IDEAS home Printed from https://ideas.repec.org/a/hin/jnlmpe/9261279.html
   My bibliography  Save this article

A New Cost-Profit Model for Measuring the Optimal Scale of China’s Foreign Exchange Reserve

Author

Listed:
  • Xing Li
  • Tianhai Tian

Abstract

The fast increase of foreign exchange reserve in developing countries has raised a number of important financial questions in recent years. The analysis of the optimal scale of the foreign exchange reserve can provide important indicator to measure the strength and stability of country’s financial standing. In this work we propose a cost-profit model and use the financial data during 2000 to 2008 to analyze the optimal scale of China’s foreign exchange reserve. We identify a number of financial factors to measure the cost and profit of holding the reserves. Our prediction suggested that China’s foreign exchange reserves were still within the moderate range in 1999–2001. However, during 2002–2008 the foreign exchange reserve began to exceed the appropriate scale, and this upward trend was accelerated each year.

Suggested Citation

  • Xing Li & Tianhai Tian, 2016. "A New Cost-Profit Model for Measuring the Optimal Scale of China’s Foreign Exchange Reserve," Mathematical Problems in Engineering, Hindawi, vol. 2016, pages 1-10, August.
    • Handle: RePEc:hin:jnlmpe:9261279
    DOI: 10.1155/2016/9261279
    as

    Download full text from publisher

    File URL: http://downloads.hindawi.com/journals/MPE/2016/9261279.pdf
    Download Restriction: no
    File URL: http://downloads.hindawi.com/journals/MPE/2016/9261279.xml
    Download Restriction: no
    File URL: https://libkey.io/10.1155/2016/9261279?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hin:jnlmpe:9261279. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mohamed Abdelhakeem (email available below). General contact details of provider: https://www.hindawi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.