ECCU Business Cycles Impact of the U.S.

With a fixed peg to the U.S. dollar for more than three decades, the tourism-dependent Eastern Caribbean Currency Union (ECCU) countries share a close economic relationship with the U.S. This paper analyzes the impact of the United States on ECCU business cycles and identifies possible transmission...

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Bibliographic Details
Main Author: Sun, Yan
Other Authors: Samuel, Wendell
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2009
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a ECCU Business Cycles  |b Impact of the U.S.  |c Yan Sun, Wendell Samuel 
260 |a Washington, D.C.  |b International Monetary Fund  |c 2009 
300 |a 23 pages 
651 4 |a United States 
653 |a International finance 
653 |a Business cycles 
653 |a Externalities 
653 |a Econometric analysis 
653 |a Dynamic Treatment Effect Models 
653 |a Financial sector policy and analysis 
653 |a Balance of payments 
653 |a Exports and Imports 
653 |a Diffusion Processes 
653 |a International economics 
653 |a Spillovers 
653 |a Vector autoregression 
653 |a Economic Growth of Open Economies 
653 |a Time-Series Models 
653 |a Cycles 
653 |a Economic growth 
653 |a Prices 
653 |a Macroeconomics 
653 |a Commodity prices 
653 |a Business Fluctuations 
653 |a Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) 
653 |a Econometrics 
653 |a Dynamic Quantile Regressions 
653 |a Econometrics & economic statistics 
653 |a Remittances 
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520 |a With a fixed peg to the U.S. dollar for more than three decades, the tourism-dependent Eastern Caribbean Currency Union (ECCU) countries share a close economic relationship with the U.S. This paper analyzes the impact of the United States on ECCU business cycles and identifies possible transmission channels. Using two different approaches (the common trends and common cycles approach of Vahid and Engle (1993) and the standard VAR analysis), it finds that the ECCU economies are very sensitive to both temporary and permanent movements in the U.S. economy and that such linkages have strengthened over time. There is, however, less clear-cut evidence on the transmission channels. United States monetary policy does not appear to be an important channel of influence, while tourism is important for only one ECCU country