High levels of excess reserves have been a persistent feature of Jamaica’s commercial banking system within the past two decades. These reserves provide a positive impact in terms of the institutions’ ability to respond to liquidity shocks. Notwithstanding this, questions have been raised as...

Although the federal funds rate started rising from mid-2004 US long term rates continued to fall. A likely contributory factor to this ‘conundrum’ was the contemporaneous increase in US bond demand. Using ARDL based models, which accommodate structural breaks, this paper estimates the...