IDEAS home Printed from https://ideas.repec.org/a/fip/fednci/y2004isepnv.10no.10.html
   My bibliography  Save this article

Reserve accumulation: implications for global capital flows and financial markets

Author

Abstract

Many central banks-particularly those in Japan and the emerging Asian nations-have been building up their holdings of foreign currency assets. These holdings, known as foreign exchange reserves, may help countries stabilize their currencies, but they can also lead to investment losses for the central banks. The large share of dollar assets among reserve holdings has made foreign central banks important players in U.S. financial markets.

Suggested Citation

  • Matthew Higgins & Thomas Klitgaard, 2004. "Reserve accumulation: implications for global capital flows and financial markets," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Sep).
    • Handle: RePEc:fip:fednci:y:2004:i:sep:n:v.10no.10
    as

    Download full text from publisher

    File URL: https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci10-10.html
    Download Restriction: no
    File URL: https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci10-10.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael P. Dooley & David Folkerts-Landau & Peter Garber, 2004. "The revived Bretton Woods system," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(4), pages 307-313.
    2. Dorothy M. Sobol, 1998. "Foreign ownership of U.S. Treasury securities: what the data show and do not show," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 4(May).
    3. Glick,Reuven (ed.), 1998. "Managing Capital Flows and Exchange Rates," Cambridge Books, Cambridge University Press, number 9780521623230, October.
    4. Kenneth M. Kletzer & Mark M. Spiegel, 1996. "Speculative capital inflows and exchange rate targeting in the Pacific Basin," Pacific Basin Working Paper Series 96-05, Federal Reserve Bank of San Francisco.
    5. Matthew Higgins & Thomas Klitgaard, 1998. "Viewing the current account deficit as a capital inflow," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 4(Dec).
    6. Michael P. Dooley & David Folkerts-Landau & Peter Garber, 2004. "The Revived Bretton Woods System: The Effects of Periphery Intervention and Reserve Management on Interest Rates & Exchange Rates in Center Countries," NBER Working Papers 10332, National Bureau of Economic Research, Inc.
    7. Mr. Christian B. Mulder & Mr. Matthieu Bussière, 1999. "External Vulnerability in Emerging Market Economies: How High Liquidity Can Offset Weak Fundamentals and the Effects of Contagion," IMF Working Papers 1999/088, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benecká, Soňa & Komarek, Lubos, 2018. "International reserves: Facing model uncertainty," Economic Systems, Elsevier, vol. 42(3), pages 523-531.
    2. Mr. Romain Ranciere & Mr. Olivier D Jeanne, 2006. "The Optimal Level of International Reserves for Emerging Market Countries: Formulas and Applications," IMF Working Papers 2006/229, International Monetary Fund.
    3. Olivier Jeanne, 2007. "International Reserves in Emerging Market Countries: Too Much of a Good Thing?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 38(1), pages 1-80.
    4. Pablo García & Claudio Soto, 2006. "Large Hoardings of International Reserves: Are They Worth It?," Central Banking, Analysis, and Economic Policies Book Series, in: Ricardo Caballero & César Calderón & Luis Felipe Céspedes & Norman Loayza (Series Editor) & Klaus Sc (ed.),External Vulnerability and Preventive Policies, edition 1, volume 10, chapter 6, pages 171-206, Central Bank of Chile.
    5. Kim, Yun Jung, 2017. "Sudden stops, limited enforcement, and optimal reserves," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 273-282.
    6. Ricardo Sabbadini, 2018. "International Reserves Management in a Model of Partial Sovereign Default," Working Papers, Department of Economics 2018_14, University of São Paulo (FEA-USP).
    7. Shigeru Iwata & Evan Tanner, 2007. "Pick Your Poison: The Exchange Rate Regime and Capital Account Volatility in Emerging Markets," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(7-8), pages 363-381, September.
    8. Laura Alfaro & Sebnem Kalemli-Ozcan & Vadym Volosovych, 2014. "Sovereigns, Upstream Capital Flows, And Global Imbalances," Journal of the European Economic Association, European Economic Association, vol. 12(5), pages 1240-1284, October.
    9. Ricardo Sabbadini, 2017. "Overcoming the Original Sin: Gains from Local Currency External Debt," Working Papers, Department of Economics 2017_27, University of São Paulo (FEA-USP).
    10. Ricardo J. Caballero & Arvind Krishnamurthy, 2000. "International Liquidity Management: Sterilization Policy in Illiquid Financial Markets," Econometric Society World Congress 2000 Contributed Papers 1700, Econometric Society.
    11. Y. Kalantzis. & P. Towbin. & S. Zignago., 2014. "International adjustment and rebalancing of global demand:where do we stand?," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 33, pages 5-23, spring.
    12. Carmen M. Reinhart & Franziska L. Ohnsorge & Kenneth S. Rogoff & M. Ayhan Kose, 2022. "The Aftermath of Debt Surges," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 637-663, August.
    13. Pingfan Hong & Rob Vos & Keping Yao, 2008. "How China Could Contribute to a Benign Global Rebalancing?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(5), pages 35-50, September.
    14. Andrew Hughes Hallett & Juan Carlos Martinez Oliva, 2012. "Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls," Global Economic Review, Taylor & Francis Journals, vol. 41(4), pages 319-340, December.
    15. Maurice Obstfeld & Kenneth Rogoff, 2007. "The Unsustainable US Current Account Position Revisited," NBER Chapters, in: G7 Current Account Imbalances: Sustainability and Adjustment, pages 339-376, National Bureau of Economic Research, Inc.
    16. Cheng, Wenli & Zhang, Dingsheng, 2012. "A monetary model of China–US trade relations," Economic Modelling, Elsevier, vol. 29(2), pages 233-238.
    17. Suparna Chakraborty & Robert Dekle, 2009. "Can International Productivity Differences Alone Account for the US Current Account Deficits?," Review of International Economics, Wiley Blackwell, vol. 17(4), pages 689-715, September.
    18. Ronald McKinnon & Gunther Schnabl, 2004. "The Return to Soft Dollar Pegging in East Asia: Mitigating Conflicted Virtue," International Finance, Wiley Blackwell, vol. 7(2), pages 169-201, July.
    19. Campbell, Douglas L., 2013. "Relative Prices, Hysteresis, and the Decline of American Manufacturing," MPRA Paper 51723, University Library of Munich, Germany.
    20. Jeffrey A. Frankel, 2010. "Monetary Policy in Emerging Markets: A Survey," NBER Working Papers 16125, National Bureau of Economic Research, Inc.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednci:y:2004:i:sep:n:v.10no.10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gabriella Bucciarelli (email available below). General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.