IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

On Reserve Hoarding In Emes: The Case Of Turkey

Listed author(s):
  • Ä°mre ERSOY
Registered author(s):

    The aim of this paper is to investigate the motives behind the accelerated reserve stockpiling in Turkey. To that end, the paper investigates the long-run equilibrium relationship and Granger causality for the periods of 1974-2009 between international reserves of Turkey and a set of variables put forward by the models of reserve demand. The results of the bounds test for cointegration within the ARDL modelling approach of Pesaran et al. (2001) reveal level relationship between international reserves of Turkey and trade openness, exchange rate volatility, real exchange rate appreciation, financial development, domestic financial development, financial openness, current account volatility, export volatility, public debt, opportunity cost, foreign liabilities and short term debt. Granger causality tests display bidirectional causality between exchange rate volatility and reserves and also unidirectional causality that runs from financial openness, short term debt and domestic financial development to reserves. In addition to the Greenspan-Guidotti rule of short term external debt, the ‘Financial-Stability Model’ seems to better explain the accelerated demand for reserves in Turkey.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.jaes.reprograph.ro/articles/fall2011/ErsoyImre.pdf
    Download Restriction: no

    Article provided by Spiru Haret University, Faculty of Financial Management and Accounting Craiova in its journal Journal of Applied Economic Sciences.

    Volume (Year): 6 (2011)
    Issue (Month): 3(17)/ Fall 2011 ()
    Pages: 230-243

    as
    in new window

    Handle: RePEc:ush:jaessh:v:6:y:2011:i:3(17)_fall2011:p:230
    Contact details of provider: Web page: http://www2.spiruharet.ro/facultati/facultate.php?id=14

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    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. Olivier Jeanne & Romain Rancière, 2011. "The Optimal Level of International Reserves For Emerging Market Countries: A New Formula and Some Applications," Economic Journal, Royal Economic Society, vol. 121(555), pages 905-930, 09.
    3. Giulio Cifarelli & Giovanna Paladino, 2009. "The Buffer Stock Model Redux? An Analysis of the Dynamics of Foreign Reserve Accumulation," Open Economies Review, Springer, vol. 20(4), pages 525-543, September.
    4. Joshua Aizenman & Jaewoo Lee, 2008. "Financial versus Monetary Mercantilism: Long-run View of Large International Reserves Hoarding," The World Economy, Wiley Blackwell, vol. 31(5), pages 593-611, 05.
    5. Aizenman, Joshua & Jinjarak, Yothin & Park, Donghyun, 2011. "International reserves and swap lines: Substitutes or complements?," International Review of Economics & Finance, Elsevier, vol. 20(1), pages 5-18, January.
    6. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    7. Oguz Esen, 2000. "Financial Openness in Turkey," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(1), pages 5-23.
    8. Joshua Aizenman & Jaewoo Lee, 2007. "International Reserves: Precautionary Versus Mercantilist Views, Theory and Evidence," Open Economies Review, Springer, vol. 18(2), pages 191-214, April.
    9. Frenkel, Jacob A & Jovanovic, Boyan, 1981. "Optimal International Reserves: A Stochastic Framework," Economic Journal, Royal Economic Society, vol. 91(362), pages 507-514, June.
    10. Kathryn M. E. Dominguez, 2010. "International Reserves and Underdeveloped Capital Markets," NBER Chapters,in: NBER International Seminar on Macroeconomics 2009, pages 193-221 National Bureau of Economic Research, Inc.
    11. Diego Bastourre & Jorge Carrera & Javier Ibarlucia, 2009. "What is Driving Reserve Accumulation? A Dynamic Panel Data Approach," Review of International Economics, Wiley Blackwell, vol. 17(4), pages 861-877, 09.
    12. Kasman, Adnan & Ayhan, Duygu, 2008. "Foreign exchange reserves and exchange rates in Turkey: Structural breaks, unit roots and cointegration," Economic Modelling, Elsevier, vol. 25(1), pages 83-92, January.
    13. Aizenman, Joshua & Marion, Nancy, 2003. "The high demand for international reserves in the Far East: What is going on?," Journal of the Japanese and International Economies, Elsevier, vol. 17(3), pages 370-400, September.
    14. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    15. Moritz Cruz & Bernard Walters, 2008. "Is the accumulation of international reserves good for development?," Cambridge Journal of Economics, Oxford University Press, vol. 32(5), pages 665-681, September.
    16. M S Mohanty & Philip Turner, 2006. "Foreign exchange reserve accumulation in emerging markets: what are the domestic implications?," BIS Quarterly Review, Bank for International Settlements, September.
    17. Akash Gupta & Rahul Agarwal, 2004. "How should emerging economies manage their foreign exchange reserves?," International Finance 0401005, EconWPA.
    18. 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.
    19. World Bank, 2010. "World Development Indicators 2010," World Bank Publications, The World Bank, number 4373, September.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ush:jaessh:v:6:y:2011:i:3(17)_fall2011:p:230. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Stefanescu)

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.