BIROn - Birkbeck Institutional Research Online

    Foreign exchange reserves in a credit constrained economy

    Akdogan, Ersin (2010) Foreign exchange reserves in a credit constrained economy. Working Paper. Birkbeck College, University of London, London, UK.

    [img]
    Preview
    Text
    7528.pdf - Published Version of Record

    Download (378kB) | Preview

    Abstract

    We discuss the role of foreign exchange reserves as precautionary savings under an imperfect market framework due to the presence of endogenously determined borrowing constraints. We show that cost of holding reserves is higher in borrowing constrained economies than unconstrained ones as a result of the leverage effect of the debt. We also argue that high global reserve holdings can even be welfare reducing for the world economy where financially constrained developing countries are heavy borrowers in international lending markets.

    Metadata

    Item Type: Monograph (Working Paper)
    Additional Information: BWPEF 1014
    Keyword(s) / Subject(s): Foreign Exchange Reserves, Credit Constraints
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Depositing User: Administrator
    Date Deposited: 20 Jun 2013 11:10
    Last Modified: 02 Aug 2023 17:05
    URI: https://eprints.bbk.ac.uk/id/eprint/7528

    Statistics

    Activity Overview
    6 month trend
    444Downloads
    6 month trend
    505Hits

    Additional statistics are available via IRStats2.

    Archive Staff Only (login required)

    Edit/View Item
    Edit/View Item