|
Publications |
|
|
|
Research
Working Papers 2001
These are draft research papers
prepared by the economists in the Research Department of the
Central Bank of Barbados. Copies are produced for distribution
in the publication Working Papers published annually by the
Bank. Expressed permission is required from the authors before
they can be quoted, or reproduced.
-
CONSTRUCTING
AND USING INTERNATIONAL TRADE PRICES INDICES IN BARBADOS
by Ryan Straughn
IN:
Working Papers 2001 pp 1- 12
1. Trade.
2. Statistics. 3. Barbados
-
THE
DETERMINANTS OF CRIME IN BARBADOS
by Ann-Marie
Warner and Kevin Greenidge
IN: Working Papers 2001 pp 109 -
120
1. Crime.
2. Barbados.
This
paper attempts to determine some of the causes of crime in
Barbados from 1980-1999 using a simultaneous equation model.
Explanatory variables used in the analysis include the
unemployment rate, the extent of prison overcrowding, the
number of persons executed, per capita GCP, the number of
policemen relative to the size of the population, expenditure
on the police force, and the size of the population.
The impact of these variables on house break-ins,
robbery, larceny, rape, murder, indecent assault, and overall
crime are examined. Results
suggest that prison overcrowding and unemployment are
positively related to crime while police development
expenditure, police per capita and real GDP for the most part,
exerted negative influences on crime.
-
DOMESTIC
OR EXTERNAL POLICY TARGETS? : The case for having it both
ways
by Christopher Crowe
IN: Working Papers 2001 pp 13 -
22
1. Monitary Policy 2. Exchange
rates.
Monetary
policy making has become increasing dominated by the use of
explicit targets.
Targeting has been seen as one solution to the
Kydland-Precott time inconsistency problem.
However, in an environment characterised by
uncertainty, targets are only effective if they are
credible, and the interplay between targets and reputation
is therefore critical.
Although early work in the 1980s discussed issues of
credibility and reputation when there is uncertainty over
policy maker type, few researchers have developer explicit
models uncovering the relationship between credibility and
reputation within a targeting environment.
Recent work by Cukieman (2000) develops a model of
targeting and reputation, using a two-period policy game.
However, Cukieman's research is based on a closed
economy or an open economy with a flexible exchange rate
regime.
Many developing countries,particularly those with
limited room for textbook monetary policy interventions,
have chosen to implement a domestic policy target (monetary
or fiscal) in tandem with and external (exchange rate)
anchor.
This paper extends Cukieman's model to the fixed
exchange rate case, utilising insights from the first and
second generation exchange rate crisis literature.
-
FOREIGN
DIRECT INVESTMENT (FDI) INFLOWS AND THEIR IMPACT ON
BARBADOS' CURRENT ACCOUNT: : Implications for
substitutes/complements between FDI and exports
by Trevor
Campbell
IN: Working Papers 2001 pp 23 -
40
1. Foreign
Direct Investment. 2. Trade. 3. Government Accounting. 4.
Barbados.
Foreign
direct investment (FDI) capital inflows have played a
significant role in the development of Barbados.
These inflows are undertaken by the traded and
non-traded sectors.
This has implications for the current account and
foreign reserves.
If FDIis dominate by he former sector, the currrent
account and reserves will be boosted and investment
encouraged but if by the later sector, the opposite will
hold.
Thereafter, the long and short-run impact of FDI
inflows on the current account is addressed, with annual
data spanning thirty years, using regression analysis.
The results shows a positive relationship between
FDI and the current account in the long-run, suggesting
that FDI inflows and exports of Barbados are complements.
In the short-run, FDI in the previous period
impacts negatively on the current account but this pattern
is reversed if there is an inverse relationship between
FDI and the current account, implying that FDI and exports
are substitutes.
-
FOREIGN
RESERVE MEASUREMENT AND BOP CONSISTENCE : the Caribbean
example
by Daniel
Boamah
IN: Working Papers 2001 pp 33 -
39
1. Foriegn
Reserves.
2. Exchange Rates.
3. Barbados.
4. Jamaica. 5. Trinidad & Tobago. 6.
Caribbean.
This
paper seeks to document and discuss the various approaches to
the measurement of foreign reserves in Barbados, Jamaica and
Trinidad and Tobago.
It also examines trends in the identified reserve
measures, assesses how they conform to BOP accounting
procedures and discusses their suitability or otherwise for
measuring reserve adequacy in the three countries.
by Tessa Francillette
IN: Working Papers 2001 pp 121 -
132
1. WTO.
2. World Trade Organisation.
3. Food Sector.
4. Trade Liberalisation. 5. Caribbean.
One
of the agreements that emanated from the Uruguay Round of
negotiations was to "bound" tariffs on all
agricultural products and to reduce these tariffs by 24% over
the 10 year period 1995-2004 in the case of developing
countries.
This process could have implications for the demand of
most agricultural products.
This paper therefore examines the potential impact of
these changes in Caribbean countries trading regimes
on the demand for meat.
This is done by estimating five types of differential
demand systems and thereafter using the results to simulate
the impact of the tariff rate changes on price and the demand
for beef, mutton, pork and poultry.
The paper finds that given the high price elasticity of
demand for poultry in the Caribbean any reduction in its price
could lead to a significant increase in the demand for poultry
in the region.
