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...

'One of the fundamental features of the financial system in most small island developing countries is the existence of oligopolistic banking systems. While economists have, for some time now, been working on developing models to explain the behaviour of firms in such market structures, this book...