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The external public debt in the Caribbean Community

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  • Greenidge, Kevin
  • Drakes, Lisa
  • Craigwell, Roland

Abstract

A notable build-up in the foreign debt stock of the Caribbean Community (CARICOM) has been observed in recent years. By employing recent developments in panel unit root and co-integration analysis, this paper finds the major contributing factors to be: the output gap, real effective exchange rate, exports, real interest rate and current deviation of government expenditure from its trend value. Scenario analyses suggest that the time periods required to achieve the benchmark foreign debt to GDP ratio of 30%, for some countries, are too long, given the assumed parameters, but greater fiscal effort or more output growth can shorten these periods considerably.

Suggested Citation

  • Greenidge, Kevin & Drakes, Lisa & Craigwell, Roland, 2010. "The external public debt in the Caribbean Community," Journal of Policy Modeling, Elsevier, vol. 32(3), pages 418-431, May.
    • Handle: RePEc:eee:jpolmo:v:32:y::i:3:p:418-431
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    Cited by:

    1. Chukwuebuka Bernard Azolibe, 2021. "Determinants of External Indebtedness in Heavily Indebted Poor Countries: What Macroeconomic and Socio-Economic Factors Matter?," The American Economist, Sage Publications, vol. 66(2), pages 249-264, October.
    2. Issiaka Coulibaly & Blaise Gnimassoun & Hamza Mighri & Jamel Saadaoui, 2023. "International reserves, currency depreciation and public debt: new evidence of buffer effects in Africa," Working Papers of BETA 2023-42, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    3. Sèna Kimm Gnangnon, 2012. "Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries," CERDI Working papers halshs-00749470, HAL.
    4. Grekou, Carl, 2015. "Revisiting the nexus between currency misalignments and growth in the CFA Zone," Economic Modelling, Elsevier, vol. 45(C), pages 142-154.
    5. Sena Kimm GNANGNON, 2012. "Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries," Working Papers 201237, CERDI.
    6. Roland Craigwell & Allan Wright, 2011. "Foreign direct investment and corruption in developing economies: Evidence from linear and non-linear panel Granger causality tests," Economics Bulletin, AccessEcon, vol. 31(3), pages 2272-2283.
    7. Sèna Kimm Gnangnon, 2012. "Does Structural Economic Vulnerability Matter for Public Indebtedness in Developing Countries?," CERDI Working papers halshs-00749469, HAL.
    8. ALEME, Timkete, 2019. "An Econometric Analysis Of Determinants Of Debt Sustainability In Ethiopia," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 23(1), pages 39-55, March.
    9. Zahir Mohamed Omar & Mohamed Isse Ibrahim, 2021. "Determinants of External Debt: The Case of Somalia," Asian Development Policy Review, Asian Economic and Social Society, vol. 9(1), pages 33-43, March.
    10. Sena Kimm GNANGNON, 2012. "Does Structural Economic Vulnerability Matter for Public Indebtedness in Developing Countries?," Working Papers 201236, CERDI.
    11. Hughes Hallett, Andrew & Martinez Oliva, Juan Carlos, 2015. "The importance of trade and capital imbalances in the European debt crisis," Journal of Policy Modeling, Elsevier, vol. 37(2), pages 229-252.
    12. Sèna Kimm Gnangnon, 2012. "Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries," Working Papers halshs-00749470, HAL.
    13. Gnangnon, Sèna Kimm, 2013. "Structural vulnerability and excessive public indebtedness in CFA Franc Zone countries," Economic Modelling, Elsevier, vol. 35(C), pages 816-832.
    14. Sèna Kimm Gnangnon, 2012. "Does Structural Economic Vulnerability Matter for Public Indebtedness in Developing Countries?," Working Papers halshs-00749469, HAL.
    15. Carl Grekou, 2014. "Revisiting the nexus between currency misalignments and growth in the CFA Zone," Working Papers hal-04141364, HAL.
    16. Preeya Mohan & Eric Strobl, 2021. "The impact of tropical storms on the accumulation and composition of government debt," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(3), pages 483-496, June.

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