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In this paper the authors study the degree to which Emerging Markets (EMs) adjusted to the global liquidity crisis by drawing down their International Reserves (IR). Overall, they find a mixed and complex picture. Intriguingly, only about half of the EMs depleted their IR as part of the adjustment mechanism. To gain further insight, they compare the pre-crisis demand for IR of countries that experienced sizable IR depletion, to that of countries that did not, and find different patterns between the two groups.
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