Welcome to the Laboratory for Economic Analysis and Design
The goal of the Laboratory is to understand the financial structure and economic organization of underdeveloped, emerging market, and advanced countries, using theory and data. This means in depth studies of economic history over time for a given country, and comparisons across countries. With this understanding comes the goal of making improvements to the design financial markets and institutions, and economic organization, and improvements in policy and policy making more generally - especially on what concerns technological advancements.
The state of technologies conditions indeed current infrastructure and policy schemes. For instance, in light of the impact of Covid19 virus on the economy, it’s now much more obvious that SMEs are an integral part of how economies are put together, the backbone. The virus itself, an aggregate shock, and unanticipated, does require injection of immediate aid and relief. But the currently implemented policies are far from successful. The point is twofold: One, the ability to target ex post efficiently through existing information and financial infrastructure is limited, and two, we need better ex ante designs to mitigate chronic and acute problems that re-occur.
We thus study specific designs for improved financial and information infrastructure, taking one thing at a time. In particular we start with the objects which need to be created, namely smart contracts with options, then to securitization of individual contracts, then move to supporting data base considerations, next the ways these contracts/data objects can be traded, and finally the appropriate regulatory framework.
Publications
LEAD's Professor Townsend and graduate student Nicolas Zhang's proposal for the IMF, with Tobias Adrian, Tommaso Mancini-Griffoli, Federico Grinberg
Motivation: the fragmentation of payment systems, and lack of international monetary anchoring. This proposal is just the first step in a broader agenda currently being worked on - please feel free to reach out for collaboration!
The Economics of Platforms, in Finance and for Digital Content
The existing academic modelling of platforms as "multi-sided markets" is reaching its limits.
In this research agenda we revisit the concept of platforms via the lenses of mechanism and market designs, and show how concepts such as asset issuance, content distribution, asset settlement and reward mechanisms, can blur the lines between financial asset markets and online content platforms. After all, both are now based on Web technologies, with important economic impacts to be expected from DLT and tokenization. Both are also in need of normative policy benchmarks and goals. The benevolent and mythical central planner from these social choice theories show what the welfare gains and objectives of new designs should be.