Real exchange rate and international reserves in the era of financial integration

被引:10
作者
Aizenman, Joshua [1 ]
Ho, Sy-Hoa [2 ]
Huynh, Luu Duc Toan [3 ]
Saadaoui, Jamel [4 ]
Uddin, Gazi Salah [5 ]
机构
[1] Univ Southern Calif, Dockson Chair Econ & Int Relat, Los Angeles, CA 90089 USA
[2] Vietnam Natl Univ, VNU Univ Econ & Business, Hanoi, Vietnam
[3] Queen Mary Univ London, London, England
[4] Univ Lorraine, Univ Strasbourg, BETA, CNRS, F-67000 Strasbourg, France
[5] Linkoping Univ, Dept Management & Engn, SE-58183 Linkoping, Sweden
关键词
Real exchange rate; International reserves; Financial institutions; DYNAMIC PANELS; TRADE SHOCKS; TERMS; VOLATILITY; POLICY;
D O I
10.1016/j.jimonfin.2024.103014
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
The global financial crisis has brought increased attention to the consequences of international reserves holdings. In an era of high financial integration, we investigate the relationship between the real exchange rate and international reserves using nonlinear regressions and panel threshold regressions over 110 countries from 2001 to 2020. Our study shows the level of financialinstitution development plays an essential role in explaining the buffer effect of international reserves. Countries with a low development of their financial institutions may manage the international reserves as a shield to deal with the negative consequences of terms-of-trade shocks on the real exchange rate. We also find the buffer effect is stronger in countries with intermediate levels of financial openness.
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页数:19
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