Approach in Development Economics; and Optimal Risk Sharing Among Households in Developing Countries

Former and Current Students

Finally, the site features a list of current students as well as former students I have worked with in the past.

Working Papers & Publications

My complete archive of working papers and publications are posted with several search feature options. Below I highlight some of my most recent papers.

Recent Publications

“Family Firms, Bank Relationships and Financial Constraints: A Comprehensive Score Card.” Alexander Karaivanov, Jesus Saurina and Robert M. Townsend, forthcoming in International Economic Review, 2018.

“Integrated Household Surveys: An Assessment of U.S. Methods and an Innovation,” with Krislert Samphantharak and Scott Schuh, Economic Inquiry, 56 (1): 50 -80, 2018.

"Risk and Return in Village Economies." Krislert Samphantharak and Robert M. Townsend, American Economic Journal: Microeconomics 10(1) February 2018 (pp. 1-40): see also NBER Working Paper No. 19738, 2013 (revised 2016).

"Economic Development, Flow of Funds and the Equilibrium Interaction of Financial Frictions." Benjamin Moll, Robert M. Townsend, Victor Zhorin. PNAS June 7, 2017; see also NBER Working Paper No. 19618, 2014 (revised 2016).

“Human Capital Acquisition and Occupational Choice: Implications for Economic Development,” with Marti Mestieri and Johanna Schauer, Review of Economic Dynamics 25, 2017: 151–186; also CEPR Discussion Paper No. 11825, 2017.

"Village and Larger Economies: The Theory and Measurement of the Townsend Thai Project."  Journal of Economic Perspectives. Vol. 3, No. 30. Fall 2016. p.199-220.

Recent Working Papers

"Financial Centrality and Liquidity Provision," with Arun Chandrasekhar and Juan Pablo Xandri, Working Paper, 2018.

“Risk-taking over the Life Cycle: Aggregate and Distributive Implications of Entrepreneurial Risk,” with Dejanir H. Silva, April 2018

"Curbing Shocks to Corporate Liquidity: The Role of Trade Credit," Niklas Amberg, Tor Jacobson, Erik von Schedvin, Robert M. Townsend. 2016 (revised 2018).

"Ownership and Anti-Preemption: the geographical dynamics of a public development bank and private sector commercial banks." Juliano Assunção, Sergey Mityakov, and Robert M. Townsend. Working Paper, 2018.

"A Market Based Solution for Fire Sales and Other Pecuniary Externalities." Weerachart T. Kilenthong and Robert M. Townsend. Also NBER Working Paper No. 22056, 2016.

Working Groups

In addition to the new IO & Finance working group mentioned earlier, I organize and participate in several other active groups: Flow of Funds Accounts and Mapping Financial Systems; Financial Systems, Industrial Organization, and Economic Development; Optimal Design of Payment Systems; Financial Underpinnings of Macro Models.


I have written five books, identified below:

Data & Measurement

My current research projects include the Townsend Thai Project, which I began in 1997 with many collaborators, concludes at the end of 2018. It is one of the longest running panel datasets in the developing world. Many people enjoy watching the video documentary about this project titled, "Emerging Thailand: The Spirit of Small Enterprise."

All the data from the Townsend Thai Project can be found by following this link: http://townsend-thai.mit.edu/data/ or by visiting my Dataverse site. 

You can also find an archive for earlier research projects of mine: Consortium of Financial Systems and PovertyImpact of Financial Services in MexicoChicago Neighborhoods ProjectThe Enterprise Initiative; and the Aurepalle Village Project.


Media & News

I wrote an article for VoxDev exploring how restrictive regional economic policies can lead to lower national productivity and higher inequality. The article,  “The impact of isolationist policies: Insights from regional capital and labour flows in Thailand”, appeared in September 2017.

An archive of media coverage and more public discussion of my work can be found in the News section of the site.


About & Contact Information

My bio statement outlines the path of my career and my work. My most current cv is also available for download via the top of this page or under the About tab. My assistant, Deborah Jamiol, is a good way to go about getting in touch with me. More information about reaching her can be found on my Contact Page.