Economics Faculty at LUMS Publish Paper in the American Economic Review
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Dr. Kashif Z. Malik and Dr. Faisal Bari’s paper (co-authored with researchers from the University of Oxford) was recently published in the esteemed American Economic Review (AER). Dr. Malik and Dr. Bari serve as Associate Professors at the Chaudhry Nazar Muhammad Department of Economics at LUMS.
The article titled ‘Asset-Based Microfinance for Microenterprises: Evidence from Pakistan’ unveils transformative insights from a field experiment on microcredit empowerment. The research provided graduated clients the opportunity to finance a business asset at four times their usual borrowing limit, utilising a hire-purchase contract, while the control group received a zero-interest loan at the standard limit. Results were transformative, with treated microenterprise owners experiencing substantial and persistent business growth and higher profits. The positive impact extended to household consumption, notably in food and children's education. This research offers practical insights and utilises a dynamic structural model, emphasising the potential for sustainable welfare improvements through significant capital injections.
Read the full article for a closer look at strategic economic interventions driving lasting positive change.
The American Economic Review (AER) is one of the most prestigious academic journals in the field of economics. It is published by the American Economic Association and covers a wide range of economic topics, including microeconomics, macroeconomics, econometrics, and applied economics. Articles published in the AER are rigorously peer-reviewed and often have a significant impact on economic theory and policy.
