In 2000 commentators everywhere were hailing the boom in some western economies as the dawn of a new economy. In 2001, with a slowdown biting in the US economy, dot.coms folding and information and communications technology firms feeling the pinch globally, the headline writers have swung the...

I study the allocation of human capital in an economy with production externalities, financial constraints and career choices. Agents choose to become entrepreneurs, workers or financiers. Entrepreneurship has positive externalities, but innovators face borrowing constraints and require the...