He, Zhiguo; Kondor, Péter - National Bureau of Economic Research (NBER) - 2012
We develop a dynamic model of trading and investment with limited aggregate resources to study investment cycles …. Unverifiable idiosyncratic investment opportunities imply market prices to play a role of rent distribution, distorting private … investment incentives from a social point of view. This distortion is price-dependent, leading to two-sided inefficient …