Use the latest browser recommended by Microsoft
Get speed, security and privacy with Microsoft Edge
This paper constructs an econometric model of the monetary sector of Barbados by decomposing the money supply into its various elements. The formulation and structure of this simultaneous model draws heavily from that done by Parikh and Starmer (1994) for Bangladesh's monetary sector. The underlying assumption here is that money supply and prices are closely related, running from prices to money. This paper looks at the eleven behavioural equations and six basic identities and establishes the explicit links between money and prices. The model is estimated and the report of the results of simulations exercises performed. This is followed by the summary and conclusion. (Prepared for Presentation at the Research Department, Central Bank of Barbados annual review Seminar, July 14-15, 1995)