When individual returns are increasing in the aggregate level of investment, decentralized individuals fail to … internalize the positive externality of their investment on the return of others. This paper shows how financial intermediation …, intermediaries induce investment by individuals with unfavorable private information. The increase in investment generates positive …

The arrival of new, unfamiliar, investment opportunities is often associated with "exuberant" movements in asset prices … signals about the profitability of the new investment opportunities, and vice versa. In this paper, we study how such …

Private information and costly state verification often result in credit rationing in models with smooth investment …, affecting both loan size and total investment. The optimal contract is derived in a dynamic stochastic growth model with capital …

This paper characterizes the relationship between entrepreneurial wealth and aggregate investment under adverse … analysis: (i) pooling equilibria, in which investment is independent of entrepreneurial wealth, are more likely to arise when … entrepreneurial wealth is relatively low; (ii) separating equilibria, in which investment is increasing in entrepreneurial wealth, are …

liquidity and investment. Investment is inefficiently low because banks must sell high-quality assets below their "fair" value … investment to fall. Asset purchase programs often improve liquidity, investment and welfare. …

The analysis of inflation’s effect on investment can contribute to a deeper understanding of the benefits of a monetary … conclusions about the inflation-investment relationship that can be drawn from traditional monetary models with exogenous growth …-makers to fail to take proper account of inflation’s impact on investment. We then survey research which, contrary to monetary …

There is ample evidence from economic growth literature that investment accelerates economic growth and development of … focused more on encouraging private sector investment through the development of the financial sector. This paper investigates … the short- and long-run impact of financial development on private investment in Ghana for the years 1970 …