We study the efficiency of credit market equilibria when financial intermediaries cannot observe the riskiness or the returns of potential investment projects. With loan financing, there is over-investment in high-return, high-risk projects and under-investment in low-return, low-risk projects...

We develop a search model of venture capital where the number of successful matches of entrepreneurs and venture capitalists (VCs) at any moment in time is a function of the number of entrepreneurs searching for funds, the number of VCs searching for entrepreneurs, and the number of vacancies...

Mexico has experimented with a number of tax instruments designed to promote private capital formation. Among such initiatives are general and industry specific tax credits, employment tax credits, and corporate tax reductions. This paper examines the relative efficacy of such instruments using...

The authors review experiences with fiscal federalism in industrial countries and present a framework for a reform of fiscal systems in developing and transition economies. They indicate how the benefits of decentralized decisionmaking in a federal system can be achieved in a manner consistent...