Burak Uras
Assistant professor Department of Economics
"Understanding the economic implications of finance is important for designing policies that could benefit the society as a whole."
What is the main goal of your research?
My research mainly concentrates on understanding the implications of financial infrastructure for macroeconomic development. The financial sector stimulates economic development to the extent it enables the efficient allocation of resources - among individuals and over time. In a main line of research, I develop macro models with firm-level decision making in order to evaluate the aggregate consequences of financial development.
To give some examples, in a recent paper co-authored with Ping Wang (Washington University), I show that financially constrained firms prefer to obtain a high degree of input flexibility (relative to the unconstrained ones) and investigate the aggregate consequences of this cross-sectional differentiation of firms implied by imperfect financial markets. In another paper (financed by a DFID grant) co-authored by Thorsten Beck (Cass Business School), Haki Pamuk (Wageningen University) and Ravindra Ramrattan (FSD-Kenya), I explore the macro-development effects of Kenya’s Mobile-Money innovation - a technology that allows users to transfer money using cellular-phone networks. The main results from this research indicate that the development of electronic payment instruments can relax trade-credit constraints and alleviate barriers to business growth for firms with limited access to formal financial services and thereby raise macroeconomic-output by quantitatively large proportions.
How does your research contribute to help with societal problems?
Understanding the economic implications of finance is important for designing policies that could benefit the society as a whole. Additionally as important is to construct a financial infrastructure that can also help improve the welfare status of under-privileged individuals. Another line of my research concentrates on addressing questions in this area.
To give some examples from this second line of research, in a recent paper co-authored with Francesco Carli (Deakin University), I propose a novel joint-liability contracting design that could reduce financial commitment problems and facilitate access to credit for low-income households and entrepreneurs. Similarly, in a DFID-grant paper together with Patricio Dalton, Daan van Soest (both at Tilburg University) and Haki Pamuk, I implement a Randomized-Control-Trial (RCT) in Kenya to investigate the determinants and business outcomes of the adoption of Mobile Money by small enterprises. In another RCT-based project (also funded by DFID), together with Patricio Dalton, Julius Rüschenpöhler (Tilburg University) and Bilal Zia (World Bank), I explore the role of business practices in lowering barriers to growth for small retail-shops in Indonesia.
What is your main motivation for your research?
I find the interactions between financial development and the historical development of civilizations very intriguing. Ever since the invention of writing and the start of recorded history, welfare-enhancing implications of finance have been undeniably vital in making advanced societies possible. Interestingly, this even includes to a certain extent the invention of early forms of writing - as some of the initial cuneiform tablets excavated in Mesopotamia contain records of financial transactions.
Who is your role model?
I don’t really have a role model. But, I can most easily say that I learn a great deal from my co-authors and other colleagues in the academic network on how to develop societally relevant research questions and how to design research projects capable of addressing these questions. I see this as one of the great virtues of the academic profession.