Public expenditure and stabilization: improving Caribbean performance

Author(s): Worrell, DeLisle (1993)

Created 22 Jul, 1993
Categories Working Papers Delisle Worrell
Views: 2205
This paper explores the implications of the level and allocation of government expenditure in small open economies, drawing on experience in the Caribbean. The economy is modelled with two sectors: a tradable sector where demand elasticities are infinite at prices set by international markets and non-tradable sector for which both prices and output may vary. The stability of the economy is defined by the way the relative prices of tradables and nontradables adjust in search of internal and external balance. (Prepared for the 38th Conference of the Applied Econometrics Association Athens, April 14-15, 1993)

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