부산대학교 도서관

This paper first examines the existence of a long-run demand for foreign reserve holdings in Greece and second, tests for its temporal instability using time series techniques. Cointegration tests reveal the existence of a systematic long-run relationship between real reserves, real income, average propensity to import and the euro-dollar interest rate. An interesting aspect of the cointegration analysis is the evidence that the demand for international liquidity is not characterized by economies of scale. The Hansen-Johansen (1993) recursive analysis results indicated that the cointegrating equation was stable over the nominal exchange rate targeting period 1988 92, implying that the reserve holdings play a significant role in the balance of payments adjustment process. [ABSTRACT FROM AUTHOR]