Download this Paper Open PDF in Browser

Hoarding of International Reserves and Sterilization in Dollarized and Indebted Countries: An Effective Monetary Policy?

GATE Working Paper No. 1208

42 Pages Posted: 9 May 2012  

Layal Mansour

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Date Written: May 9, 2012

Abstract

The primary aim of this paper is to explore the effectiveness of Hoarding International Reserves and Sterilization in dollarized and indebted countries such as Turkey and Lebanon, by measuring the sterilization coefficient, and the offset coefficient. It also focuses on exploring the link between the sources of Reserves and the external debt. Using monthly data collected from the International Monetary Fund and from the Central Banks of Turkey and Lebanon between January 1994 and February 2011, we applied a 2SLS regression models and we identified explanatory variables that enabled us to estimate the aforementioned coefficients. Our results showed that despite their theoretical practice of sterilization policy, economic constrains of these countries contribute to weaken the efficacy expected from monetary policies.

Keywords: monetary policy, International Reserve, sterilization, foreign liabilities, dollarized countries, Turkey, Lebanon

JEL Classification: E52, E58, F30, F34

Suggested Citation

Mansour, Layal, Hoarding of International Reserves and Sterilization in Dollarized and Indebted Countries: An Effective Monetary Policy? (May 9, 2012). GATE Working Paper No. 1208. Available at SSRN: https://ssrn.com/abstract=2055165 or http://dx.doi.org/10.2139/ssrn.2055165

Layal Mansour (Contact Author)

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

Paper statistics

Downloads
52
Rank
325,311
Abstract Views
329