| Haque, Nadeem, Mammohan Kumar, Nelson Mark and Donald J. Mathieson (1996), "The Economic Content of Indicators of Developing Country Creditworthiness," Staff Papers 43, pp.688-724. |
....means not spending them. In any case reserve depletion is not a credible long run way of dealing with capital reversals. Indeed, since international reserve holdings have been found to be a theoretically and statistically significant determinant of creditworthiness (Bussiere and Mulder, 1999, Haque, 1996 and Disyatat, 2001) depleting them as a way of cushioning the effect of capital outflows on the exchange rate may make matters worse by inducing further capital outflows. If capital outflows reflect a perception within private capital markets that a country is illiquid, reducing international ....
Haque, N., M. Kumar, M. Nelson and D. Mathieson (1996). The Economic Content of Indicators of Developing Country Creditworthiness, IMF Staff Papers, December 1996.
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Haque, Nadeem, Mammohan Kumar, Nelson Mark and Donald J. Mathieson (1996), "The Economic Content of Indicators of Developing Country Creditworthiness," Staff Papers 43, pp.688-724.
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