Optimal Holdings of International Reserves: Self-insurance against Sudden Stops

This paper addresses the issue of the optimal stock of international reserves in terms of a statistical model in which reserves affect both the probability of a sudden stop –as well as associated output costs– by reducing the balance-sheet effects of liability dollarization. Observed reserves on the eve of the global financial crisis were–on average–not distant from optimal reserves

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Year of publication:	2013
Authors:	Calvo, Guillermo ; Izquierdo, Alejandro ; Loo-Kung, Rudy
Published in:	Monetaria. - Centro de Estudios Monetarios Latinoamericanos (CEMLA), ISSN 0185-1136. - Vol. XXXV.2013, 1, p. 1-35
Publisher:	Centro de Estudios Monetarios Latinoamericanos (CEMLA)

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Extent:	application/pdf
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

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