Martin, Alberto; Ventura, Jaume - National Bureau of Economic Research <Cambridge, Mass.> - 2010
investors supply them. Because of this, bubbly episodeschannel resources towards productive investment raising the growth rates …We develop a stylized model of economic growth with bubbles. In this model, financial frictions leadto equilibrium … dispersion in the rates of return to investment. During bubbly episodes, unproductiveinvestors demand bubbles while productive …