International reserves accumulation has been the preferred policy recently adopted by developing economies to achieve financial stability. The aim of this policy is to increase liquidity and thus reduce the risk of suffering a speculative attack. The main concern expressed in the literature has...

During the last decade, developing (and some developed) economies have accumulated large amounts of international reserves, mainly for precautionary reasons. This phenomenon has been coupled with moderate economic growth. The resources being amassed largely overwhelm protective needs, there is...

Why did monetary authorities hold large gold reserves under Bretton Woods (1944-1971) when only the US had to? We argue that gold holdings were driven by institutional memory and persistent habits of central bankers. Countries continued to back currency in circulation with gold reserves,...