CESIFO Working Paper series
Foreign exchange reserves, Developed countries -- Economic conditions
Using data from more than 100 economies for the period of 1975 to 2005, we conduct an extensive empirical analysis of the determinants of international reserve holdings. Four groups of determinants, namely, traditional macro variables, financial variables, institutional variables, and dummy variables that control for individual economies’ characteristics are considered. We find that the relationship between international reserves and their determinants is significantly different between developed and developing economies and is not stable over time. The estimation results indicate that, especially during the recent period, a developed economy tends to hold a lower level of international reserves than a developing one.
Cheung, Yin-Wong, and Hiro Ito. "A cross-country empirical analysis of international reserves." International Economic Journal 23.4 (2009): 447-481.