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International Reserves—Too Much of a Zipf’s Thing

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  • Mariusz A. Sumlinski

Abstract

Concentrated distribution of international reserves is puzzling. I show that the growth rates of international reserves bear only a very weak relationship to their initial stocks (scaled by GDP or in absolute terms), and that, by implication, the cross-sectional distribution of reserves conforms to Zipf's law. The law states that the size of reserves is inversely related to their ranking. Evidence in favor of the law is strong and time robust. I compare the crosssection distribution of international reserves embedded in the WEO projections to that implied by Zipf's law and find that international reserves are much less concentrated in the WEO projections than implied by Zipf's law.

Suggested Citation

  • Mariusz A. Sumlinski, 2008. "International Reserves—Too Much of a Zipf’s Thing," IMF Working Papers 2008/011, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/011
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    References listed on IDEAS

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    1. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March.
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    Cited by:

    1. Sergio Cerezo Aguirre Cerezo Aguirre, 2010. "Consideraciones sobre el nivel óptimo de reservas internacionales para Bolivia: 2003-2009," Revista Latinoamericana de Desarrollo Economico, Carrera de Economía de la Universidad Católica Boliviana (UCB), issue 14, pages 41-70.

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