Monetary Policy And Deficits Financing In Jamaica
A vector error-correction model (VECM) is estimated to examine the relationship among interest rates, monetary base, credit claims to the private sector, real income, prices, government spending, budget deficits and exchange rate in Jamaica. Cointegration is used to identify the VECM. The empirical results show that fiscal deficits are monetized in the long-run; the roles of financial services are weak, and inverse price-real output relationship exists in both the short-run and the long-run. Monetary disciplines, reduction in fiscal spending and sound regulatory actions are crucial to reduce the national debt, the inflation and interest rates, crowd in private investments, avert financial crisis and promote economic growth.
Volume (Year): 28 (2003)
Issue (Month): 1 (June)
|Contact details of provider:|| Web page: http://www.jed.or.kr/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dickey, David A & Rossana, Robert J, 1994. "Cointegrated Time Series: A Guide to Estimation and Hypothesis Testing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(3), pages 325-53, August.
When requesting a correction, please mention this item's handle: RePEc:jed:journl:v:28:y:2003:i:1:p:81-99. See general 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: (Changhui Kang)
If references are entirely missing, you can add them using this form.