Imbs, Jean; Rancière, Romain - C.E.P.R. Discussion Papers - 2005
140% of exports. Second, we depart from reduced form growth regressions and perform direct tests of the theory on the thus …: (i) investment falls precipitously as it should when it becomes optimal to default; (ii) economic policy deteriorates … interest rates. We find a systematic response of investment, particularly when property rights are weakly enforced, some …