CEU Electronic Theses and Dissertations, 2011
| Author | Godovnikov, Maksym |
|---|---|
| Title | The role of foreign exchange reserves for emerging markets: the cost-benefit analysis |
| Summary | Most countries, especially the emerging economies, have increased their levels of foreign exchange reserves rapidly over the past 25 years. The global reserves, being number one cushion against global crises, grew significantly from one trillion dollars in 1990 to more than five trillion dollars in 2009. Considering international reserves as a main instrument for mitigating crises’ probability and overall cost of crises, the research is focused on cost-benefit of international reserves. After evaluating benefits of reserves from the point of their influence on crises, the results show that higher level of reserves really decreases the cost and probability of a crisis. Analyzing the required and sufficient level of reserves on the basis of Ben-Bassat and Gottlieb’s model, we conclude that current level of reserves accumulated by most emerging countries (with the exception of Brazil) is the optimal level from the cost-benefit viewpoint – cost of these reserves and the cost of a crisis. |
| Supervisor | Rabitsch, Katrin |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2011/godovnikov_maksym.pdf |
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