Evidence about developing countries’ commercial banks’ liquidity preference suggests the following about their loan markets: (i) the loan interest rate is a minimum mark-up rate; (ii) the loan market is characterized by oligopoly power; and (iii) indirect monetary policy, a cornerstone of...

The Guyana government, from 2015 to 2021, accumulated a large overdraft on its central bank account. It owed this overdraft to a binding debt ceiling limit and fractious political environment that prevented an increase in the ceiling, allowing for the auctioning of Treasury bills to create the...

This paper examines the effect of Federal Reserve's large scale purchases of securities on private investment. We find tentative evidence that quantitative easing (QE) stimulated the level of aggregate investment through the interest rate channel by narrowing corporate bond spread. In...

The central bank in an open developing economy often balances the national foreign exchange market by selling liquid assets (typically domestic sovereign securities) to commercial banks and other institutional investors that would otherwise be motivated to invest in foreign financial assets....

Dutch settlements on the coastal plain locked Guyana into polder agriculture and inadvertently a small widely dispersed population. The former requires high cost for drainage, irrigation and agricultural production. The latter implies the high costs – including the cost of infrastructure –...

Conventional monetary theory holds that a country can only possess one nominal anchor in the long run. With an open capital account, the country must decide between an exchange rate target or independent monetary policy. The latter implies inflation targeting with a benchmark interest rate...

This paper explores the composition of international reserves under a central bank’s exchange rate policy target. The model allows for numerical estimation of the shadow price – interpreted as the central bank’s sacrifice of policy precision given additional unit of portfolio variance or...