The paper examines to what extent a high public debt implies high vulnerability of a fixed exchange regime to currency crises. We combine a model of optimal debt repudiation, through inflation-devaluation, with a stochastic balance of payments crisis model.

This paper outlines a 15-year program for implementing the 2015 Human Development targets while resolving fully the debt overhang problem for a set of 49 poor countries. The proposal requires additional contributions from 23 rich countries amounting to 0.1 of 1% of their GDP over each of the 15...