A re-examination of the forward exchange rate unbiasedness hypothesis

A Re-Examination of the Forward Exchange Rate Unbiasedness Hypothesis. — This paper applies the Phillips and Hansen estimation and inference procedures to re-examine the hypothesis that the forward exchange rate is an unbiased predictor of the future spot exchange rate. The results indicate that the 90-day forward exchange rate is not an unbiased predictor. However, the 90-day forward and future spot exchange rates are cointegrated. Only for the U.K. pound/U.S. dollar exchange rate is there an error correction representation. Overall, however, the evidence is consistent with the hypothesis that risk-averse agents in the forward foreign exchange market form expectations rationally.     

The Impact of Brain Drain on Human Capital in Developing Countries

The debate over the effect of human capital flight on educational attainment in immigrants' source countries has received huge theoretical propositions but a few analytical approaches. This paper examines the short‐run and long‐run impact of skilled migration rates (brain drain) on human capital formation in migrants' source developing countries. Specifically, we revisited some empirical studies that found evidence of beneficial brain drain in migrants' source countries. Our empirical result, using school enrolments does not only disagree with theirs but also presents an insight on how human capital leakages that occur through brain drain can be counterbalanced through remittances received in the immigrants' source countries.