1. OPTIMAL INTERNATIONAL RESERVES - A NOTE.
- Author
-
Pagan, A. R.
- Subjects
ECONOMIC statistics ,RESERVES (Accounting) ,BALANCE of payments ,ECONOMICS ,EQUATIONS ,ACCOUNTING - Abstract
This article examines the accuracy of the equation which expressed the optimal international level of reserves in terms of the size of imbalance, the social productivity of capital and the propensity to import. The article presented an equation to represent the probability of obtaining a deficit in any given period if the balance payments is considered as transcribing in a simple random walk path. The author of this article presented an equation for the total cost function and criticizes the previous optimal international reserves equation.
- Published
- 1968
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