Paradoxically, high-investment and high-growth developing countries tend toexperience capital outows. This paper shows that this allocation puzzle can beexplained simply by introducing uninsurable idiosyncratic investment risk in theneoclassical growth model. Using a sample of 67 countries...

We show that since 1994, branching deregulations in the U.S have signi…cantly af-fected the supply of mortgage credit, and ultimately house prices. With deregulation,the number and volume of originated mortgage loans increase, while denial rates fall.But the deregulation has no effect on a...

We develop a model of real investment and cash holdings in which firms face uncertaintyregarding their ability to raise funds in the capital markets and have to search for investorswhen raising outside capital. We provide an explicit characterization of the optimal investment,cash management,...

We use a user-cost model to study how dispersed information among housing marketparticipants a¤ects the equilibrium house price. In the model, agents are disparatelyinformed about local economic conditions, consume housing services, and speculate onprice changes. Information dispersion leads...