[Princeton University Press (1993)] Robert Townsend has made path- breaking contributions to contract theory and general equilibrium analysis. In this book, he combines the theory of general economic equilibrium with the notion that allocations and institutions of a given economy might be Pareto optimal to try to explain various salient features of the medieval village economy. The medieval village economy in many ways reflects the economies of poor high-risk agrarian villages of the contemporary world and serves as an ideal testing ground for Townsend's theories. The environment of the medieval village resembles those of relatively simple models with such key elements as uncertainty and private information, and its institutions display distinctive features such as fragmented landholding patterns. In this book standard models of macroeconomics and the literature on contract theory and mechanism design are reinterpreted, applied, and extended. The author draws both descriptive institutional material and particular parameter values from historical observations, and characterizes solutions to the models analytically and numerically. The idea is to see whether the observed outcomes can be explained, shedding light both on the historical material and the models themselves.

[Basil Blackwell Inc. (1990)] This volume focuses on how groups of economic agents organize themselves, with a special interest in the financial arrangements they adopt. This is achieved primarily through the development and refinement of neoclassical models incorporating transactions costs and impediments to trade, but also through parallels with the organization of real economies drawn from the history of early Europe. The author demonstrates that the key elements determining financial structure and economic organization in history are the key features in the described environments of modern economics models. These include the facts that economics agents are separated in time and space; economic life is full of uncertainty; there are sometimes difficulties of communication among agents; and there can be problems in getting agents to commit to arrangements, the difficulties of costly and limited enforcement. Analyzing these central issues both in theory and in history, Professor Townsend makes a highly original contribution to the understanding of the diverse forms of economic and financial organization.