01848cas a2200265 a 4500 AALejournalIMF009336 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451867107 1018-5941 BD-DhAAL BD-DhAAL Mendoza, Enrique. Precautionary Demand for Foreign Assets in Sudden Stop Economies : An Assessment of the New Merchantilism / Enrique Mendoza, Ceyhun Bora Durdu, Marco Terrones. Washington, D.C. : International Monetary Fund, 2007. 1 online resource (54 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 Financial globalization was off to a rocky start in emerging economies hit by Sudden Stops in the 1990s. The surge in foreign reserves since then is viewed as a New Merchantilism in which reserves are a war-chest for defense against Sudden Stops. We conduct a quantitative assessment of this argument using a framework in which precautionary savings affect foreign assets via business cycle volatility, financial globalization, and endogenous Sudden Stops. Our results show that financial globalization and Sudden Stop risk are plausible explanations of the surge in reserves but cyclical volatility, which has declined in the globalization period, is not. Mode of access: Internet Durdu, Ceyhun Bora. Terrones, Marco. IMF Working Papers; Working Paper ; No. 2007/146 Full text available on IMF http://elibrary.imf.org/view/journals/001/2007/146/001.2007.issue-146-en.xml IMF e-Library