The arrival of new, unfamiliar, investment opportunities - e.g., internet commerce, emerging markets, novel financial instruments - is often associated with large, "exuberant," movements in asset prices and real investment. While irrational explanations of these phenomena abound, in this paper...

Information regarding economic fundamentals is widely dispersed in society, is only imperfectly aggregated through prices or other indicators of aggregate activity, and can not be centralized by the government or any other institution. In this paper we seek to identify policies that can improve...