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Title: |
Dynamic Reserve Adjustment under Varying
Balance of Payments Positions |
| Author: |
Malixi,
Margaret M.; Bahmani-Oskooee, Mohsen |
| Author
Affiliation: |
CA State U; U
WI, Milwaukee |
| Source: |
International Economic Journal, Autumn 1994, v. 8, no. 3, pp. 45-56 |
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Publication Date: |
Autumn 1994 |
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Abstract: |
Most studies on dynamic reserve demand
assume that countries respond symmetrically to positive and negative
deviations of actual from desired reserves. The present study
demonstrates that for a sample of developed countries (DCs), balance of
payments deficits induce a faster response (higher speed of adjustment)
than do surpluses. The opposite is true for the sample of developing
countries (LDCs) tested. However, the size of the gap rather than
whether excess demand is positive or negative seems to be the
determining factor of adjustment speeds in the case of the LDC sample. |
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