The Strategies of from Balanced to Slantingly Unbalanced Development of Regional Economy
Reviewing briefly the implementation of strategy f or the development of regional economy in China in the past and its influence and consequence,this paper inquires into the way of how to perfect such strategy to a consummate one .
Credit agencies rate the quality of risky debt issued by firms, who themselves pay fortheseratings.Thispaymentstructurecreatesanincentiveproblemwithrespect to rating accuracy. This paper constructs an equilibrium model for studying the efficiency of this payment scheme and its accuracy. We show that this payment scheme increases welfare for the firm’s shareholders but generates inaccurate ratings that accentuate the credit risk business cycle. As the number of rated debt issues grows, however, the payment scheme inefficiency goes to zero and the ratings inaccuracy disappears.