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...

'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...