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Revisiting Mrs. Machlup's Wardrobe: The Accumulation of International Reserves, 1992-2001

Author

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  • Graham Bird

    (University of Surrey)

  • Alex Mandilaras

    (University of Surrey)

Abstract

A fature of the late 1990s was the accumulation of International reserves in many countries. Against the background of this phenomenon, in what follows we investigate the following questions: how widely has the tendency to accumulate reserves been seen? Does the incidence of a currency crisis increase the subsequent demand for reserves? Do countries make choices between different combinations of exchange rate regime and reserve holding? Does an arrangement with the IMF encourage countries subsequently to build up reserves more than they otherwise would have done? Do different patterns emerge depending upon the measure of reserves used? In addressing the above questions, we find significant support for the 'Mrs. Machlup's Wardrobe Theory' of international reserves, which purports that irrespective of the amount of reserves countries have accumulated, they continue to add to their stock.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Graham Bird & Alex Mandilaras, 2007. "Revisiting Mrs. Machlup's Wardrobe: The Accumulation of International Reserves, 1992-2001," School of Economics Discussion Papers 1207, School of Economics, University of Surrey.
    • Handle: RePEc:sur:surrec:1207
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    File URL: https://repec.som.surrey.ac.uk/2007/DP12-07.pdf
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    References listed on IDEAS

    as
    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 1-48.
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    3. Mr. Alex Mourmouras & Anna Ivanova & Mr. George C Anayiotos & Mr. Wolfgang Mayer, 2003. "What Determines the Implementation of IMF-Supported Programs?," IMF Working Papers 2003/008, International Monetary Fund.
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    5. Chui, Michael & Gai, Prasanna, 2005. "Private Sector Involvement and International Financial Crises: An Analytical Perspective," OUP Catalogue, Oxford University Press, number 9780199267750, Decembrie.
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    Cited by:

    1. Pontines, Victor & Yongqiang, Li, 2011. "Regime dependence, Mrs. Machlup's wardrobe and the accumulation of international reserves in Asia," Economics Letters, Elsevier, vol. 110(3), pages 231-234, March.
    2. Graham Bird & Alex Mandilaras, 2011. "Once Bitten: The Effect of IMF Programs on Subsequent Reserve Behavior," Review of Development Economics, Wiley Blackwell, vol. 15(2), pages 264-278, May.
    3. 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.
    4. Lawrence L. Kreicher & Robert N. McCauley, 2021. "Managing the Dollar Over Its Cycles," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 49(2), pages 143-158, June.

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    Keywords

    international reserves;

    JEL classification:

    • F3 - International Economics - - International Finance

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