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Impact of economic growth on international reserve holdings in Brazil

Author

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  • Mohammad Kashif

    (Research Scholar, Department of International Business, School of Management, Pondicherry Central University, India.)

  • P. Sridharan

    (Associate Professor & Head, Department of International Business, School of Management, Pondicherry Central University, India.)

  • S. Thiyagarajan

    (Assistant Professor, Department of International Business, School of Management, Pondicherry Central University, India.)

Abstract

This study investigated the impact of economic growth on Brazilian international reserves holdings in the context of Error Correction Mechanism using data over the 1980-2014 period. The results reveal that economic growth is highly significant. From the estimation of our model, we argue that economic growth and international reserves have positive long run relationship. The estimates of error correction model are valid because error correction term is negative and statistically significant. Besides, our model suggested that economic growth has short run relationship too. The speed of adjustment is more than forty percent which indicated that error correction term corrects previous year disequilibrium at the rate of 40.4%. JEL Classification: F41; F43; F62.

Suggested Citation

  • Mohammad Kashif & P. Sridharan & S. Thiyagarajan, 2017. "Impact of economic growth on international reserve holdings in Brazil," Brazilian Journal of Political Economy, Center of Political Economy, vol. 37(3), pages 605-614, February.
    • Handle: RePEc:ekm:repojs:v:37:y:2017:i:3:id:95253
    DOI: 10.1590/0101-31572017v37n03a08
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    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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