Jorge Carrera

What is Driving Reserve Accumulation? A Dynamic Panel Data Approach

Foreign reserve accumulation is a widespread phenomenon of recent years, particularly among emerging economies. Using a panel of 136 countries for the period 1973–2003, we demonstrate the need of using both a dynamic specification of the reserve demand equation and the system GMM estimator. These improvements change the results found by previous studies. Openness, regional imitation, persistence, an inverted U-shaped relationship between reserves and income level, and financial deregulation are the factors driving reserve hoardings. In contrast, reserves yield, and both trade and financial volatility are not statistically significant. Surprisingly, we find that countries with flexible exchange rate regimes have higher ratios of reserves to GDP. This result is robust to alternative exchange rate regime classifications.

Privatisation Discontent and Utility Reform in Latin America

Abstract Privatisation faces strong and increasingly popular opposition in Latin America. This paper uses individual data on social attitudes, socioeconomic status and demographic information from three waves of Latinobarometro surveys (1998, 2000 and 2002) in 17 countries to study the role of privatisation of utilities and its distributional impact. We find that disagreement with privatisation is most likely when the respondent is on a low-to-middle income and when it involves a high proportion of public services such as water and electricity. This complements recent empirical research that points to distributional concerns in the implementation of privatisation in Latin America, particularly because of inadequate regulation of utilities.