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The Demand Cor International Reserves And Their Opportunity Cost
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Book Synopsis The Demand Cor International Reserves and their Opportunity Cost by : International Monetary Fund
Download or read book The Demand Cor International Reserves and their Opportunity Cost written by International Monetary Fund and published by International Monetary Fund. This book was released on 1988-12-08 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: An empirical study that shows that countries’ reserve holdings are sensitive to the rates at which they can borrow on international financial markets, this analysis confirms the view that holding major currencies as reserve assets has costs that are frequently unrecognized. Between 1978-82 for 24 sample countries, and between 1978-86 for the same sample less those countries with debt-servicing difficulties, international borrowing costs were found to be a highly significant determinant of reserve holdings—particularly before 1982 for the group with debt difficulties.
Book Synopsis The Demand for International Reserves and Their Opportunity Cost by : Joslin Landell-Mills
Download or read book The Demand for International Reserves and Their Opportunity Cost written by Joslin Landell-Mills and published by . This book was released on 1988 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis On the Interest Rate Elasticity of the Demand for International Reserves by : Sebastian Edwards
Download or read book On the Interest Rate Elasticity of the Demand for International Reserves written by Sebastian Edwards and published by . This book was released on 1985 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Contrary to what is suggested by the theory, most empirical studies on the demand for international reserves have failed to find a significant(negative) coefficient for the opportunity cost of holding reserves. In this paper it is argued that the reason for this is that the opportunity cost of holding international reserves has been measured incorrectly. In the empirical analysis presented in this paper the spread between the interest rate at which countries can borrow from abroad and LIBOR is used as a proxy for the net opportunity cost for holding reserves. The results obtained using data for a group of developing countries for 1976-198O show that when this net opportunity cost is used, the regression coefficient is significantly negative.
Book Synopsis The Demand for International Reserves by : M. June Flanders
Download or read book The Demand for International Reserves written by M. June Flanders and published by . This book was released on 1971 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Demand for and Supply of International Reserves by : Mohsen Bahmani-Oskooee
Download or read book Demand for and Supply of International Reserves written by Mohsen Bahmani-Oskooee and published by . This book was released on 1981 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Four Essays on International Reserves by : Hee-Ryang Ra
Download or read book Four Essays on International Reserves written by Hee-Ryang Ra and published by . This book was released on 2007 with total page 392 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay three investigates the possible links between the reserve accumulation by developing countries and an endogenous decrease in the magnitude of the opportunity cost effect. An increase in the reserves decreases the risk of liquidity problems imposed by a sudden capital outflow, which results in a decrease in the opportunity cost of holding reserves. Thus, a high level of reserves may make the negative opportunity cost effect smaller. Generally, our empirical results support this interpretation.
Book Synopsis Holding International Reserves in an Era of High Capital Mobility by : Robert P. Flood
Download or read book Holding International Reserves in an Era of High Capital Mobility written by Robert P. Flood and published by International Monetary Fund. This book was released on 2002-04 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why do countries hold so much international reserves? Global reserve holdings (excluding gold) were equivalent to 17 weeks of imports at the end of 1999. That is almost double what they were at the end of 1960 and about 20 percent higher than they were at the start of the 1990s. In this paper we study countries’ reserve holdings in light of both the increased financial volatility experienced in the last decade and diminished adherence to fixed exchange rates. We find that buffer-stock reserve models work about as well in the modern floating-rate period as they did during the Bretton Woods regime. During both periods, however, the models’ fundamentals explain only a small portion (10-15 percent) of reserves volatility.
Book Synopsis The Determinants of the Demand for International Reserves in Mexico by : Jorge Garza-Rodriguez
Download or read book The Determinants of the Demand for International Reserves in Mexico written by Jorge Garza-Rodriguez and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this research was to identify the determinants of international reserves in Mexico. Using a Vector Error Correction Model, it was found that foreign portfolio investment has a significant positive effect on the demand for reserves both in the short run as in the long run. A decrease in the average propensity to import causes an increase in the demand for reserves in the long run, while in the short run the effect is the opposite.On the other hand, the long-term effects of exchange rate volatility, short-term external debt and the opportunity cost on the demand for reserves are statistically significant only in the short run but not in the long run. It was concluded that the demand for international reserves in Mexico can be explained in the long run by the marginal propensity to import and indirect foreign investment, while in the short run it can be explained by the volatility of the exchange rate, the average propensity to import, short-term external debt, the opportunity cost of reserves and by monetary imbalances.
Book Synopsis A Fiscal Price Tag for International Reserves by : David Hauner
Download or read book A Fiscal Price Tag for International Reserves written by David Hauner and published by International Monetary Fund. This book was released on 2005-04 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the (quasi-)fiscal impact of the (opportunity) cost of international reserves. It proposes a conceptual framework, with particular emphasis on two hitherto somewhat neglected aspects: a more appropriate measure of gross opportunity cost, and potential savings from lower external debt spreads that countries "buy" by holding reserves. The framework is then applied to 100 countries over 1990-2004. The results suggest that a turning point has been reached in recent years: while most countries made money on their reserves during 1990-2001, most have been losing money during 2002-04.
