Impact of economic growth on international reserve holdings in Brazil

Mohammad Kashif (), P. Sridharan () and S. Thiyagarajan ()

Brazilian Journal of Political Economy, 2017, vol. 37, issue 3, 605-614

Abstract: This study investigated the impact of economic growth on Brazilian international reserves holdings in the context of Error Correction Mechanism using data over the 1980-2014 period. The results reveal that economic growth is highly significant. From the estimation of our model, we argue that economic growth and international reserves have positive long run relationship. The estimates of error correction model are valid because error correction term is negative and statistically significant. Besides, our model suggested that economic growth has short run relationship too. The speed of adjustment is more than forty percent which indicated that error correction term corrects previous year disequilibrium at the rate of 40.4%. JEL Classification: F41; F43; F62.

Keywords: Brazil; economic growth; error correction model; international reserves. (search for similar items in EconPapers)
Date: 2017
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