technologies, some more risky than others. Investors can use low quality public information or collect high quality, but costly …, private information. Information helps avoiding excessively risky investments. Financial innovation lowers the incentives for … private information collection and deteriorates public information: the economy invests more often in excessively risky …

equilibrium model with banks and bank capital, in which bank capital solves an asymmetric information problem between banks and …

involve default risk. In this environment, changes in loan rates affect the size of the business sector. I explore how banks …

within a unified framework. Second, it incorporates a risk-taking channel by allowing the risk appetite of investors to …

information frictions predicts that, in boom periods or mild recessions, the degree of adverse selection in resale markets for …