Aizenman, Joshua; Glick, Reuven - Economics Department, University of California-Santa … - 2008
compare the optimal degree of diversification abroad by a central bank versus that of a sovereign wealth fund. We show that if … the central bank manages its foreign assets with the objective of reducing the probability of sudden stops, it will place … bank may be desirable. However, for a large enough foreign asset base, the opportunity cost associated with the limited …