However, this would also result in reduced demand for
the other types of meat such as beef, pork and mutton.
-
THE
MEASUREMENT OF COUNTRY SIZE AND IMPLICATIONS FOR THE
SURVIVAL OF SMALL STATES IN THE GLOBAL ECONOMY
by Andrew S.
Downes
IN: Working Papers 2001 pp 133 -
152
1. Small
Open Economies. 2. Small
States
This
paper examines the issue of the size of a country and the
implications for the survival of small states in the era of
global change.
The paper uses the multivariate statistical
techniques of principal components analysis and cluster
analysis to measure the size of a country and identify a
group of small countries.
It then examines the relationship between small size,
viability and vulnerability in light of the challenges
facing small states in a dynamic global economy.
Given the constraints facing such small stated, they
have to establish strategic alliances with other countries
and lobby international organizations in order to gain
access to the resources needed to enhance the welfare of
their citizens.
They must also place greater emphasis on the
development of their human resources.
-
MEASURING
FINANCIAL LIBERALISATION IN CARICOM
by Carlene
Belford
IN: Working Papers 2001 pp 41 -
52
1. Financial Liberalisation.
2. Regional Integration. 3. Caricom.
This
paper produces an index of financial liberalisation for the
member countries of CARICOM from 1979 to 1999.
The measure employed assessess the many government
policies regulating inward and outward financial
transactions and allows comparison of the forms and
intensity of
regulation across time and space. It is based upon a
coding of the domestic and international laws of the
individual CARICOM states, most of whose legislation is
available from 1979 to 1999.
The resulting indices appear to be consistent with
the observed changes in financial liberlisation in the
individual territories.
-
NONLINEAR
BEHAVIOUR OF RETURNS IN AN EMERGING STOCK MARKET
by Hyginus
Leon, Shelton Nicholls, Dorian Noel
IN: Working Papers 2001 pp 53 -
72
1. Stock
Markets.
2. Capital Markets.
3. Trinidad & Tobago
It
is generally recognized that volatility in the prices of
securities is due, in part, to traders continuously revising
their preference sets in response to the arrival of
unanticipated information.
In particular, traders may update beliefs about the
value of an asset in response to information on both market
microstructure and the macro-economy.
We argue that the microstructure characteristics of the
Trinidad and Tobago Stock Exchange (TTSE) are consistent with
serial correlation, volatility clustering, and nonlinearity in
stock returns.
The underlying behavioural patterns arise because
informed traders may posses "long-lived" information
sets arising from poor dissemination and disclosure of market
information.
The
paper has two objectives: (1) to investigate a price-volume
relationship for stock returns, accounting for conditional
heteroscedasticity and nonlinearity; and (2) to determine
whether volume is a sufficient proxy for information flow. Our
results show that simplelinear autoregressive models of stock
returns display significant nonlinearities, which can partly
be explained by functional and variable misspecification in
the functions describing the mean and variance of returns.
In particular, we find that prices and volume are not
sufficient statistics for the conditioning information set of
traders because both volume and the real effective exchange
rate are significant predictors for the distribution of stock
returns.
-
POLICY-MAKING
AND FORECASTING WITH A PESARAN-TYPE CORE MODEL OF THE
TRINIDAD & TOBAGO ECONOMY
by Patrick
Kent Watson
IN: Working Papers 2001 pp 85 -
94
1. Economic Models. 2.
Trinidad & Tobago.
This
principal objective of this paper is the construction and
evaluation of a Pesaran-type core quarterly econometric
model of the
Trinidad and Tobago economy using data covering the
period 1970-1998.
It represents the first step in the construction of a
more comprehensive model of the Trinidad & Tobago
economy with this core at the centre.
Such a model will be used for forecasting and for
policy evaluation.
In the paper, the econometric methodology to be employed is
presented and discussed.
This is followed by a description of the hypothesized
long run relations in the core model which are derived from
economic theory as well a discussion about the associated
problems relating to the corresponding data to be used.
The core model is estimated after testing for unit
roots and cointegration vectors.
The Error Correction form of the model is then
derived and evaluated.
Persistence profiles based on system wide shocks are
derived and discussed.
Forecasts derived from the model are those obtained
from benchmark ARIMA models.
-
THE
RATES OF RETURN TO EDUCATION IN BARBADOS
by Jennifer
S. Griffith
IN: Working Papers 2001 pp 153 -
170
1. Education.
2. Barbados.
Barbados
is a small developing country that boasts one of the highest
literacy rates in the world.
This feat has been achieved as a result of substantial
public subsidisation of education.
By utilising the Mincerian method (1974),the paper
estimates the rate of return to education (RCRE) in Barbados.
Given the level of public financing of all levels of
education in Barbados (including university education), it is
not surprising to find that university education has the
highest private RORE. However,
the implication of low social returns is worrisome, suggesting
that government may need to rethink its policy on education in
the future.
-
SOME
MONETARY IMPLICATIONS FOR PUBLIC DEBT MANAGEMENT IN THE
CARIBBEAN
by Daniel
Boamah, Kevin Greenidge
IN: Working Papers 2001 pp 95 -
108
1. Public Debt Management.
2. Caribbean.
|
|
|
|
|
Quick
Links |
|
Press Releases
|
|