A Cross-Country Empirical Analysis of International Reserves

Yin-Wong Cheung and Hiro Ito

No 2654, CESifo Working Paper Series from CESifo

Abstract: Using data from more than 100 economies for the period of 1975 to 2005, we conduct an extensive empirical analysis of the determinants of international reserve holdings. Four groups of determinants, namely, traditional macro variables, financial variables, institutional variables, and dummy variables that control for individual economies’ characteristics are considered. We find that the relationship between international reserves and their determinants is significantly different between developed and developing economies and is not stable over time. The estimation results indicate that, especially during the recent period, a developed economy tends to hold a lower level of international reserves than a developing one. Furthermore, there is only limited evidence that East Asian economies including China and Japan are accumulating an excessive amount of international reserves.

Keywords: developed vs developing economies; excess hoarding; macro determinants; financial factors; institutional variables (search for similar items in EconPapers)
JEL-codes: F31 F34 F36 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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Journal Article: A Cross-Country Empirical Analysis of International Reserves (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2654

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