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A Currency Union for the Caribbean
Author:
Mr. Rupert D Worrell
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Series:
IMF Working Papers
Volume/Issue:
Volume 2003: Issue 035
Language:
English
Publication Date:
01 Feb 2003
DOI:
https://doi.org/10.5089/9781451845372.001
ISBN:
9781451845372
ISSN:
1018-5941
Pages:
35
Keywords:
WP; exchange rate; currency; dollar; exchange rate change; common currency; Currency Board; Dollarization; Caribbean; current account; board strategy; quasi-currency board; exchange rate crisis; quasi-currency board rules; board rule; currency board rule; currency risk; board regime; single market; Exchange rates; Exchange rate adjustments; Currencies; Monetary unions; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The experiences of Caribbean Economic Community countries show that exchange rate depreciation in these countries is inflationary, and that, while changes in the relative prices of tradables may affect exports, tourism, and imports, nominal exchange rate changes have no predictable effect on those relative prices. Under these circumstances, economic literature indicates that a fixed exchange rate regime is optimal, and Caribbean countries with (quasi-) currency boards have been successful in maintaining durable exchange rate pegs. Commitment to a currency board is a potentially vital step in achieving a currency union for the Caribbean.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund