01750cas a2200253 a 4500 AALejournalIMF005241 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451870503 1018-5941 BD-DhAAL BD-DhAAL Ruiz-Arranz, Marta. Are Emerging Asia's Reserves Really Too High? / Marta Ruiz-Arranz, Milan Zavadjil. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Empirical analysis does not suggest that reserves are "too high" in the majority of Asian countries, though China may be a special case. Much of the reserve increase in Asia can be explained by an optimal insurance model under which reserves provide a steady source of liquidity to cushion the impact of a sudden stop in capital inflows on output and consumption. Moreover, the benefits of reserves in terms of reduced spreads on privately held external debt further explains the observed growth in reserves since 1997-98. Using threshold estimation techniques, the paper shows that most of Asia can still benefit from higher reserves in terms of reduced borrowing costs. Mode of access: Internet Zavadjil, Milan. IMF Working Papers; Working Paper ; No. 2008/192 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/192/001.2008.issue-192-en.xml IMF e-Library