lead to a market breakdown where information production ceases, and investment and firm value collapse. Our theory sheds …We analyze information production incentives for traders in financial markets, when firms condition investment …'s investment project increases with the ex ante likelihood the project will be undertaken. This generates an informational …

subject to borrowing constraints. At the heart of the analysis is the interplay among savings, investment, and the interest … rate. Bubbles are more likely to crowd investment in, the stronger is the intertemporal substitution in consumption, and … economy, where emergent bubbles are followed by the investment boom, but the bursting of bubbles results in the recession. The …