Open Access. Powered by Scholars. Published by Universities.®
Social and Behavioral Sciences Commons™
Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 3 of 3
Full-Text Articles in Social and Behavioral Sciences
International Reserves Before And After The Global Crisis: Is There No End To Hoarding?, Joshua Aizenman, Yin-Wong Cheung, Hiro Ito
International Reserves Before And After The Global Crisis: Is There No End To Hoarding?, Joshua Aizenman, Yin-Wong Cheung, Hiro Ito
Economics Faculty Publications and Presentations
We evaluate the global financial crisis (GFC) and the structural changes of recent years that have been associated with new patterns of hoarding international reserves. We confirm that the determining factors of international reserves are evolving with developments in the global economy. From 1999–2006, the pre-GFC period, gross saving is associated with higher international reserves in developing and emerging markets. An outward direct-investment effect is consistent with the view of diverting international assets from the international reserve account, the “Joneses’ effect” lends support to the rivalry hoarding motivation, and commodity price volatility induces hoarding against uncertainty. During the 2007–2009 GFC, …
The “Impossible Trinity” Hypothesis In An Era Of Global Imbalances: Measurement And Testing, Joshua Aizenman, Menzie David Chinn, Hiro Ito
The “Impossible Trinity” Hypothesis In An Era Of Global Imbalances: Measurement And Testing, Joshua Aizenman, Menzie David Chinn, Hiro Ito
Economics Faculty Publications and Presentations
We outline new metrics for measuring the trilemma aspects: exchange rate flexibility, monetary independence, and capital account openness, taking into account recent substantial international reserve accumulation. Since 2000, the trilemma variables in emerging markets have converged towards intermediate levels, characterizing by managed flexibility, using sizable international reserves as a buffer while retaining some degree of monetary autonomy. We test the linearity of the trilemma, and find that the weighted sum of the three trilemma variables adds up to a constant. Thus, a rise in one trilemma variable should be traded-off with a drop of the weighted sum of the other …
A Cross-Country Empirical Analysis Of International Reserves, Yin-Wong Cheung, Hiro Ito
A Cross-Country Empirical Analysis Of International Reserves, Yin-Wong Cheung, Hiro Ito
Economics Faculty Publications and Presentations
Using data from more than 100 economies for the period of 1975 to 2005, we conduct an extensive empirical analysis of the determinants of international reserve holdings. Four groups of determinants, namely, traditional macro variables, financial variables, institutional variables, and dummy variables that control for individual economies’ characteristics are considered. We find that the relationship between international reserves and their determinants is significantly different between developed and developing economies and is not stable over time. The estimation results indicate that, especially during the recent period, a developed economy tends to hold a lower level of international reserves than a developing …