The Optimal Level of International Reserves for Emerging Market Countries
A New Formula and Some Applications
Bibliographic Data
| ID | 9702983 |
|---|---|
| Authors | Olivier Jeanne (Johns Hopkins University), Romain Rancière (Paris School of Economics and Centre for Economic Policy Research) |
| Year | 2011 |
| Volume | 121 |
| Issue | 555 |
| Pages | 905-930 |
| Publication date | 2011-09-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2011.02435.x |
| OpenAlex | W2124302254 |
| Language | EN |
| Citations received | 15 |
| References cited | 28 |
We present a model of the optimal level of international reserves for a small open economy seeking insurance against sudden stops in capital flows. We derive a formula for the optimal level of reserves and show that plausible calibrations can explain reserves of the order of magnitude observed in many emerging market countries. The buildup of reserves in emerging market Asia can be explained only if one assumes a large anticipated output cost of sudden stops and a high level of risk aversion
Capital (architecture · Capital flows · Economics · Emerging markets · Expected utility hypothesis · Financial economics · Geography · Macroeconomics · Microeconomics · Monetary economics · Order (exchange · Risk aversion (psychology · Sudden stop · Economic theories and models · Finance · Global Financial Crisis and Policies · Market Dynamics and Volatility · Monetary Policy and Economic Impact
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| Unique citing works | 15 |
|---|---|
| Citations per year | 1,07 |
| Citation span | 2012 - 2026 (15) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 15 |