Applying the seasonal error correction model to the demand for international reserves in Taiwan

Article Abstract:

International reserves serve as buffer stock for unexpected payment difficulties. There is always a steady demand for international reserves as long as the domestic money market is in disequilibrium. Taiwan holds the third largest stock of international reserves, and research data on it are usually not seasonally adjusted. Its official growth rate is determined by seasonal difference. Research on this data reveals that the dependent variable is seasonally differenced and that the disequilibrium of the local money market is in fourth difference form.

International Reserves, Taiwan, Economic aspects, Foreign exchange reserves, Buffer stocks

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Why do central banks intervene?

Article Abstract:

Research showed that intervention by central banks to help impact the levels of exchange rates or cut their instability is not always effective. Foreign exchange intervention by central banks is justified by claims that they can allay disorderly markets. The success of intervention contrast between currencies, and between the purchasing of US dollars as compared with the selling of US dollars.

Central banks

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Calculating the equity cost of capital using the APT: the impact of the ERM

Article Abstract:

It was implied that membership of the ERM and the resultant increased convergence between Britain and the other member states was favorable to the UK with a reduction in both the exchange rate risk premium. In post-December 1991, the US and Japan both decreased interest rates to incite recovery while Germany increased them in answer to domestic inflationary pressures.

Germany, Prices and rates, Foreign exchange rates, England

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