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Determinants of International Reserves: Empirical Evidence from Emerging Asia

Author

Listed:
  • Chandan Sharma

    (Indian Institute of Management, Lucknow)

  • Sunny K Singh

    (Indian Institute of Management, Lucknow)

Abstract

In this study, we attempt to estimate the long term determinants of international reserves in the emerging Asian for the period 1980-2011. In this study, we attempt to estimate the long term determinants of international reserves in the emerging Asia for the period 1980-2011. Utilizing a well-established panel data estimation technique fully modified OLS (FMOLS), we find that trade openness, country size, export volatility and opportunity cost of reserve accumulation are significant factors explaining the determinants of international reserves in the emerging Asia. Under the environment of high dependency on inelastic imports and capital mobility with frequent and costly financial crises, it seems that these countries self-insurance themselves against the possible currency crisis.

Suggested Citation

  • Chandan Sharma & Sunny K Singh, 2014. "Determinants of International Reserves: Empirical Evidence from Emerging Asia," Economics Bulletin, AccessEcon, vol. 34(3), pages 1696-1703.
    • Handle: RePEc:ebl:ecbull:eb-14-00531
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    References listed on IDEAS

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    Cited by:

    1. Rachna Agrawal & Ashima Verma, 2023. "Investigating the efficiency of foreign exchange reserves using stochastic frontier analysis: Evidence across the globe," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1376-1390, April.

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    More about this item

    Keywords

    International reserves; Emerging Asia; Panel Cointegration; FMOLS;
    All these keywords.

    JEL classification:

    • F3 - International Economics - - International Finance
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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