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Moritz Cruz
''International reserves and the mercantilist approach: some further evidence''
( 2014, Vol. 34 No.1 )
Using data from 59 economies for the period 1996-2011, we assess whether international reserves depreciate the exchange rate, as the mercantilist motive for accumulating international reserves holds. Our results suggest that international reserves tend to be associated with appreciations of the real exchange rate; this evidence is opposite to the mercantilist view, implying that they do not contribute to growth and development.
Keywords: international reserves, real exchange rate, growth and development, mercantilism
E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General
Manuscript Received : Dec 10 2013 Manuscript Accepted : Mar 05 2014

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