Banana price shocks and adjustment within a unified currency area
AbstractThe paper traces the impact of a shock to banana prices on key macroeconomic variables for the Windward Islands and the Eastern Caribbean Central Bank (ECCB) Monetary Union as a whole. Net foreign assets of Dominica are expected to show the largest decline while those for Grenada the least. The impact on the net foreign assets of the subregion may be mitigated by other foreign exchange inflows. In addition there was little variation in the growth in M1 with the exception of Dominica suggesting money-output neutrality. Government revenues were not adversely affected suggesting that the terms of trade shock may be viewed as being temporary and agents borrow to maintain existing tastes and preferences. This result hinged on the nexus between government revenue and the reliance on trade taxes on imports suggesting some ambiguity in the explanation of the Harberger-Laursen-Meltzer effect.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 31 (1999)
Issue (Month): 11 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RAEC20
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.