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A Var Analysis of Cross Country Monetary Spillover Effects: The Case of Barbados and the US

  • Central Bank Of Barbados
  • 22 Jul,1998
  • 1
  • Working Papers,
  • Print

This paper attempts to provide an empirical assessment of the cross-country spill over affects from the US to the Barbados economy. These effects are measured with regard to movements in real money balances, real output, and interest rates. Vector autoregressions, along with impulse response functions and Granger Casualty are used to identify both the long run and short run responses of the Barbadian economy to changes in output, money and interest rates in the US. The results indicate that the changes in US interest rates may have a negative effect on the Barbadian economy while changes in the US money balances could have a positive long run effect.
 

WP1999-01