For a few dollars more: Reserves and growth in times of crises

Matthieu Bussiere, Gong Cheng, Menzie Chinn and Noëmie Lisack

Journal of International Money and Finance, 2015, vol. 52, issue C, 127-145

Abstract: Based on a dataset of 112 emerging economies and developing countries, this paper addresses the question whether the accumulation of international reserves has effectively protected countries during the 2008–09 financial crisis. More specifically, the paper investigates the relation between international reserves and the existence of capital controls. We find that the level of reserves matters: countries with high reserves relative to short-term debt suffered less from the crisis, particularly when associated with a less open capital account. This suggests some degree of complementarity between reserve accumulation and capital controls.

Keywords: Foreign reserves; Capital controls; Financial crises; Economic growth (search for similar items in EconPapers)
JEL-codes: F31 G01 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (42)

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Working Paper: For a Few Dollars More: Reserves and Growth in Times of Crises (2015)
Working Paper: For a Few Dollars More: Reserves and Growth in Times of Crises (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:52:y:2015:i:c:p:127-145

DOI: 10.1016/j.jimonfin.2014.11.016

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