This paper analyzes the existence and the effects of bubbles in an endogenous growth model with financial frictions and heterogeneous investments. Bubbles are likely to emerge when the degree of pledgeability is in the middle range. This implies that improving the financial market might enhance...

This paper analyzes the existence and the effects of bubbles in an endogenous growth model with financial frictions and heterogeneous investments. Bubbles are likely to emerge when the degree of pledgeability is in the middle range. This suggests that improving the financial market might enhance...

This paper examines the development processes of a country when the degree of verifiability is endogenously determined. We assume that labor input into the enforcement sector is necessary for improving the degree of verifiability. The main result is that although efforts to improve verifiability...