Les réponses macroéconomiques des pays du CARICOM aux chocs extérieurs majeurs d’aujourd’hui
Global financial conditions have tightened notably and downside risks to the economic outlook have increased as a result to the covid-19, the war in Ukraine, also the climate change. These three events have created an important human crisis, stagflation in the world, also food crisis. The small deve...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Université des Antilles
2023-04-01
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| Series: | Études Caribéennes |
| Subjects: | |
| Online Access: | https://journals.openedition.org/etudescaribeennes/26316 |
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| Summary: | Global financial conditions have tightened notably and downside risks to the economic outlook have increased as a result to the covid-19, the war in Ukraine, also the climate change. These three events have created an important human crisis, stagflation in the world, also food crisis. The small development islands have been negatively impacted by these events. The small open countries of the CARICOM provide a fertile testing ground for examining the international transmission of real shocks. By virtue of theit size, plausible identifying assumptions can be made about the sources of these shocks, propagation mechanisms, and ultimate impact on the domestic economy. The goal of this paper is to investigate the extent to which external conditions affect macroeconomic performance of caribbean communauty (CARICOM) for the period 1995-2022. Relevant external factors that might impinge on macroeconomic fluctuations in the CARICOM comprise three sets of factors: crude oil prices, food prices, and real GDP growth of the United States. We propose to address these issues using a SVAR model in a block recursive formulation. More precisely, the model contains two blocks- a foreign block and a domestic block-. Standard VAR tools, such as variance decompositions and impulse response analysis, are utilised to assess both the quantitative relevance of foreign shocks and dynamic adjustment path of the caribbean economy in response to such shocks. This study reveals that real US PIB shock exert the greatest influence on macroeconomic fluctuations in CARICOM countries, that the external environment has a sizable impact on the macroeconmic performance of the small open economy of CARICOM countries, in particular the covid-19 and Ukraine war related shocks lead to substantial contractions in output in all CARICOM countries and deterioration of the current account balance. The model also shows that increase in US real GDP growth, and a fall in crude oil and food prices are all things being equal to otherwise expansionary in the CARICOM countries.Finally, to obtain small inflation, monetary stability and faster growth, we recommand to political leaders of these countries, not to diminish the households consumption but to increase the production. |
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| ISSN: | 1779-0980 1961-859X |