ECCU Business Cycles
ECCU Business Cycles

Author: Mr.Wendell A. Samuel

Publisher: International Monetary Fund

Published: 2009-04-01

Total Pages: 25

ISBN-13: 1451872186

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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.

Financial Conditions and Growth at Risk in the ECCU
Financial Conditions and Growth at Risk in the ECCU

Author: Mr.Takuji Komatsuzaki

Publisher: International Monetary Fund

Published: 2019-11-15

Total Pages: 42

ISBN-13: 1513521802

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We study the growth determinants in the Eastern Caribbean Currency Union (ECCU), using the Growth at Risk (GaR) framework with a focus on financial variables. We find that excessive bank credit growth is associated with lower future real GDP growth in the medium term especially on the low quantiles of growth distribution. Moreover, worsening of both global financial conditions and external conditions are associated with lower future growth in the short term, especially at the high quantiles of growth distribution. Country-specific results are broadly in line with ECCU-wide results, with some variation potentially due to the strong Citizenship-By-Investment program inflows and lack of credit union data. The establishment of a macroprudential framework in the ECCU would need to pay close attention to credit growth not only of banks but also credit unions and continue to monitor global and external conditions.

Debt, Growth and Natural Disasters A Caribbean Trilogy
Debt, Growth and Natural Disasters A Caribbean Trilogy

Author: Sebastian Acevedo Mejia

Publisher: International Monetary Fund

Published: 2014-07-16

Total Pages: 47

ISBN-13: 1498333745

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This paper seeks to determine the effects that natural disasters have on per capita GDP and on the debt to GDP ratio in the Caribbean. Two types of natural disasters are studied –storms and floods– given their prevalence in the region, while considering the effects of both moderate and severe disasters. I use a vector autoregressive model with exogenous natural disasters shocks, in a panel of 12 Caribbean countries over a period of 40 years. The results show that both storms and floods have a negative effect on growth, and that debt increases with floods but not with storms. However, in a subsample I find that storms significantly increase debt in the short and long run. I also find weak evidence that debt relief contributes to ease the negative effects of storms on debt.

The Eastern Caribbean Economic and Currency Union
The Eastern Caribbean Economic and Currency Union

Author: Mr.Alfred Schipke

Publisher: International Monetary Fund

Published: 2013-04-10

Total Pages: 546

ISBN-13: 1616352655

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The Eastern Caribbean Economic and Currency Union (OECS/ECCU) is one of four currency unions in the world. As in other parts of the world in the aftermath of the global economic and financial crisis, the region is at a crossroads, facing the major challenges of creating jobs, making growth more inclusive, reforming the banking system, and managing volatility, while grappling with high public debt and persistent low economic growth. Policymakers have the critical task of implementing strong reforms to strengthen the monetary union while also laying the foundation for accelerating growth. This Handbook provides a comprehensive analysis of the key issues in the OECS/ECCU, including its organization and economic and financial sector linkages, and provides policy recommendations to foster economic growth.

Handbook of Regional Cooperation and Integration
Handbook of Regional Cooperation and Integration

Author: Philippe De Lombaerde

Publisher: Edward Elgar Publishing

Published: 2024-02-12

Total Pages: 531

ISBN-13: 1800373740

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This is an open access title available under the terms of a CC BY-NC-ND 4.0 License. It is free to read, download and share on Elgaronline.com. This timely Handbook offers a detailed cross-policy assessment on the need, locale and impact of regional cooperation and integration, addressing how the principles of regional integration have affected multi-level governance and subsequent public policy. Individual chapters provide explanations of what regional cooperation means in a specific policy area, identify relevant theories, and present empirical evidence to support the arguments outlined.

Eastern Caribbean Currency Union
Eastern Caribbean Currency Union

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2009-06-02

Total Pages: 97

ISBN-13: 145181173X

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The Eastern Caribbean Currency Union (ECCU) countries financial system has increasingly come under stress particularly through weakly supervised nonbank and offshore financial sectors with knock-on effects to domestic banks. The staff report focuses on ECCU’s 2009 discussion on common policies of member countries on economic development and policies. In response, ECCU authorities have accelerated the establishment of national Single Regulatory Units and the passage of harmonized legislation to strengthen then regulation and supervision of nonbanks and offshore institutions.

Dominica
Dominica

Author: International Monetary Fund. Western Hemisphere Dept.

Publisher: International Monetary Fund

Published: 2013-01-28

Total Pages: 62

ISBN-13: 1616356383

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Dominica has faced two major challenges during the past two decades: weak competitiveness and low potential growth. In addition to these economic challenges, the country has been facing frequent natural disasters. Growth is expected to pick up gradually. The financial system is highly liquid but monetary conditions have not eased. The external position is improving on strong service receipts. Fiscal policy is reaching its limit in terms of its ability to support economic activity. The balance of risks to the fiscal outlook is broadly balanced.

Estimating the Impact of External Shocks on the ECCU: Application to the COVID Shock
Estimating the Impact of External Shocks on the ECCU: Application to the COVID Shock

Author: Vivian Parlak

Publisher: International Monetary Fund

Published: 2021-08-20

Total Pages: 37

ISBN-13: 151358541X

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We measure the impact of frequent exogeneous shocks on small ECCU economies, including changes to global economic activity, tourism flows, oil prices, passport sales, FDI, and natural disasters. Using Canonical-Correlation Analysis (CCA) and dynamic panel regression analysis we find significant effects of most of these shocks on output, while only fluctuations in oil prices have significant effects on inflation. Results also suggest a significant impact of FDI and passport sales on the external balance, a link that CCA identifies as the strongest among all analyzed relations. The model also shows how Covid-19 related shocks lead to substantial contractions in output in all ECCU countries and deterioration of the current account balance in most of them, depending on countries’ tourism dependency.

The Eastern Caribbean Currency Union
The Eastern Caribbean Currency Union

Author: Mr.Antonio Lemus

Publisher: International Monetary Fund

Published: 2012-01-01

Total Pages: 23

ISBN-13: 1463931220

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This paper studies the nature of the shocks affecting the Eastern Caribbean Currency Union (ECCU), and examines whether a hypothetical Eastern Caribbean fiscal insurance mechanism could insure member countries of the union against asymmetric national income shocks. The empirical results suggest that a one dollar reduction in an ECCU member country's per capita personal income could trigger, through reduced income taxes and increased transfers, flows equivalent to about 7 percent of the initial income shock. Each member of the currency union could benefit as well, although the extent of shock mitigation differs across individual countries.