This paper assesses the evolution of Eastern Caribbean Currency Union (ECCU) real exchange rates over time, and examines whether the region has lost competitiveness. The main finding is that there is little evidence of overvaluation of the Eastern Caribbean (EC) dollar. The relationship summarized above permits the calculation of equilibrium current account balances or norms. The financing of ECCU current account imbalances appears stable. This paper also provides evidence on the distinctive impact that tourism plays in the determination of the real exchange rate in tourism-driven economies.
This year’s Annual Meetings of the Boards of Governors of the World Bank and the International Monetary Fund—the thirty-fourth—were held in Belgrade from October 2 to 5. The participants were faced with a difficult international economic situation as they met to discuss and chart the future direction of the world economy. This article reports on the main themes of the Fund Meeting.