EconPapers    
Economics at your fingertips  
 

Real Exchange Rate and International Reserves in an Era of Growing Financial and Trade Integration

Joshua Aizenman () and Daniel Riera-Crichton ()

The Review of Economics and Statistics, 2008, vol. 90, issue 4, 812-815

Abstract: This paper evaluates the impact of international reserves, terms-of-trade shocks, and capital flows on the real exchange rate (REER). We observe that international reserves cushion the impact of terms-of-trade shocks on REER, and that this effect is important for developing but not for industrial countries. This buffer effect is especially significant for Asian countries, and for countries exporting natural resources. Financial depth reduces the buffer role of international reserves in developing countries. Developing countries' REERs seem to be more sensitive to changes in reserve assets; whereas industrial countries display a significant relationship between hot money and REER. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (38) Track citations by RSS feed

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/rest.90.4.812 link to full text (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Real exchange rate and international reserves in an era of growing financial and trade integration* (2007) Downloads
Working Paper: Real Exchange Rate and International Reserves in the Era of Growing Financial and Trade Integration (2006) Downloads
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:tpr:restat:v:90:y:2008:i:4:p:812-815

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by Ann Olson ().

 
Page updated 2022-01-13
Handle: RePEc:tpr:restat:v:90:y:2008:i:4:p:812-815