Revisiting Mrs. Machlup's Wardrobe: The Accumulation of International Reserves, 1992-2001
AbstractA 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.
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Bibliographic InfoPaper provided by School of Economics, University of Surrey in its series School of Economics Discussion Papers with number 1207.
Length: 13 pages
Date of creation: 2007
Date of revision:
Publication status: Forthcoming in Applied Economics Letters
Other versions of this item:
- Graham Bird & Alex Mandilaras, 2010. "Revisiting Mrs. Machlup's wardrobe: the accumulation of international reserves, 1992-2001," Applied Economics Letters, Taylor & Francis Journals, vol. 17(5), pages 467-471.
- F3 - International Economics - - International Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-27 (All new papers)
- NEP-CBA-2007-10-27 (Central Banking)
- NEP-MON-2007-10-27 (Monetary Economics)
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