|
Joshua Aizenman, Jaewoo Lee
NBER Working Paper No. 12718*
Issued in December 2006
NBER Program(s): IFM
ITI
---- Abstract -----
The sizable hoarding of international reserves by several East Asian countries has been frequently attributed to a modern version of monetary mercantilism -- hoarding international reserves in order to improve competitiveness. From a long-run perspective, manufacturing exporters in East Asia adopted financial mercantilism -- subsidizing the cost of capital -- during decades of high growth. They switched to hoarding large international reserves when growth faltered, making it harder to disentangle the monetary mercantilism from precautionary response to the heritage of past financial mercantilism. Monetary mercantilism also lowers the cost of hoarding, but may be associated with negative externalities leading to competitive hoarding.
*Published: Joshua Aizenman & Jaewoo Lee, 2008.
"Financial versus Monetary Mercantilism: Long-run View of Large International Reserves Hoarding,"
The World Economy,
Blackwell Publishing, vol. 31(5), pages 593-611, 05.
Would you like an annual subscription to NBER Working Papers? Click
here for more information.
You may purchase this paper on-line in .pdf format
from SSRN.com ($5) for electronic delivery.
Information for subscribers and others expecting no-cost downloads
This paper was revised on February 27, 2007 Machine-readable bibliographic record -
MARC,
RIS,
BibTeX
| 
