Entrepreneurship, growth and total factor productivity are larger when there is a financial bubble. We explain these … with bubbles. Finally, productivity can be larger when the bubble further increases the investment of more productive … facts using a growth model with financial bubbles in which individuals face heterogeneous wages and returns on productive …

Can stock market bubbles accelerate long term growth? Do such bubbles indicate irrational behavior? This paper studies …-term growth. This setup may also be used to explain the accelerated productivity that followed the bursting of notable technology … related bubbles such as the railway bubble of 19th century England and the 20th century ICT bubble. Attributing a productive …