We analyse the debt dynamics in countries that benefited from the HIPC/MDRI debt relief initiatives with a view to applying a probabilistic approach to estimating future debt paths for those countries. We extend the probabilistic approach to public debt sustainability analysis (DSA) proposed by...

This discussion paper examines in its first part, the role of private investment in economic growth. While theoretical growth models developed in the economics literature, make no distinction between private, and public components of investment, there is an emerging appreciation that private...

The report is part of the continued investigation on the public-private investment relationship, and its focus for this year is on the quality of public investment, its interaction with corruption, and the resulting impact on private investment. The first chapter provides statistics on trends in...

This paper uses long-horizon autocorrelations and variance ratio statistics to test for long-term mean reversion in real exchange rates. Unlike most previous tests of this hypothesis, the tests do reject a random walk for monthly data in the post-Bretton Woods era; however, the statistics...

Under certain conditions, efficient markets imply random walk behavior in real exchange rates. Much of international finance theory, however, is based on the idea of purchasing power parity, which implies mean reversion in real exchange rates. This paper uses variance ratio statistics to test...

Previous attempts to reject the hypothesis that real exchange rates follow a random walk have produced mixed results. This paper incorporates mean reversion and conditional heteroscedasticity into tests based on a theoretical model of deviations from the law of one price by Dumas (1988). The...

An evaluation of the performance of foreign exchange hedges shows that, in a mean-variance framework, fully hedging exchange risk does not improve the performance of a portfolio of international equities; however, dynamic strategies which incorporate market information on risk premiums in the...