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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
The Recent Growth Of International Reserves In Developing Economies: A Monetary Perspective, Gonçalo Pina
The Recent Growth Of International Reserves In Developing Economies: A Monetary Perspective, Gonçalo Pina
Economics
The massive accumulation of international reserves in developing economies is a puzzling recent development in the world economy. This paper studies reserve accumulation as the outcome of a simple model in which the central bank smooths inflation. I explore the view that central banks accumulate reserves to face large fiscal shocks that need monetary financing. Central bank revenues are obtained through inflation, but inflation is distortionary. As a result, the central bank optimally accumulates international reserves in order to spread the costs associated with inflation over time. A simple numerical exercise for an average developing economy using data between 1970 …
Nonlinear Adjustments Between Exchange Rates And External Reserves In Nigeria: A Threshold Cointegration Analysis, Isaiah O. Ajibola, Ubong S. Udoette, Babatunde S. Omotosho, Rabia A. Muhammad
Nonlinear Adjustments Between Exchange Rates And External Reserves In Nigeria: A Threshold Cointegration Analysis, Isaiah O. Ajibola, Ubong S. Udoette, Babatunde S. Omotosho, Rabia A. Muhammad
CBN Journal of Applied Statistics (JAS)
This study investigates the long run relationship between exchange rate and external reserves in Nigeria during 1990Q1 – 2012Q4. We confirm the existence of threshold cointegration between the variables in Nigeria, as against linear cointegration. Consequently, a two-regime threshold vector error correction model (TVECM) is estimated via maximum likelihood procedure. Model results indicate that cointegration between the variables occurs only when the equilibrium error exceeds an estimated threshold parameter of 0.52. Having partitioned the TVECM into two regimes based on the obtained threshold, we find that the error correction coefficients of the exchange rate in the two regimes are not …
Drug Violence, The Peso, And Northern Border Retail Activity In Mexico, Thomas M. Fullerton Jr., Adam G. Walke
Drug Violence, The Peso, And Northern Border Retail Activity In Mexico, Thomas M. Fullerton Jr., Adam G. Walke
Border Region Modeling Project
Exchange rate fluctuations and international business cycles may acutely affect retail sales in border regions where residents have the option of shopping in the neighboring country. This study examines the determinants of retail sales in six cities located along Mexico’s northern border. Retail activity in these cities is found to increase in tandem with real depreciations of the peso, lower unemployment rates in neighboring US counties, and increased border crossings. Taken together, these results suggest that cross-border shopping contributes to retail activity in the northern border region of Mexico. The opportunities for cross-border shopping may also condition the impact of …