The Demand for International Reserves in China

An ECM Model with Domestic Monetary Disequilibrium

Bibliographic Data

ID9726829
AuthorsJ L Ford, Guobo Huang (0000-0002-8396-0765)
Year1994
Volume61
Issue243
Pages379
Publication date1994-08-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherJSTOR (PUBLISHER)
DOI10.2307/2554622
OpenAlexW2023304717
LanguageEN
Citations received1
References cited8

This paper employs a version of the error correction model to investigate the demand for international reserves in a typical planned economy, China. Disturbances from the domestic markets are considered by incorporating the monetary disequilibrium into the model. The authors' main conclusions are that (1) reserve holdings in China have maintained a long-run relationship and a stable dynamic relationship with several determinants since the 1950s, confirming China's prudential foreign reserve policy; and (2) monetary disequilibrium has significant short-run effects on reserve holdings, reflecting the authorities' 'general balancing' policy in their annual planning. Copyright 1994 by The London School of Economics and Political Science

China · Disequilibrium · Economics · Foreign-exchange reserves · Geography · International economics · Macroeconomics · Monetary economics · Monetary hegemony · Monetary policy · Economic Policies and Impacts · Global Financial Crisis and Policies · Monetary Policy and Economic Impact

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