Eastern Caribbean Currency Union: Selected Issues
March 7, 2008
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This paper assesses the evolution of Eastern Caribbean Currency Union (ECCU) real exchange rates over time, and examines whether the region has lost competitiveness. The main finding is that there is little evidence of overvaluation of the Eastern Caribbean (EC) dollar. The relationship summarized above permits the calculation of equilibrium current account balances or norms. The financing of ECCU current account imbalances appears stable. This paper also provides evidence on the distinctive impact that tourism plays in the determination of the real exchange rate in tourism-driven economies.
Subject: Asset and liability management, Banking crises, Corporate income tax, Economic sectors, Financial crises, Foreign exchange, Liquidity, Real exchange rates, Taxes, Tourism
Keywords: Banking crises, banking crisis, Caribbean, CIT rate, Corporate income tax, CR, ECCU, ECCU emigration rate, exchange rate, Global, ISCR, Liquidity, liquidity assistance, Real exchange rates, tax, Tourism, tourism flow
Pages:
102
Volume:
2008
DOI:
Issue:
096
Series:
Country Report No. 2008/096
Stock No:
1ECCEA2008002
ISBN:
9781451811728
ISSN:
1934-7685
