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For a Few Dollars More: Reserves and Growth in Times of Crises

Author

Listed:
  • M. Bussière
  • G. Cheng
  • M. Chinn
  • N. Lisack
Abstract
Based on a dataset of 112 emerging economies and developing countries, this paper addresses the question whether the accumulation of international reserves has effectively protected countries during the 2008-09 financial crisis. More specifically, the paper investigates the relation between international reserves and the existence of capital controls. We find that the level of reserves matters: countries with high reserves relative to short-term debt suffered less from the crisis, particularly when associated with a less open capital account. This suggests some degree of complementarity between reserve accumulation and capital controls.

Suggested Citation

  • M. Bussière & G. Cheng & M. Chinn & N. Lisack, 2015. "For a Few Dollars More: Reserves and Growth in Times of Crises," Working papers 550, Banque de France.
    • Handle: RePEc:bfr:banfra:550
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    References listed on IDEAS

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    More about this item

    Keywords

    Foreign reserves; capital controls; financial crises; economic growth.;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G01 - Financial Economics - - General - - - Financial Crises

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