A number of oil market experts argue that OPEC members substantially overreport their reserves. The potential damage for the world economy calls for an analysis of the motives and the preconditions for successful misreporting of natural resource reserves. Based on a signalling game within an international trade model, this article develops a framework for such an analysis. Exporting countries w...

This paper investigates empirically the relationship between the pattern of fiscal policy and the demand for international reserves in developing countries, and how this relationship is associated with political risk and conditional access to global capital markets. It finds evidence that for developing countries with low political risk, countercyclical (procyclical) fiscal policies are associa...

In this paper we use a new classification of exchange rate arrangements developed by Reinhart and Rogoff (2002) to test whether reserve holdings decrease with increasing exchange-rate flexibility. Using pooled data for 137 countries over the period 1980-2000, we find several new results. First, the degree of exchange rate flexibility has an inverted-U relationship with the country’s reserve hol...