Abstract:
In this paper, we examine external, monetary, and structural determinants of crosscountry variation in reserve volatility for 30 emerging market economies from 1973 to 2000. We find that reserve holdings and openness to be the most important determinants of reserve volatility. These results are robust for a range of control variables, including monetary variables, the degree of financial development, and the level of indebtedness. We view these results as establishing interesting stylized facts that may be helpful in evaluating reserve uncertainty as a crisis indicator.