THE DETERMINANTS OF THE DEMAND FOR INTERNATIONAL RESERVES IN MEXICO A VECTOR ERROR CORRECTION MODEL

Jorge Garza-Rodriguez, Luis F Gonzalez-Gamez (), Benjamin Izaguirre-Monsibaiz (), Daniel A Nader-Deleon () and Erick H Treviño-Carrillo ()

Journal of Advanced Studies in Finance, 2015, vol. 6, issue 1, 11-19

Abstract: The objective of this research was to identify the determinants of international reserves in Mexico Using a Vector Error Correction Model it was found that foreign portfolio investment has a significant positive effect on the demand for reserves both in the short run as in the long run A decrease in the average propensity to import causes an increase in the demand for reserves in the long run while in the short run the effect is the opposite On the other hand the long term effects of exchange rate volatility short term external debt and the opportunity cost on the demand for reserves are statistically significant only in the short run but not in the long run It was concluded that the demand for international reserves in Mexico can be explained in the long run by the marginal propensity to import and indirect foreign investment while in the short run it can be explained by the volatility of the exchange rate the average propensity to import short term external debt the opportunity cost of reserves and by monetary imbalances

Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:srs:jasf00:v:6:y:2015:i:1:p:11-19

Access Statistics for this article

Journal of Advanced Studies in Finance is currently edited by Laura GAVRILĂ (formerly Ştefănescu)

More articles in Journal of Advanced Studies in Finance from ASERS Publishing
Bibliographic data for series maintained by Claudiu Popirlan ( this e-mail address is bad, please contact ).