As China reformed its economy during the past 44 years, it experienced the fastest sustained expansion by a major economy in history, with an annual rate of GDP growth averaging nearly 10% from 1978 to 2018. In the past decade, however, the rate of growth has noticeably slowed, falling to just...

We analyze investment decisions when information is costly, with and without delegation to an agent. We use a rational-inattention model and compare it with a canonical signal-extraction model. We identify three "investment conditions". In "sour" conditions, no information is acquired and no...