We find that the low average returns to firms with high asset growth are consistent with two key implications of models of diagnostic investor expectations (e.g., Bordalo, Gennaioli, La Porta, and Shleifer, 2019) that formalize the representativeness heuristic of Kahneman and Tversky (1972)....

This paper argues that California s self-help county tax legislation, which funds additional highway spending, amounts to a natural experiment that can be used to construct a valid instrument to determine highway congestion s causal effect on the growth rates of GDP, employment, wages, and...