Growth in the International Reserves of Russia,China, and India: A Comparison of Underlying Mechanisms

A noted international specialist on the Russian economy compares the different mechanisms by which the emerging powerful economies of Russia, China, and India accumulated substantial foreign reserves during the 2000s in the lead-up to the global financial crisis. He also investigates the costs incurred by these countries of intervention into exchange markets to maintain exchange rate regimes supporting such accumulation, as well as measures undertaken after the crisis to address sudden and massive outflows of foreign private capital and considerable decreases in demand for imports in developed countries. The author argues that each of the three countries can be viewed as a prototype for a particular means of reserve accumulation among emerging market countries that has led to the revival of the Bretton Woods international monetary system.