Central Bank reserve creation in the era of negative money multipliers

Manmohan Singh, Peter Stella, 7 May 2012

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The phenomenal increase in bank reserves that has resulted from central bank responses to the current financial crisis has led to considerable anxiety regarding a potentially explosive and uncontrollable future increase in inflation.

Topics: Macroeconomic policy
Tags: Central Banks, monetary policy, money multiplier, reserves

Central banks and gold puzzles

Joshua Aizenman, Kenta Inoue, 19 March 2012

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On 7 August 2009, the European Central Bank released the following Joint Statement on Gold:

Topics: International finance
Tags: Central Banks, Gold, reserves

The dollar question: Where are we?

Kati Suominen, 9 July 2010

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The global crisis and US economic travails triggered a firestorm debate on the future of the global currency regime.

Topics: Global governance, International finance
Tags: dollar, global currency regime, reserves

Reserves and other early warning indicators work in crisis after all

Jeffrey Frankel, George Saravelos, 1 July 2010

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With aftershocks of the recent global financial earthquake still being felt in some parts of the world, it would be useful to have a set of “early warning indicators” to tell us what countries are most vulnerable. Many scholarly papers in the past have been devoted to identifying leading indicators of crises (e.g. Rose and Spiegel 2009a).

Topics: Global crisis
Tags: early warning, global crisis, reserves

Hedging against commodity prices and precautionary reserves

Eduardo Borensztein, Olivier Jeanne, Damiano Sandri, 15 December 2009

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The build-up of global imbalances has been driven in part by emerging market economies’ accumulation of large stocks of reserves – a trend that some authors view as self-insurance against volatility in international capital flows (Aizenman 2009, Aizenman and

Topics: International finance
Tags: commodity, global imbalances, hedging, reserves

Alternatives to sizeable hoarding of international reserves: Lessons from the global liquidity crisis

Joshua Aizenman, 30 November 2009

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The spectacular increase in hoarding of international reserves (IR) by emerging markets, in the aftermath of the East Asian crisis, has been one of the defining features of global imbalances (Summers 2006). This accumulation reflects, among other factors, the self insurance provided by international reserves against sudden stops and deleveraging crises (Aizenman and Lee 2007).

Topics: International finance
Tags: East Asia, reserves, sudden-stops

International reserve losses in the 2008-9 crisis: From “fear of floating” to the “fear of losing international reserves”?

Joshua Aizenman, Yi Sun, 15 October 2009

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Investigating the patterns of exchange rates, interest rates, and international reserves during 1970-1999, Calvo and Reinhart (2002) inferred the prevalence of the “fear of floating”.

Topics: International finance
Tags: fear of floating, global crisis, international reserves, reserves

Rapid and large liquidity funding for emerging markets

Guillermo Calvo, Rudy Loo-Kung, 10 December 2008

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One can blame the G7 for incompetent financial supervision, but few would criticise them for the rapid and decisive action taken by their central banks and fiscal authorities after the crisis materialised.

Topics: International finance
Tags: emerging markets, financial crisis, reserves

Asian exchange rate asymmetry

Victor Pontines, Ramkishen S. Rajan, 19 November 2008

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Following Calvo and Reinhart (2002), it has become commonplace to argue that there is a “fear of floating” among emerging economies in Asia and elsewhere.

Topics: Exchange rates, Macroeconomic policy
Tags: Asia, fear of floating, reserves, sovereign wealth funds

The IMF as a reserve manager

Michael Bordo, Harold James, 18 June 2008

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In the original conception of the 1944 Bretton Woods Conference, the International Monetary Fund (IMF) was created to deal with problems that had afflicted the interwar world, particularly the lopsided distribution of reserves and the deflationary consequences for the international economy – as well as with crisis management.

Topics: International finance
Tags: crisis management, IMF, reserves

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