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International reserves and the mercantilist approach: some further evidence

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  • Moritz Cruz

    (Universidad Nacional Autónoma de México)

Abstract

Using data from 59 economies for the period 1996-2011, we assess whether international reserves depreciate the exchange rate, as the mercantilist motive for accumulating international reserves holds. Our results suggest that international reserves tend to be associated with appreciations of the real exchange rate; this evidence is opposite to the mercantilist view, implying that they do not contribute to growth and development.

Suggested Citation

  • Moritz Cruz, 2014. "International reserves and the mercantilist approach: some further evidence," Economics Bulletin, AccessEcon, vol. 34(1), pages 446-451.
    • Handle: RePEc:ebl:ecbull:eb-13-00822
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    References listed on IDEAS

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    More about this item

    Keywords

    international reserves; real exchange rate; growth and development; mercantilism;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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