Cost of Holding Excess Reserves: The Indian Experience
Most of the existing literature has used single reserve adequacy measures to evaluate the volume of excess reserves. In this paper, we employ empirical methods to generate a comprehensive reserve adequacy measure, incorporating the various objectives of holding reserves, and compare the actual reserve accumulation experience of various emerging markets with the prediction of our empirical model. Using this comprehensive reserve adequacy measure, we calculate the cost of holding excess reserves for India by looking at three different alternative uses of resources. We find that India is foregoing as much as 2 of its GDP by accumulating reserves instead of employing resources in alternative uses.
|Date of creation:||Mar 2008|
|Date of revision:|
|Contact details of provider:|| Postal: India Habitat Centre, Core 6A, Lodhi Road, New Delhi 110 003|
Web page: http://www.icrier.res.in
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ind:icrier:206. 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: (G.K. Manjunath)
If references are entirely missing, you can add them using this form.