Net Capital Flows, Financial Integration, and International Reserve Holdings: The Recent Experience of Emerging Markets and Advanced Economies
AbstractThe paper examines the link between net capital flows and international reserves emphasizing the external financing of reserve accumulation in the context of increasing international financial integration. The paper finds that the effect of net capital flows on reserve accumulation has shifted from negative to positive for emerging markets but not for advanced countries. The empirical results suggest that in recent years emerging markets, with concerns about sudden stops in capital flows, have rapidly built up reserves through external financing with net capital inflows, whereas the advanced countries, with more secure access to international finance, have balanced reserves accumulation with investments in higher-yielding foreign assets. IMF Staff Papers (2009) 56, 516–540. doi:10.1057/imfsp.2008.35; published online 17 February 2009
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal IMF Staff Papers.
Volume (Year): 56 (2009)
Issue (Month): 3 (August)
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- Enrique G. Mendoza & Ceyhun Bora Durdu & Marco Terrones, 2007.
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- Nkunde Mwase, 2012. "How much should I hold? Reserve Adequacy in Emerging Markets and Small Islands," IMF Working Papers 12/205, International Monetary Fund.
- Filardo , Andrew J. & Siklos , Pierre L., 2013. "Prolonged reserves accumulation, credit booms, asset prices and monetary policy in Asia," BOFIT Discussion Papers 5/2013, Bank of Finland, Institute for Economies in Transition.
- Joseph Joyce & Raul Razo-Garcia, 2011. "Reserves, quotas and the demand for international liquidity," The Review of International Organizations, Springer, vol. 6(3), pages 393-413, September.
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