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Concentrated distribution of international reserves is puzzling. I show that the growth rates of international reserves bear only a very weak relationship to their initial stocks (scaled by GDP or in absolute terms), and that, by implication, the cross-sectional distribution of reserves conforms to Zipf's law. The law states that the size of reserves is inversely related to their ranking. Evidence in favor of the law is strong and time robust. I compare the crosssection distribution of international reserves embedded in the WEO projections to that implied by Zipf's law and find that international reserves are much less concentrated in the WEO projections than implied by Zipf's law.

Foreign exchange --- International liquidity --- Reserves (Accounting) --- Accounting --- Amortization --- Sinking-funds --- Balance of payments --- International finance --- Liquidity (Economics) --- Econometric models. --- Banks and Banking --- Investments: Stocks --- Demography --- Monetary Policy --- Demographic Economics: General --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Banking --- Population & demography --- Investment & securities --- International reserves --- Reserves accumulation --- Population and demographics --- Stocks --- Reserve assets --- Foreign exchange reserves --- Population --- United States

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Recent turbulence in global and Caribbean regional financial markets underscore the importance of reassessing the adequacy of international reserves held by the Eastern Caribbean Central Bank (ECCB). Using the Jeanne (2007) optimization framework, this paper finds that international reserves held by the ECCB are generally adequate for a variety of external current account and capital account shocks. However, the ECCB would be challenged in the event of moderate to severe deposit outflows.

Commerce --- Business & Economics --- Accounting --- Reserves (Accounting) --- Monetary unions --- Common currencies --- Currency areas --- Currency unions --- Optimum currency areas --- Currency question --- Money --- Amortization --- Sinking-funds --- Banks and Banking --- Exports and Imports --- Money and Monetary Policy --- Monetary Policy --- Current Account Adjustment --- Short-term Capital Movements --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- International Lending and Debt Problems --- Banking --- International economics --- Monetary economics --- International reserves --- Monetary base --- Current account --- External debt --- Capital account --- Foreign exchange reserves --- Balance of payments --- Money supply --- Debts, External --- United States

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Countries’ absolute and relative international reserves adequacy has recently attracted considerable attention. The analysis has however concentrated on the largest and most advanced economies. We apply various methodologies for assessing reserve adequacy in Central America, taking into account the region’s high degree of deposit dollarization. We find that reserve cover is low both in an absolute and relative sense, suggesting further reserve accumulation is an important policy option for reducing vulnerabilities.

Reserves (Accounting) --- Accounting --- Amortization --- Sinking-funds --- Econometric models. --- Banks and Banking --- Exports and Imports --- Finance: General --- Foreign Exchange --- Current Account Adjustment --- Short-term Capital Movements --- International Finance Forecasting and Simulation --- Open Economy Macroeconomics --- Monetary Policy --- International Lending and Debt Problems --- General Financial Markets: General (includes Measurement and Data) --- Banking --- International economics --- Finance --- Currency --- Foreign exchange --- International reserves --- External debt --- Emerging and frontier financial markets --- Reserves accumulation --- Exchange rate flexibility --- Central banks --- Reserve positions --- Financial markets --- Foreign exchange reserves --- Debts, External --- Financial services industry --- Costa Rica

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This Selected Issues paper analyzes various aspects of fiscal framework in the Republic of Mauritania. Mauritania needs to avoid pro-cyclical fiscal policies and adopt rules that guide medium-term fiscal sustainability. Fiscal policy has been responsible and focused on fiscal consolidation, but important challenges lie ahead linked to price volatility, exhaustibility of resources, and effective use of resources. Mauritania has important natural resource wealth, and its fiscal policy is shaped by considerations resulting from its reliance on resource revenues. Prospects for price shocks in the short term and significant mining expansion in the long term could pose significant challenges to fiscal policy management. The analysis of fiscal framework options reveals that a fiscal rule which targets a nonresource primary balance for long-term sustainability, designed to allow some frontloading of public spending on productive investment, would be appropriate for Mauritania under the assumption of a finite resource horizon. A fiscal rule targeting a structural resource balance would be appropriate in the scenario of long-lasting resources, possible under the assumption of favorable developments in the global commodity markets.

Economic development --- Monetary policy --- Reserves (Accounting) --- Accounting --- Amortization --- Sinking-funds --- Monetary management --- Economic policy --- Currency boards --- Money supply --- Development, Economic --- Economic growth --- Growth, Economic --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- Mauritania --- Mauretania --- Mauritanie --- Mavritanii︠a︡ --- Islamskai︠a︡ Respublika Mavritanii︠a︡ --- Territoire de la Mauritanie --- Islamic Republic of Mauritania --- République islamique de Mauritanie --- Jumhūrīyah al-Islāmīyah al-Mūrītānīyah --- R.I. Mauritanie --- RI Mauritanie --- Mūrītāniyā --- République islamique arabe et africaine de Mauritanie --- Mūrītāniyyah --- Al-Ğumhūriyyah al-Islāmiyyah al-Mūrītāniyyah --- Ğumhūriyyah al-Islāmiyyah al-Mūrītāniyyah --- Muritaniyah --- موريتانيا --- Mūrītānyā --- Gànnaar --- Murutaane --- Moritani --- الجمهورية الإسلامية الموريتانية --- al-Jumhūrīyah al-Islāmīyah al-Mūrītānīyah --- جمهورية الإسلامية الموريتانية --- モーリタニア --- Mōritania --- Mauretanien --- Foreign economic relations --- Exports and Imports --- Macroeconomics --- Public Finance --- Production and Operations Management --- Fiscal Policy --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Education: General --- Macroeconomics: Production --- National Government Expenditures and Related Policies: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Public finance & taxation --- Education --- Labour --- income economics --- International economics --- Public investment spending --- Fiscal policy --- Productivity --- Fiscal governance --- Expenditure --- Production --- Public investments --- Industrial productivity --- Consumption --- Mauritania, Islamic Republic of