|
|
|
|
Title: |
Effects of Rising Price of Gold on the LDCs'
Demand for
International Reserves |
| Author: |
Bahmani-Oskooee,
Mohsen |
| Author
Affiliation: |
U WI |
| Source: |
International Economic Journal, Winter 1987, v. 1, no. 4, pp. 35-44 |
|
Publication Date: |
Winter 1987 |
|
Abstract: |
Termination of the Washington arrangements
of 1968, whereby the participating countries agreed not to sell gold in
the private gold market, resulted in two changes in international
monetary environment. First, the market price of gold deviated from its
official price. Second, countries were allowed to auction off gold
component of their reserves. The supposition was that such changes will
lower the demand for international liquidity. Using a simultaneous
equation model of demand for and supply of reserve, it is concluded that
indeed market price of gold exerts negative effects on the LDCs demand
for reserves which is similar to the results obtained for DCs in the
previous studies. |
|
