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We study a two-sector economy with investments in human and physical capital and imperfect labor markets. Human and physical capital are heterogeneous. Workers and firms endogenously select the sector they are active in, and choose the amount of their sector-specific investments in human and...
Persistent link: https://www.econbiz.de/10011739811
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capital. We show that the competitive equilibrium is constrained inefficient, leading to too little risky investment. We also …
Persistent link: https://www.econbiz.de/10012459478
investment and growth. The increased risk from holding biased portfolios, which increases the demand for the risk-free asset …
Persistent link: https://www.econbiz.de/10012966469
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 …
Persistent link: https://www.econbiz.de/10012460443
We study a two-sector economy with investments in human and physical capital and imperfect labor markets. Human and physical capital are heterogeneous. Workers and firms endogenously select the sector they are active in, and choose the amount of their sector-specific investments in human and...
Persistent link: https://www.econbiz.de/10014195459
We explore one specific channel through which finance promotes growth: the allocation of capital. Using international industrial data, we find that countries with developed financial markets invest more in growing industries, and pull out more funds of declining ones. Most interestingly, this...
Persistent link: https://www.econbiz.de/10014046865
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