Accumulation of reserves and keeping up with the Joneses : The case of LATAM economies
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › Not applicable › peer-review
Author(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 19-31 |
| Journal / Publication | International Review of Economics and Finance |
| Volume | 20 |
| Issue number | 1 |
| State | Published - Jan 2011 |
| Externally published | Yes |
Link(s)
Abstract
In this paper we explore the 'Mrs. Machlup's Wardrobe' hypothesis to understand the growing trend of Latin American economies amassing large stocks of international reserves. Using annual data from 1980 to 2007, we examine the relevance of the argument that economies continue to add to their existing reserves stock in order to keep up with the Joneses. We find strong evidence of presence of the Joneses effect. The effect is robust to the inclusion of traditional determinants of reserve accumulation as well as region specific factors including commodity exports that set the Latin American economies apart from other emerging economies. © 2010 Elsevier Inc.
Research Area(s)
- 'Mrs. Machlup's Wardrobe' hypothesis, Competitive hoarding, Demand for international reserves, Financial crisis, Speculative attack
Citation Format(s)
Accumulation of reserves and keeping up with the Joneses : The case of LATAM economies. / Cheung, Yin-Wong; Sengupta, Rajeswari.
In: International Review of Economics and Finance, Vol. 20, No. 1, 01.2011, p. 19-31.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › Not applicable › peer-review
