Determinants of International Reserves: Empirical Evidence from Emerging Asia

Chandan Sharma and Sunny Singh ()

Economics Bulletin, 2014, vol. 34, issue 3, 1696-1703

Abstract: In this study, we attempt to estimate the long term determinants of international reserves in the emerging Asian for the period 1980-2011. In this study, we attempt to estimate the long term determinants of international reserves in the emerging Asia for the period 1980-2011. Utilizing a well-established panel data estimation technique fully modified OLS (FMOLS), we find that trade openness, country size, export volatility and opportunity cost of reserve accumulation are significant factors explaining the determinants of international reserves in the emerging Asia. Under the environment of high dependency on inelastic imports and capital mobility with frequent and costly financial crises, it seems that these countries self-insurance themselves against the possible currency crisis.

Keywords: International reserves; Emerging Asia, Panel Cointegration, FMOLS (search for similar items in EconPapers)
JEL-codes: C5 F3 (search for similar items in EconPapers)
Date: 2014-08-06
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Citations: View citations in EconPapers (1)

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