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Monetary Union and Fiscal Discipline Evidence from CARICOM


  • Troy Lorde

    (University of the West Indies)

  • Brian Francis

    (University of the West Indies)

  • Mahalia Jackman

    (Central Bank of Barbados)


This study examines the disciplanary effect of monetary union in the Caribbean Community (CARICOM); specifically, whether there is a systematic difference between fiscal discipline in the Eastern Caribbean Currency Union (ECCU), a sub-regular grouping in CARICOM and other CARICOM members which retain monetary sovereignty. Fixed effects estimation is applied to a panel of 12 CARICOM countries over the period 1984-2004. Results indicate that non-ECCU countries are relatively more fiscally disciplined than ECCU countries, and that the dissimilarities between the 2 groups may be attributed to differences in real GDP per capita, openness, net international reserves and financial depth.

Suggested Citation

  • Troy Lorde & Brian Francis & Mahalia Jackman, 2009. "Monetary Union and Fiscal Discipline Evidence from CARICOM," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 12(2), pages 109-126, Winter.
  • Handle: RePEc:ekn:ekonom:v:12:y:2009:i:2:p:109-126

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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission


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