02215cas a2200277 a 4500 AALejournalIMF014310 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475579772 1018-5941 BD-DhAAL BD-DhAAL Berg, Andrew. Assessing Bias and Accuracy in the World Bank-IMF's Debt Sustainability Framework for Low-Income Countries / Andrew Berg, Enrico Berkes, Catherine Pattillo, Andrea Presbitero. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (39 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The World Bank and the IMF have adopted a debt sustainability framework (DSF) to evaluate the risk of debt distress in Low Income Countries (LICs). At the core of the DSF are empirically-based thresholds for each of five different measures of the debt burden (the 'debt threshold approach' DTA). The DSF contains a rule for aggregating the information contained in these five different variables which we label the 'worst-case aggregator' (WCA) in view of the fact that the DSF considers a breach of any one of the thresholds sufficient to indicate a high risk of debt distress. However, neither the DTA nor the WCA has heretofore been subject to empirical testing. We find that: (1) the DTA loses information relative to a simple proposed alternative; (2) the WCA is too conservative (predicting crises too often) in terms of the loss function used in the DSF; and (3) the WCA is less accurate than some simple proposed alternative aggregators as a predictor of debt distress. Mode of access: Internet Berkes, Enrico. Pattillo, Catherine. Presbitero, Andrea. IMF Working Papers; Working Paper ; No. 2014/048 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/048/001.2014.issue-048-en.xml IMF e-Library