Homoclinic bifurcation and global indeterminacy of equilibrium in a two-sector endogenous growth model

This paper considers an endogenous growth model that belongs to the same family as the Lucas model. In the Lucas model an external effect appears in the physical-goods sector, whereas in our model, it appears in the educational sector. In our model, this external effect yields multiple balanced growth paths. Our model undergoes a homoclinic bifurcation and exhibits global indeterminacy of equilibrium.     

Regional development and non-material public infrastructure

The aim of this paper is to investigate the conditions under which public investment can be allocated to the infrastructure in material and non-material capital so as to have a positive effect on regional development and interregional inequality. To investigate this issue, the paper focuses on the externalities created by investing in infrastructure for the transfer of information, know-how or technical knowledge.     

Managerial Myopia,Earnings Guidance,and Investment*

This study investigates the real effects of management communication, specifically of forecasts or earnings guidance, on investment. Managers can signal the strength of their projects through accuracy in their earnings guidance. This leads less accurate managers to distort their investments; the equilibrium investment strategy involves over-investment when earnings exceed the forecast and under-investment when earnings fall short. Moreover, we find that managers are pessimistic in their forecasts, which helps to explain the corresponding well-documented empirical regularity. This downward bias increases the likelihood of investment manipulation but decreases the real loss from distortion. Interestingly, the over-investment induced by earnings guidance helps to mitigate the classic under-investment problem for a myopic manager with unobservable investment. Earnings guidance can therefore be value-increasing when managerial myopia is severe.