ECCU Business Cycles: Impact of the U.S.

 
Author/Editor: Sun, Yan ; Samuel, Wendell A.
 
Publication Date: April 01, 2009
 
Electronic Access: Free Full text (PDF file size is 628KB).
Use the free Adobe Acrobat Reader to view this PDF file

 
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: With a fixed peg to the U.S. dollar for more than three decades, the tourism-dependent Eastern Caribbean Currency Union (ECCU) countries share a close economic relationship with the U.S. This paper analyzes the impact of the United States on ECCU business cycles and identifies possible transmission channels. Using two different approaches (the common trends and common cycles approach of Vahid and Engle (1993) and the standard VAR analysis), it finds that the ECCU economies are very sensitive to both temporary and permanent movements in the U.S. economy and that such linkages have strengthened over time. There is, however, less clear-cut evidence on the transmission channels. United States monetary policy does not appear to be an important channel of influence, while tourism is important for only one ECCU country.
 
Series: Working Paper No. 09/71
Subject(s): Business cycles | Eastern Caribbean Currency Union | United States | Spillovers | External shocks | Fiscal reforms | Fiscal consolidation | Debt reduction | Economic models

Author's Keyword(s): Business cycles | linkages | Caribbean | United States
 
English
Publication Date: April 01, 2009
Format: Paper
Stock No: WPIEA2009071 Pages: 23
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
Please address any questions about this title to publications@imf.org