This paper investigates the implications of the Grossman-Stiglitz (1980) model on the informational efficiency of financial markets for the optimality of the allocation of talent to financial trading versus entrepreneurship. Informed traders make the financial market more informationally...

Standard R&D growth models have two disturbing properties: The presence of scale effects (i.e., the prediction that larger economies grow faster) and the implication that there is a multitude of growth-enhancing policies. Recent models of growth without scale effects, such as Segerstrom's...