Publication: International reserves holding and the political risk: Evidence from selected emerging economies
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Date
2014
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Publisher
Inderscience Enterprises Ltd.
Abstract
The objective of this paper is to investigate the relationship between financial and economic uncertainty (risk) and the demand for international reserves. In addition, the association between this relationship and the political risk condition is further analysed for selected emerging economies. By using panels of 20 emerging countries, the empirical results show that the decision by the emerging economies to hold international reserves is largely dependent on the fluctuations in the financial risk indicators. In addition, the interdependency between the demand reserves function and the type of financial risk indicator also varies across countries' political conditions. � 2014 Inderscience Enterprises Ltd.
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Keywords
Country risk, Emerging economies, International reserves, Political risk, Self-insurance motive