Book Synopsis The Disturbances Approach to the Demand for International Reserves by : F. Steb Hipple
Download or read book The Disturbances Approach to the Demand for International Reserves written by F. Steb Hipple and published by . This book was released on 1974 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis International Reserves by : Joshua Aizenman
Download or read book International Reserves written by Joshua Aizenman and published by International Monetary Fund. This book was released on 2005-10 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This paper tests the importance of precautionary and mercantilist motives in accounting for the hoarding of international reserves by developing countries, and provides a model that quantifies the welfare gains from optimal management of international reserves. While the variables associated with the mercantilist motive are statistically significant, their economic importance in accounting for reserve hoarding is close to zero and is dwarfed by other variables. Overall, the empirical results are in line with the precautionary demand. The effects of financial crises have been localized, increasing reserve hoarding in the aftermath of crises mostly in countries located in the affected region, but not in other regions. We also investigate the micro foundation of precautionary demand, extending Diamond and Dybvig (1983)'s model to an open, emerging market economy where banks finance long-term projects with short-term deposits. We identify circumstances that lead to large precautionary demand for international reserves, providing self-insurance against the adverse output effects of sudden stop and capital flight shocks. This would be the case if premature liquidation of long-term projects is costly, and the economy is de-facto integrated with the global financial system, hence sudden stops and capital flight may reduce deposits sharply. We show that the welfare gain from the optimal management of international reserves is of a first-order magnitude, reducing the welfare cost of liquidity shocks from a first-order to a second-order magnitude"--NBER website
Book Synopsis A Monetarist Model of the Demand for International Reserves by : DeAnne S. Julius
Download or read book A Monetarist Model of the Demand for International Reserves written by DeAnne S. Julius and published by . This book was released on 1975 with total page 270 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Austria's Demand for International Reserves and Monetary Disequilibrium by : Harald Badinger
Download or read book Austria's Demand for International Reserves and Monetary Disequilibrium written by Harald Badinger and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a vector error correction approach, I estimate Austria's demand for international reserves over the period 1985:1-1997:4 and test for short-run effects of the disequilibrium on the national monetary market. I find that Austria's long-run reserve demand can be described as a stable function of imports, uncertainty and the opportunity cost of holding reserves with strong economies of scale. The speed of adjustment takes a value of 38 per cent. The results confirm that an excess of money demand (supply) induces an inflow (outflow) of international reserves as postulated by the monetary approach to the balance of payments.
Book Synopsis The High Demand for International Reserves in the Far East by : Joshua Aizenman
Download or read book The High Demand for International Reserves in the Far East written by Joshua Aizenman and published by . This book was released on 2002 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores econometric and theoretical interpretations for the relatively high demand for international reserves by countries in the Far East and the relatively low demand by some other developing countries. Using a sample of about 125 developing countries, we show that reserve holdings over the 1980-1996 period seem to be the predictable outcome of a few key factors, such as the size of international transactions, their volatility, the exchange-rate arrangement, and political considerations. The estimating equation does a good job of predicting reserve holdings in Asia before the 1997 financial crisis. After the crisis, the estimating equation significantly under-predicts the reserve holdings of several key Far East countries, as one might expect from the Lucas Critique. This under-prediction is consistent with models explaining reserve demand in developing countries. Specifically, we show that sovereign risk and costly tax collection to cover fiscal liabilities lead to a relatively large precautionary demand for international reserves. In the aftermath of a crisis, countries that have to deal with higher perceived sovereign risk and higher fiscal liabilities (both funded and unfunded) will opt to increase their demand for reserves. The models also help us understand why some developing countries do not hold large precautionary reserve balances in the aftermath of crises. Countries with high discount rates, political instability or political corruption find it optimal to hold smaller precautionary balances. We also show that models that incorporate loss aversion predict a relatively large demand for international reserves. Hence, if a crisis increases the volatility of shocks and/or loss aversion, it will greatly increase the demand for international reserves. Consequently, we conclude that the puzzling' pattern in international reserve holdings is reasonably explained by the extended models described in this paper.
Book Synopsis The Need for International Reserves and Credit Facilities by : J. de Beaufort Wijnholds
Download or read book The Need for International Reserves and Credit Facilities written by J. de Beaufort Wijnholds and published by Springer. This book was released on 1977-07-31 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: International monetary economics essentially deals with three problems, viz. the nature and stability of the international monetary system, the balance of payments adjustment process, and international liquidity (reserves and credit facilities). All three categories are interrelated. The exchange rate system has an important bearing on the manner in which the adjustment process functions, as well as on the need for international liquidity. The adjustment process is an important determinant of the need for international liquidity. The adequacy of international liquidity influences the working of the adjustment process. Ultimately, developments in international liquidity and in the adjustment process determine the nature and stability of the international monetary system; a sustained malfunctioning of the adjustment process - brought about by a serious imbalance in international liquidity or by other causes - will bring about a new international monetary system, either through collapse or reform of the old system. This study deals only with the problem of international liquidity. However, it touches on the two other main aspects of international monetary economics insofar as they have a bearing on international reserves and credit facilities. In the literature international liquidity is most often defined as including international reserves (gold, SDRs, foreign exchange and claims on the IMF) and international credit facilities (IMF drawing rights, EEC support arrangements and central bank multilateral and bilateral credit facilities). This definition will also be followed in this study.
Book Synopsis The Level of a Central Bank's International Reserves by : Taru Lehto
Download or read book The Level of a Central Bank's International Reserves written by Taru Lehto and published by . This book was released on 1994 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt: Tiivistelmä.
Book Synopsis International Reserves and Foreign Currency Liquidity by : International Monetary Fund. Statistics Dept.
Download or read book International Reserves and Foreign Currency Liquidity written by International Monetary Fund. Statistics Dept. and published by International Monetary Fund. This book was released on 2015-01-07 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: This update of the guidelines published in 2001 sets forth the underlying framework for the Reserves Data Template and provides operational advice for its use. The updated version also includes three new appendices aimed at assisting member countries in reporting the required data.
