Monetary regimes and inflation in 12 Caribbean economies

Boyd, Derick; Smith, Ron

doi:10.1108/01443580610666055

Cited by 7 publications

(10 citation statements)

References 6 publications

(6 reference statements)

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“…While there is no reference or discussion with respect to the implication of their results for monetary union, both studies cast some doubts on the success of a common monetary policy regime in the region. In a manner, similar to Turner and Pentecost (), our research also represents an extension of Boyd and Smith (, ) by focusing on an extended time period to 2009Q4 (with variations for data availability across countries) and by utilising more recent and advanced techniques in the analysis of unit root. Furthermore, our analysis is used to better understand the potential of a monetary union and a common monetary policy in the region.…”

Section: Background and Literature Reviewmentioning

confidence: 95%

“…Using an autoregressive moving average model‐ generalised autoregressive conditional heteroscedasticity (ARMA‐GARCH) specification, the author concludes that while Bahamas and Jamaica exhibit a high degree of persistence, the evidence for Barbados suggests lower persistence. Boyd and Smith (, ) employ a simple unit root analysis based on the augmented Dickey Fuller test to investigate inflation persistence in the region. They find that Eastern Caribbean Central Bank countries, Belize, Barbados and the Bahamas have low persistence in contrast to Guyana and Jamaica, while Antigua & Barbuda and Trinidad & Tobago fall somewhere in the middle.…”

Section: Background and Literature Reviewmentioning

confidence: 99%

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Convergence of Inflationary Shocks: Evidence from the Caribbean

Cuestas

Ramlogan-Dobson

2013

World Economy

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In this paper, we aim to shed some light on the inflation dynamics in the Caribbean. We analyse the inflation rates for twelve countries using various time series methods. The results show that the inflation rates are mean reverting processes and that there is evidence of a convergence club in inflation rates within the area, which contradicts previous studies. Our contribution implies a high degree of similarity in the dynamics of our target countries' inflation rates.

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Section: Background and Literature Reviewmentioning

confidence: 95%

Section: Background and Literature Reviewmentioning

confidence: 99%

Convergence of Inflationary Shocks: Evidence from the Caribbean

Cuestas

Ramlogan-Dobson

2013

World Economy

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“…Central banks were established in 1962 for Jamaica, 1972 for Barbados, and 1974 for the Bahamas (Boyd and Smith, 2006). …”

Section: Notesmentioning

confidence: 99%

“…Boyd and Smith (2006, 2007) provide an excellent discussion of the importance of the evolution of monetary institutions on monetary policy and economic performance in the Caribbean region. Ramlogan (2004) finds that the credit and exchange rate channels are more important than the money channel in the transmission of monetary policy to the real sector in the cases of Jamaica, Trinidad and Tobago, Barbados, and Guyana.…”

Section: Notesmentioning

confidence: 99%

Inflation and inflation uncertainty: evidence from the Caribbean region

Payne

2008

Journal of Economic Studies

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PurposeThe purpose of this paper is to extend the literature on the relationship between inflation and inflation uncertainty by examining three Caribbean countries: the Bahamas, Barbados, and Jamaica.Design/methodology/approachARMA‐GARCH models are used to estimate inflation uncertainty along with Granger‐causality tests to infer the relationship between inflation and inflation uncertainty.FindingsThe results reveal that both the Bahamas and Jamaica exhibit a high degree of volatility persistence in response to inflationary shocks, while Barbados has a much lower persistence measure. Granger‐causality tests indicate that an increase in inflation has been a positive impact on inflation uncertainty for each country. However, an increase in inflation uncertainty yields a decrease in inflation in the case of Jamaica. In summary, the results for the Bahamas and Barbados support the Friedman‐Ball hypothesis, whereas the results for Jamaica support Holland's stabilization‐motive hypothesis.Research limitations/implicationsFuture research on inflation and inflation uncertainty can be extended to incorporate possible regime shifts associated with fiscal and monetary policy.Originality/valueThe study fills a void in the literature with respect to the inflation‐inflation uncertainty nexus for Caribbean countries. The results of the paper may be useful to policymakers in the formulation of fiscal and monetary policy.

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“…In the last decades there has developed a consensus in the literature that the use of rules implies more advantages than discretion behavior in improving economic performance (Boyd and Smith, 2006). Nowadays the analysis on transparency is gaining the attention of several economists who analyze monetary policy.…”

Section: Introductionmentioning

confidence: 99%

Economic transparency and effectiveness of monetary policy

Mendonça

Filho

2007

Journal of Economic Studies

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PurposeThe purpose of this paper is to study if the central bank (BC) communications affect the effectiveness of the monetary policy.Design/methodology/approachFor this analysis, a new Keynesian theoretical model and the ordinary least squared methodology were used. The objective to be achieved was to determine if there is some effect of economic transparency on accountability, inflation average, output gap, interest and central bank credibility.FindingsThe results highlighted that central banks with greater transparency contribute to decrease inflation rate and interest rate. The findings denote that an increase in the information quality (clarity) implies a significant change in the rate of readjustment of market expectations. Furthermore, central bank transparency contributes to anchor the public expectations and to affect long‐run interest rates.Research limitations/implicationsImpulse‐answer research was employed to show how the central bank transparency affects the credibility of monetary authorities.Practical implicationsThis paper suggests that the central bank publicizes its outlook, its policy monetary decisions, its expectations and its preferences.Originality/valueThe originality of the paper resides in the fact that empirical and theoretical studies were made in the single work. Also, new results were found denoting that economic transparency reduces uncertainty effect and increases the power of incentive contract made between the BC and public.

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Monetary regimes and inflation in 12 Caribbean economies

Cited by 7 publications

References 6 publications

Convergence of Inflationary Shocks: Evidence from the Caribbean

Convergence of Inflationary Shocks: Evidence from the Caribbean

Inflation and inflation uncertainty: evidence from the Caribbean region

Economic transparency and effectiveness of monetary policy

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