Traditional approach to optimal reserve determination centres on reserves as adjustments to shocks to the balance of payments. The demand for reserves varies according to the international interest rates, volatility of the terms of trade and the exchange rate regimes (Garcia, 1999). While...

We investigate how output fluctuates before and after these financial crises hit the E-7 countries by excluding the crisis period defined earlier from the sample. The E-7 is referred to a group of seven emerging market countries-Thailand, Malaysia, Indonesia, the Philippines, South Korea, Mexico...