Demand for international reserves: survey of recent empirical studies.

In the last decade many countries have preferred to move to a system of managed floating that is intermediate between the extremes of fixed rates and a clean float. Since managing the float requires international reserves, it is clear that the study of these reserves is as relevant today as it has been in the past.
There are at least six reviews of the literature relevant to this study: Clower and Lipsey (1968), Niehans (1970), Salant (1970), Grubel (1971), Williamson (1973) and Cohen (1975). The justification for writing this review is that since completion of the last survey, many papers have appeared which contribute to the stock of knowledge in this field. However, unlike the previous reviews which have concentrated on the broader issues pertaining to international liquidity, such as the demand for reserves, the supply of reserves, the composition and distribution of reserves, etc., this study focuses solely on surveying empirical studies bearing on the demand for international reserves.
This review will consist of five parts: the first will include a summary of the literature previous to the present managed floating rate system. The second part will be devoted to the description of the empirical literature during the present system. The third part describes the empirical problems of the relevant studies. Our concluding remarks are provided in part four and finally, in part five, a table will be presented containing the features of major demand for reserve studies. [ABSTRACT FROM AUTHOR]