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Hoarding of International Reserves: A Comparison of the Asian and Latin American Experiences


  • Yin-wong Cheung

    (University of California, Santa Cruz, USA, Hong Kong Institute for Monetary Research)

  • Hiro Ito

    (Portland State University, Portland, USA)


We examine the empirical determinants of the demand for international reserves and compare the experiences of some Asian and Latin American economies. Our empirical results indicate that different vintages of the model of international reserves give different inferences about the appropriate level of international reserves. The developed and developing economies have equations of the demand for international reserves that are quite different from each other. Further, the Asian economies and the Latin American economies have different empirical determinants of the demand for international reserves. Our results highlight the complexity of evaluating whether an economy is holding an excessive or deficient level of international reserves of the inference can be heavily dependent on the choice of a benchmark model. A direct comparison affirms the perception that the Asian economies tend to hold more international reserves than the Latin American economies.

Suggested Citation

  • Yin-wong Cheung & Hiro Ito, 2008. "Hoarding of International Reserves: A Comparison of the Asian and Latin American Experiences," Working Papers 072008, Hong Kong Institute for Monetary Research.
  • Handle: RePEc:hkm:wpaper:072008

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    References listed on IDEAS

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    Cited by:

    1. David Hudson, 2010. "Financing for development and the post Keynesian case for a new global reserve currency," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(6), pages 772-787.

    More about this item


    Foreign Exchange Reserves; Macro Determinants; Financial Factors; Institutional Variables; Excessive Hoarding of International Reserves;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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