Belize has been hit hard by the COVID-19 pandemic, which led to a deep recession and worsened fiscal and external positions from already weak levels. The opposition People's United Party won the November 2020 elections by a wide margin, which gives the new government a unique opportunity to jump...

Based on the modified Froot and Obstfeld (1991a) simple stochastic macro model, this paper addresses the relative stabilizing performance of a dual exchange rate system from the viewpoint of target zones. We focus on an experiment in which the central bank implements a target zone policy in the...

This paper notes that a high sterilization coefficient plus a de facto pegged exchange rate indicates the existence of dual nominal anchors. The econometric evidence presented shows that several Caribbean economies with fixed exchange rate regimes also possess high sterilization coefficients....