This paper uses a two-step Markov-switching error correction model to determine the impact of government employment on the labour market in Barbados, a small island developing Caribbean state. The results suggest that there is partial crowding out, as public sector hiring reduces private...

Central banks usually intervene in order to calm disorderly market conditions, fix exchange rate misalignments, stabilise erratic short-term exchange rate fluctuations, or quell the excess demand/supply of FX. Under a floating regime, the size and timing of intervention are critical policy...

The Central Bank of Barbados often intervenes – buys or sells from the foreign exchange (FX) reserves – to ensure the daily clearing of the FX market. This paper estimates an FX intervention function for Barbados using a dynamic complementary log-log model. Three general findings emerged:...

There have been numerous attempts at the formation of regional policy groupings within Latin America and the Caribbean (LAC). This paper analyses the similarities in macroeconomic policies pursued by member countries using realised correlation analysis on 26 LAC countries and observations...

Using vector autoregressive (VAR) methodology, this paper empirically investigates the macroeconomic effects of oil price fluctuations on Trinidad and Tobago. Overall, we find that the price of oil is a major determinant of economic activity of the country. Our impulse response functions suggest...

Keynesians propose that increases in tourist arrivals are associated with an expansion in private spending through the multiplier effect. To test this hypothesis, this study augments a simple consumption function with tourist arrivals and employs the dynamic OLS method to compute the short and...

With the ongoing global financial crisis ¡V which began with the collapse of the US sub-prime market in 2007 ¡V the Barbadian economy is expected to contract in 2009. As a means of stimulating economic activity and providing job opportunities, the government has committed itself to completing...

Purpose – The purpose of this paper is to investigate the potential link between remittances and economic volatility in small island developing states. Design/methodology/approach – The paper estimates a panel data model using a database containing 20 small island developing states (SIDS)...

Purpose – Remittances are the fastest growing source of foreign exchange earnings for developing countries. The purpose of this paper is to assess the impact of remittances on economic volatility of the receiving country. Design/methodology/approach – A panel of 95 countries over the period...

Keynesians propose that increases in tourist arrivals are associated with an expansion in private spending through the multiplier effect. To test this hypothesis, this study augments a simple consumption function with tourist arrivals and employs the dynamic OLS method to compute the short and...