NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

For a Few Dollars More: Reserves and Growth in Times of Crises

Matthieu Bussière, Gong Cheng, Menzie D. Chinn, Noëmie Lisack

NBER Working Paper No. 19791
Issued in January 2014
NBER Program(s):   IFM

Based on a dataset of 112 emerging economies and developing countries, this paper addresses two key questions regarding the accumulation of international reserves: first, has the accumulation of reserves effectively protected countries during the 2008-09 financial crisis? And second, what explains the pattern of reserve accumulation observed during and after the crisis? More specifically, the paper investigates the relation between international reserves and the existence of capital controls. We find that the level of reserves matters: countries with high reserves relative to short-term debt suffered less from the crisis, particularly if associated with a less open capital account. In the immediate aftermath of the crisis, countries that depleted foreign reserves during the crisis quickly rebuilt their stocks. This rapid rebuilding has, however, been followed by a deceleration in the pace of accumulation. The timing of this deceleration roughly coincides with the point when reserves reached their pre-crisis level and may be related to the fact that short-term debt accumulation has also decelerated in most countries over this period.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19791

Users who downloaded this paper also downloaded these:
Reinhart and Rogoff w19823 Recovery from Financial Crises: Evidence from 100 Episodes
Bekaert, Harvey, Lundblad, and Siegel w19786 Political Risk Spreads
Chari and Henry w19840 Two Tales of Adjustment: East Asian Lessons for European Growth
Fox, Garfinkel, Kaushal, Waldfogel, and Wimer w19789 Waging War on Poverty: Historical Trends in Poverty Using the Supplemental Poverty Measure
Gabaix and Maggiori w19854 International Liquidity and Exchange Rate Dynamics
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us