Empirical Study On China's Demand For The International Reserves

In the paper, the linear models are set up, which include dependent variable of the demand for international reserves and the independent variables. Collecting the economic data of 1952-2003 and applying the SPSS software estimate coefficients of the independent variables in the model. The Long-term Demand for International Reserves Model and the Error Correction Model of 1952-1982 and 1982-2003 are concluded.The following conclusion drawn from the model of estimation, 1: From year of 1952 to 1982, the long-term demand for international reserves is correlated positively with fluctuating rate of difference of the international revenue and expenditure. The monetary disequilibria has significant short-run effects with lag of 2 years on the reserve holding from year of 1952 to 1982. 2 From year of 1982 to 2003, long-term demand for international reserves has the positive correlation with scale variable (import volume) and the fluctuating rate of difference of the international revenue, and has negative correlation with opening rate. In a short time, the monetary disequilibria has significant short-run effects with lag of 1 year on the reserve holding from year of 1982 to2003.