In this paper we build a theoretical model on the wage effect of skilled emigration to the fluctuations in real exchange rate through the relative prices of nontradables. Our theoretical model predicts that skilled emigration is associated with an increase in the prices of nontradable, which in...

India's foreign exchange reserves have risen rapidly since the balance-of-payment crisis in 1991 to over US$155 billion by mid-2006. India is now the fifth largest Asian reserve holder. Despite this, scant attention has been paid to the rationale for and impact of reserves accumulation in India....

First generation crisis models suggest that the size of international reserves affects only the timing of a crisis while second generation models imply that higher reserves can reduce the probability of a crisis. First in the literature, this article suggests the 'rolling probit model' to...

Asian economies have embraced the globalization of production, trade and capital flows. One dimension of contemporary globalization has been the heavy exchange rate management by, and rapid and massive stockpiling of, foreign exchange reserves in Asia. This article undertakes an empirical...

China is the largest reserve holder among developing countries, having amassed over US$ 600 billion of reserves by end 2004. Given the potential liquidity overhang concerns in China due to the rapid reserve buildup, the PeopleÂ’s Bank of China (PBOC) has actively attempted to sterilize these...