For a Few Dollars More: Reserves and Growth in Times of Crises

M. Bussi Re, Gong Cheng, Menzie Chinn and Noëmie Lisack

Working papers from Banque de France

Abstract: Based on a dataset of 112 emerging economies and developing countries, this paper addresses the question whether the accumulation of international reserves has effectively protected countries during the 2008-09 financial crisis. More specifically, the paper investigates the relation between international reserves and the existence of capital controls. We find that the level of reserves matters: countries with high reserves relative to short-term debt suffered less from the crisis, particularly when associated with a less open capital account. This suggests some degree of complementarity between reserve accumulation and capital controls.

Keywords: Foreign reserves; capital controls; financial crises; economic growth. (search for similar items in EconPapers)
JEL-codes: F31 G01 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2015
New Economics Papers: this item is included in nep-ifn, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Related works:
Journal Article: For a few dollars more: Reserves and growth in times of crises (2015)
Working Paper: For a Few Dollars More: Reserves and Growth in Times of Crises (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:550

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