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Western Hemisphere > Dominica

You are looking at 1 - 5 of 5 items for :

  • Type: Journal Issue x
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Cover IMF Working Papers
Assessing the Impact of Policy Changes on a Nowcast
Mr. Sam Ouliaris
and
Ms. Celine Rochon
Nowcasting enables policymakers to obtain forecasts of key macroeconomic indicators using higher frequency data, resulting in more timely information to guide proposed policy changes. A significant shortcoming of nowcasting estimators is their “reduced-form” nature, which means they cannot be used to assess the impact of policy changes, for example, on the baseline nowcast of real GDP. This paper outlines two separate methodologies to address this problem. The first is a partial equilibrium approach that uses an existing baseline nowcasting regression and single-equation forecasting models for the high-frequency data in that regression. The second approach uses a non-parametric structural VAR estimator recently introduced in Ouliaris and Pagan (2022) that imposes minimal identifying restrictions on the data to estimate the impact of structural shocks. Each approach is illustrated using a country-specific example.
Keywords:
Nowcasting; high frequency indicators; impulse responses; structural models; frequency data; Real GDP of Dominica; year-on-year percentage; baseline Nowcasting regression; USA real GDP; Oil prices; Vector autoregression; Structural vector autoregression; Global; Caribbean
Cover IMF Working Papers
Estimating the Impact of External Shocks on the ECCU: Application to the COVID Shock
Vivian Parlak
,
Mr. Gonzalo Salinas
, and
Mr. Mauricio Vargas
We measure the impact of frequent exogeneous shocks on small ECCU economies, including changes to global economic activity, tourism flows, oil prices, passport sales, FDI, and natural disasters. Using Canonical-Correlation Analysis (CCA) and dynamic panel regression analysis we find significant effects of most of these shocks on output, while only fluctuations in oil prices have significant effects on inflation. Results also suggest a significant impact of FDI and passport sales on the external balance, a link that CCA identifies as the strongest among all analyzed relations. The model also shows how Covid-19 related shocks lead to substantial contractions in output in all ECCU countries and deterioration of the current account balance in most of them, depending on countries’ tourism dependency.
Keywords:
FDI windfall; passport sale; ECCU economy; shocks lead; tourism shock; Oil prices; Tourism; Foreign direct investment; Current account balance; Natural disasters; Global; Caribbean
Cover IMF Working Papers
The Caribbean and its Linkages with the World: A GVAR Model Approach
Mr. Mauricio Vargas
and
Daniela Hess
Using data from 1980-2017, this paper estimates a Global VAR (GVAR) model taylored for the Caribbean region which includes its major trading partners, representing altogether around 60 percent of the global economy. We provide stilyzed facts of the main interrelations between the Caribbean region and the rest of the world, and then we quantify the impact of external shocks on Caribbean countries through the application of two case studies: i) a change in the international price of oil, and ii) an increase in the U.S. GDP. We confirmed that Caribbean countries are highly exposed to external factors, and that a fall in oil prices and an increase in the U.S. GDP have a positive and large impact on most of them after controlling for financial variables, exchange rate fluctuations and overall price changes. The results from the model help to disentangle effects from various channels that interact at the same time, such as flows of tourists, trade of goods, and changes in economic conditions in the largest economies of the globe.
Keywords:
WP; exchange rate; oil price drop; ECCU country; GVAR model; ECCU economy; shock equivalent; Oil prices; Vector autoregression; Oil; Tourism; Imports; Caribbean; Global
Cover IMF Working Papers
Macroeconomic Fluctuations in the Caribbean: The Role of Climatic and External Shocks
Mr. Sebastian Sosa
and
Mr. Paul Cashin
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.
Keywords:
WP; external shock; economy; real interest rate; output fluctuation; open economy; Business cycle; external shocks; VAR; block exogeneity; Eastern Caribbean; oil price shock; ECCU country; economy block; world real interest rate shock; Real interest rates; Oil prices; Natural disasters; Business cycles; Vector autoregression; Caribbean; Global
Cover IMF Working Papers
What Attracts Tourists to Paradise?
Ms. Evridiki Tsounta
This paper investigates the determinants of tourism demand in the Eastern Caribbean Currency Union. We estimate the demand function in a panel setting using annual data from 1979 to 2005. Results show that tourism arrivals are significantly affected by economic developments in the source countries, while price considerations and external shocks (such as hurricanes and wars) are also important. Supply factors, such as developments in foreign direct investment and the number of airlines servicing a destination, are also found to be significant determinants of tourism demand.
Keywords:
WP; tourism sector; demand