Robert M. La Follette School of Public Affairs

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

Using a dataset of 112 emerging economies and developing countries, this paper investigates the relation between international reserves and the existence of capital controls. The authors find that the level of reserves matters: Countries with high reserves relative to short-term debt suffered less from the 2008-09 financial crisis. Countries that depleted foreign reserves during the crisis quickly rebuilt their stocks afterward. However, a deceleration in accumulation followed this rapid rebuilding.

Additional Info

  • Volume or issue no.: La Follette School Working Paper No. 2013-014
  • Author(s): Matthieu Bussière, Gong Cheng, Menzie D. Chinn, and Noëmie Lisack