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Journal articles
The Optimal Level of International Reserves For Emerging Market Countries: A New Formula and Some Applications
Abstract : We present a model of the optimal level of international reserves for a small open economy seeking insurance against sudden stops in capital flows. 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. The buildup of reserves in emerging market Asia can be explained only if one assumes a large anticipated output cost of sudden stops and a high level of risk aversion.
https://hal-pjse.archives-ouvertes.fr/halshs-00754518
Contributor : Caroline Bauer Connect in order to contact the contributor
Submitted on : Tuesday, November 20, 2012 - 9:51:07 AM
Last modification on : Friday, October 15, 2021 - 1:40:27 PM
Contributor : Caroline Bauer Connect in order to contact the contributor
Submitted on : Tuesday, November 20, 2012 - 9:51:07 AM
Last modification on : Friday, October 15, 2021 - 1:40:27 PM
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