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Macroeconomic Fluctuations in the Caribbean :, The Role of Climatic and External Shocks, Sebastian Sosa, Paul Cashin

Abstract
This paper develops country-specific VAR models with block exogeneity restrictions to analyze how exogenous factors affect business cycles in the Eastern Caribbean. It finds that external shocks play a key role, explaining more than half of macroeconomic fluctuations in the region. Domestic business cycles are especially vulnerable to changes in climatic conditions, with a natural disaster leading to an immediate and significant fall in output-but the effects do not appear to be persistent. Oil price and external demand shocks also contribute significantly to domestic macroeconomic fluctuations. An increase in oil prices (external demand) is contractionary (expansionary), and the effects dissipate up to three years after the shock
Table Of Contents
Contents; I. Introduction; II. Econometric Approach; A. Specification and Identification Strategy; B. Block Structure, Variables, and Data; Tables; 1. Block Exogeneity Restrictions of the VAR Model; C. Estimation; III. Business Cycle Responses to External Shocks: Empirical Results; 2. Sources of Business Cycle Fluctuations in the Eastern Caribbean; 3. Climatic Shocks and Output Fluctuations in the ECCU; Figures; 1. Natural Disasters and GDP Growth in the Eastern Caribbean; 2. Response of Real Output to Climatic Shocks; 3. Response of Real Output to Climatic Shocks
Language
eng
Literary Form
non fiction
Note
"July 2009."
Physical Description
1 online resource (29 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781462351732

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