To learn more about how people in developing countries thrive, Robert Townsend has built his career on empirical analysis framed by strong theoretical work. His approach made him a trailblazer among development economists. On May 21-22, students and colleagues shaped by his influence will gather in Chicago for a two-day conference honoring his legacy of scholarship.
“He has obviously laid the intellectual groundwork for many of us,” says Joe Kaboski, the David F. and Erin M. Seng Foundation Professor of Economics at the University of Notre Dame. Focusing mostly on money and banking theory early in his career, Townsend pivoted to empirical work, tackling questions about risk and informal insurance arrangements in India that eventually earned him the Econometric Society’s prestigious Frisch medal.
From there, he began household survey work in Thailand that continues today; at this point he has tracked the financial connections among businesses and individuals there since 1997. “Before Rob, and a few others, arrived on the scene, this wasn’t something that was done in development. For almost two decades, he has used Thailand as an intensive, and immensely interesting, case study on growth and financial development,” says Kaboski.
Currently, Townsend, the Elizabeth & James Killian Professor of Economics at Massachusetts Institute of Technology, holds a visiting post as a Distinguished Research Fellow to the Becker Friedman Institute. The conference—supported in part by the institute—will be held at the Federal Reserve Bank of Chicago, as well as Saieh Hall for Economics on the University of Chicago campus.
Co-organizing the conference, Kaboski wanted to honor Townsend’s lasting influence on students and colleagues, a legacy of using sound financial theory to provide a solid framework for data gathering and analysis. “The common themes [through his career] have been banking, finance, and economic development; A common emphasis has been that it is important to understand both formal and informal financial arrangements, and how they interact,” explains Kaboski.
Speakers include Nobel laureate and Distinguished Research Fellow Tom Sargent and Penn State University Economics Professor Neil Wallace, among many notable presenters. The first day’s presenters will focus on banks and macroeconomic theory, turning to microeconomic studies and development economics on day two. “The entire program is built around his legacy and captures the breadth of his interest,” says Kaboski.
In all cases, speakers will emphasize the overlap between theory and data, a throughline that unites all of Townsend’s work and work inspired by him. “Rob lets the theory guide what data he decides to collect,” says Kaboski. “[It’s an approach that allows him to] test the main implications of the theory.”