Macroeconomic fluctuations in the Eastern Caribbean: The role of climatic and external shocks
2011; Taylor & Francis; Volume: 22; Issue: 5 Linguagem: Inglês
10.1080/09638199.2011.599854
ISSN1469-9559
Autores Tópico(s)Monetary Policy and Economic Impact
ResumoThis article develops country-specific vector autoregressive (VAR) models with block exogeneity restrictions to analyze how exogenous factors affect business cycles in the Eastern Caribbean. It finds that external shocks play a key role, explaining more than half of macroeconomic fluctuations in the region. Domestic business cycles are especially vulnerable to changes in climatic conditions, with a natural disaster leading to an immediate and significant fall in output – but the effects do not appear to be persistent. Oil price and external demand shocks also contribute significantly to domestic macroeconomic fluctuations. An increase in oil prices (external demand) is contractionary (expansionary), and the effects dissipate up to three years after the shock.
Referência(s)