This paper analyses corporate risk choice when firms and their managers have private information regarding firm quality. Managers – representing themselves or shareholders – have a short time horizon and wish to boost the firm’s reputation in the market. Investors observe the firm’s...

This study updates and extends to the period 1988/9--1992/3 our earlier analysis of the public finances of India. The foreign exchange crisis of early 1991 forced the government to recognize the severity of the fiscal crisis it was facing and led to the implementation of a restrictive fiscal and...

The paper studies the solvency of the Indian public sector and the eventual monetization and inflation implied by stabilization of the debt/GNP ratio without any changes in the primary deficit. The non-stationarity of the discounted public debt suggests that solvency cannot be maintained with an...

We analyze the risk levels chosen by agents who have private information regarding their quality, and whose performance will be judged and rewarded by outsiders. Assume that risk choice is observable. Even risk-neutral agents will choose risk strategically to enhance their expected reputation....