Description |
1 online resource (27 pages) |
Series |
IMF Working Papers |
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IMF Working Papers; Working Paper ; no. 18/134
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Contents |
Cover; Short Term Inflation Determinants in Barbados; I. INTRODUCTION; II. RECENT TRENDS IN HEADLINE INFLATION; III. THE ANALYTICAL FRAMEWORK; V. CONCLUSIONS; VI. REFERENCES |
Summary |
Inflation in Barbados is mainly imported. But how are external shocks transmitted to the domestic economy? Shouldn't there be also a domestic component, albeit very small, given the presence of capital controls? We focus on short term dynamics and contribute to the existing literature in three ways: (i) we identify the process with which inflation expectations are likely to be formed in Barbados; (ii) we add forward looking inflation expectations as one of the main channels through which external monetary shocks are transmitted to the economy; and (iii) we measure the importance of domestic shocks. We find that due to the peg, forward-looking inflation expectations in the reserve currency country are an important component of the inflation expectation process in Barbados and that they are a key channel in the international monetary transmission mechanism. Domestic factors, mainly monetary shocks, also matter given the limited degree of monetary autonomy provided by capital controls |
Notes |
Print version record |
Subject |
Inflation (Finance) -- Barbados
|
|
Economic history
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Inflation (Finance)
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SUBJECT |
Barbados -- Economic conditions
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Subject |
Barbados
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Form |
Electronic book
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ISBN |
1484363388 |
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148436158X |
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9781484361580 |
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9781484363386 |
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