Economic Resilience with An Exchange Rate Peg: The Barbados Experience, 1985-2000
August 1, 2003
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Summary
This paper discusses the institutional arrangements for exchange rate targeting in Barbados and the critical role they played in the policy response to its balance of payments crisis of 1991-92. The framework featured ongoing cooperation between the central bank and the Ministry of Finance, and the use of a forecast model which highlighted the size of fiscal adjustment needed to secure foreign reserves adequate to maintain the exchange rate peg.
Subject: Banking, Central banks, Fiscal consolidation, Fiscal policy, Foreign exchange, Inflation, International reserves, Prices
Keywords: adjustment program, balance of payments, Barbados economy, Barbados exchange rate anchor, Barbados experience, Barbados policy framework, Barbados' balance of payments crisis, Caribbean, cash flow, central bank, central bank of Barbados, derived demand, Exchange rate, Fiscal consolidation, fiscal policy, Inflation, International reserves, monetary policy, Phillips curve, price effect, rate of return, Stabilization policy, WP
Pages:
24
Volume:
2003
DOI:
Issue:
168
Series:
Working Paper No. 2003/168
Stock No:
WPIEA1682003
ISBN:
9781451858280
ISSN:
1018-5941
