This paper analyzes the international reserve-holding behavior of developing countries. It shows that efficiency and political-economy considerations pull in opposite directions in determining a country's optimal reserve holdings. A country characterized by volatile output, inelastic demand for...

This paper shows that uncertainty about an emerging market's international reserves can affect the willingness of foreign investors to supply international credits. We illustrate the relevance of this concern for South Korea. Uncertainty has asymmetric effects. When the expected reserve position...

This paper shows that uncertainty about an emerging market's international reserves can affect the willingness of foreign investors to supply international credits. We illustrate the relevance of this concern for South Korea. Uncertainty has asymmetric effects. When the expected reserve position...