The relationship between asset prices and fundamentals is characterized by both disconnect and predictability: asset prices are largely disconnected from current publicly observed fundamentals and at the same time contain information about future fundamentals, even when conditioning on current...

We use a two period model to analyze the contractual relationship between entrepreneurs and venture capitalists in an open regional economy. First, we describe the first best investment contract, we study the second best investment contract in the presence of private information, and then we...

We use a two period model to analyze the contractual relationship between entrepreneurs and venture capitalists in an open regional economy. First, we describe the first best investment contract, we study the second best investment contract in the presence of private information, and then we...

We analyze two hitherto little studied but salient questions concerning the trinity of asymmetric information, entrepreneurial activity, and the scope of fiscal policy in an open regional economy. First, we use a two period model to analyze the contractual relationship between entrepreneurs and...