Assesses if the economies of Barbados, Jamaica, Trinidad and Tobago, and Guyana can form part of a Caribbean monetary union. Correlations between the demand and supply indicate that monetary union may lead to greater stabilization problems for these economies.
Burger,John (Author), Rebucci,Alessandro (Author), Warnock,Francis E. (Author), and Warnock,Veronica (Author)
Format:
Pamphlet
Publication Date:
May 2010
Published:
Washington, DC: Inter-American Development Bank
Location:
African American Research Center, Library, University of Illinois at Urbana-Champaign
Notes:
39 p., This paper assesses the extent to which a country's external capital structure can aid in mitigating the macroeconomic impact of oil price shocks. Two Caribbean economies highly vulnerable to oil price shocks are considered: an oil importer (Jamaica) and an oil exporter (Trinidad and Tobago). From a risk-sharing perspective, a desirable external capital structure is one that, through international capital gains and losses, helps offset responses of the current account balance to external shocks. It is found that both countries could alter their international portfolio to provide a better buffer against such shocks.
