Exchange Rate Implications of Reserve Changes: How Non-EZ European Countries Fared during the Great Recession

Kathryn Dominguez

No 647, Working Papers from Research Seminar in International Economics, University of Michigan

Abstract: The relationships between exchange rates, capital controls and foreign reserves during the financial crisis suggest that reserve management plays a much more central role than has typically been emphasized in international finance models. Reserves seem to be especially important for non-EZ European countries, not only for those with currencies in the ERM II, but also for those European countries in intermediate regimes that hope to deter currency market pressure, and in so doing help to mitigate trilemma trade-offs.

Keywords: foreign exchange reserves; global financial crisis; exchange market pressure (search for similar items in EconPapers)
JEL-codes: F32 F41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2014-02
New Economics Papers: this item is included in nep-cba, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: Exchange Rate Implications of Reserve Changes: How Non-EZ European Countries Fared during the Great Recession (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:mie:wpaper:647

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