The Optimal Level of International Reserves for Emerging Market Countries : Formulas and Applications /
We present a model of the optimal level of international reserves for a small open economy that is vulnerable to sudden stops in capital flows. Reserves allow the country to smooth domestic absorption in response to sudden stops, but yield a lower return than the interest rate on the country's...
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| Άλλοι συγγραφείς: | |
| Μορφή: | Επιστημονικό περιοδικό |
| Γλώσσα: | English |
| Έκδοση: |
Washington, D.C. :
International Monetary Fund,
2006.
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| Σειρά: | IMF Working Papers; Working Paper ;
No. 2006/229 |
| Διαθέσιμο Online: | Full text available on IMF |
| Περίληψη: | We present a model of the optimal level of international reserves for a small open economy that is vulnerable to sudden stops in capital flows. Reserves allow the country to smooth domestic absorption in response to sudden stops, but yield a lower return than the interest rate on the country's long-term debt. We derive a formula for the optimal level of reserves, and show that plausible calibrations can explain reserves of the order of magnitude observed in many emerging market countries. However, the recent buildup of reserves in Asia seems in excess of what would be implied by an insurance motive against sudden stops. |
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| Περιγραφή τεκμηρίου: | <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required |
| Φυσική περιγραφή: | 1 online resource (33 pages) |
| Μορφή: | Mode of access: Internet |
| ISSN: | 1018-5941 |
| Πρόσβαση: | Electronic access restricted to authorized BRAC University faculty, staff and students |