Inflation and the variability of relative prices in the Caribbean: evidence from panel threshold models

This paper examines the impact of inflation and its variability for eight Caribbean countries; Antigua and Barbuda, Bahamas, Barbados, Dominica, Grenada, Jamaica, Saint Kitts and Nevis and Saint Vincent and the Grenadines. The paper goes beyond the standard approach to examine the variability of relative prices (VRP) within the context of a threshold effects framework, since it was recognized that whether inflation was low or very high was significant in determining its impact on an economy. The paper employed a panel threshold effects model to capture the non-linear nature of the relationship…

The Mexican peso crisis

In the author's view, the Mexican financial crisis which erupted at the end of 1994 was not unique, although it did have some special features. Thus, since it could happen again, it would be desirable to gain an in-depth understanding of it. This article therefore analyses the process and underlying causes of the Mexican peso crisis. For this purpose, the author distinguishes three main periods. The first of these extends from the beginning of 1990 up to March 1994, and an analysis is made of the problems that were hatching and the policy options that were available. With regard to the se…

Latin America and the Caribbean: projections 2006-2007

This document was prepared by the Economic Projections Centre, under the supervision of Hubert Escaith, Director of the Statistics and Economic Projections Division of the ECLAC. André Hofman, Chief of the Economic Projections Centre (ECP), was in charge of technical coordination and for conducting the study. The assistance of the national and subregional offices and of the ECLAC Economic Development Division was much appreciated. The views expressed in this document, which have not been formally edited, are the sole responsibility of the working group and do not necessarily reflect the vi…

From hard-peg to hard landing?: recent experiences of Argentina and Ecuador

Abstract Based on the analysis of the Argentinean currency board and the full dollarization scheme in Ecuador this paper argues that an intermediate exchange rate regime (compared to free floating or hard peg) will be a better option for countries subject to external financial shocks and a worldwide export and import structure. It shows that the Argentine convertibility system was successful as an anti-inflationary program. However, the reduction in the inflation rate has been accompanied by a dramatic change in relative prices of tradable and non tradable goods and services, which ha…

Economic Survey of the Caribbean 2010-2011: improving economic prospects amid global recovery

This survey provides an overview of the economic performance of the Bahamas, Barbados, Belize, Guyana, Jamaica, Suriname and Trinidad and Tobago, together with the eight member countries of the Eastern Caribbean Currency Union (ECCU) countries for 2010 and their outlook for 2011. The first section is a summary of the main issues raised in the report including an assessment of the economic prospects for 2011. Chapter II analyses the impact of the global economy on the subregion then provides a comparative analysis of the GDP and sectoral growth performance. This is followed by the subsection on…

Report of the twenty-ninth session of the Caribbean Development and Cooperation Committee of the Economic Commission for Latin America and the Caribbean

Potential output in Latin America: a standard approach for the 1950-2002 period

(*) This document was prepared by André A. Hofman of the Economic Projections Center of the Statistics Division, and Heriberto Tapia research assistant in the office of the Executive Secretary of ECLAC. The views expressed in this document, which has been reproduced without formal editing, are those of the authors and do not necessarily reflect the views of the Organization.. Abstract Potential output estimates are becoming increasingly important in policy design in Latin America (ECLAC, 2002) and the objective of this paper is to make a methodological contribution to this field of work…

Why is the Debate on Commodities so Crucial for Latin America?