Utilizing the method of generalized least squares (GLS), the paper investigates the factors which determine bid-ask spread in the foreign exchange (FX) market of Guyana. The econometric exercise is based on a rich dataset of trading volumes as well as the buying and selling exchange rates for...

Purpose – The purpose of this paper is twofold. First, it estimates the sterilization coefficients for several Caribbean countries. Second, it contributes to the literature by providing a conceptual framework for understanding why regional economies with fully pegged exchange rate regimes have...

Purpose – The purpose of this paper is twofold. First, it estimates the sterilization coefficients for several Caribbean countries. Second, it contributes to the literature by providing a conceptual framework for understanding why regional economies with fully pegged exchange rate regimes have...

Starting in 2004 the Guyanese foreign exchange rate has been remarkably stable relative to earlier periods. This paper explores the reasons for the stability of the rate. First, the degree of concentration in the foreign exchange market has increased, thus making the task of moral suasion...

Aggregate bank liquidity preference is postulated to engender an investment demand constraint. This idea is integrated into a stochastic dynamic structural macroeconomic model to study output and inflation fluctuations. The model has two regimes that allows for examining output and inflation...

Despite the financial liberalization agenda of the mid-1980s, a system of bank oligopolies has developed in both large and small, open developing economies. Mainstream monetary theory tends to assume a capital markets structure and is therefore not well suited to an analysis of these economies....

This article examines why commercial banks in Guyana demand nonremunerated excess reserves, a phenomenon that became even more widespread after financial liberalization. Despite the removal of capital controls, banks do not invest all excess reserves in a safe foreign asset because the central...

Evidence about commercial banks' liquidity preference says the following about the loan market in less developed countries (LDCs): (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...