This project explores how countries have held official foreign exchange reserves since the late 19th century and the implications for the current international monetary system. We construct an original dataset that provides for the first time in the long run the distinction between reserves held as foreign deposits and reserves held as purchased foreign securities. We then investigate the political and economic determinants of these two types of foreign reserve holdings, including testing the hypothesis that foreign deposits are less associated with financial openness and a market-based foreign reserve accumulation process. This research has broad implications for understanding how the international monetary system will evolve differently depending on whether foreign reserve holdings are based on market-based financial choices or on factors rooted in bilateral economic and political relations.
UC PI:
Barry Eichengreen
Economics and Political Science, UC Berkeley
France PI:
Eric Monnet
Economie, Ecole des hautes études en sciences sociales