International Reserve Management under Rollover Crises

Mauricio Barbosa-Alves, Javier Bianchi and Cesar Sosa-Padilla

No 32393, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper develops a framework to study the management of international reserves when a government faces the risk of a rollover crisis. In the model, it is optimal for the government to reduce its vulnerability by initially lowering debt, and then increasing both debt and reserves as it approaches a safe zone. Furthermore, we find that issuing additional debt to accumulate reserves can lead to a reduction in sovereign spreads.

JEL-codes: E4 E5 F32 F34 F41 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-cba, nep-mon and nep-opm
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Working Paper: International Reserve Management under Rollover Crises (2024)
Working Paper: International Reserve Management under Rollover Crises (2024)
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