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      The need for official reserves in Latin America: Assessing the precautionary motive, 1995-2011 Translated title: L'accumulation de réserves internationales en Amérique latine : évaluation du motif de précaution, 1995-2011 Translated title: A acumulação de reservas internacionais na América Latina: Avaliando o motivo precautório, 1995-2011 Translated title: La acumulación de reservas internacionales en América Latina: evaluando el motivo precautorio, 1995-2011

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          Abstract

          In this paper we estimate the demand for official reserves in Latin America during the period 1995-2011. We assume that the main concern of the monetary authorities to demand reserves is the fear of suffering external drains, and its associated output costs. In other words, we attempt to show that the so-called precautionary motive drives the demand for international reserves in the region. Our econometric results confirm that Latin American countries demand ever increasing amounts of foreign exchange to protect themselves against the likelihood of external drains.

          Translated abstract

          Dans cet article, nous évaluons la demande de réserves internationales en Amérique latine pour la période 1995 - 2011. Nous assumons que la plus grande préoccupation des autorités monétaires pour demander des réserves est la crainte des sorties de capital et de leurs coûts associés quant au produit. Autrement dit, nous ressayons de démontrer que le motif de précaution explique la demande de réserves dans la région. Nos résultats économétriques confirment que la région demande des quantités croissantes de devises pour se protéger contre la possibilité de sorties de capital.

          Translated abstract

          Neste artigo estimamos a demanda de reservas internacionais na América Latina para o período 1995-2011. Assumimos que a maior preocupação das autoridades monetárias para demandar reservas é o medo às fugas de capital e aos seus custos associados quanto ao produto. Em outras palavras, tentamos demonstrar que o motivo precautório explica a demanda de reservas na região. Nossos resultados econométricos confirmam que a região demanda crescentes quantidades de divisas para proteger-se contra a possibilidade de fugas de capital.

          Translated abstract

          En este artículo estimamos la demanda de reservas internacionales en América Latina para el período 1995-2011. Asumimos que la mayor preocupación de las autoridades monetarias para demandar reservas es el miedo a las salidas de capital y a sus costos asociados en cuanto al producto. En otras palabras, intentamos demostrar que el motivo precautorio explica la demanda de reservas en la región. Nuestros resultados econométricos confirman que la región demanda crecientes cantidades de divisas para protegerse contra la posibilidad de salidas de capital.

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          Most cited references 35

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          Stabilizing an Unstable Economy

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            International Financial Statistics

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              International Reserves: Precautionary Versus Mercantilist Views, Theory and Evidence

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                Author and article information

                Contributors
                Role: ND
                Journal
                s_ceco
                Cuadernos de Economía
                Cuad. Econ.
                Universidad Nacional de Colômbia (Bogotá )
                0121-4772
                July 2015
                : 34
                : 65
                : 327-347
                Affiliations
                [1 ] Universidad Nacional Autónoma de México México
                Article
                S0121-47722015000200006
                10.15446/cuad.econ.v34n65.42611
                Product
                Product Information: website

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