Between 1990 and 1994, the average size of the public sector in the Caribbean was just 16 percent of GDP, in the five years hence, the ratio has climbed and currently stands at 22 percent of GDP. While an expansion in the size of government usually results in the greater provision of services,...

Traditional finance theory argues that as the size of a loan expands, the interest rate on that loan rises to accommodate the increased risk associated with the loan. However, utilizing firm-level data of the Barbadian banking industry, it is observed that the smaller the loan's size, the...

In countries without an explicit inflation targeting mechanism, a stable relationship between the monetary base and the money supply allows policymakers to implement changes in monetary policy with a reasonable degree of certainty about the impact on the money supply. The relationship can,...

This article examines the empirical link between mergers and investment using a panel of 61 developed and developing countries between 1987 and 2001. The results indicate that, on average, a rise in cross-border merger and acquisition activity tends to reduce investment. However, in high-income...

Estimates of the output gap are useful for identifying the sustainable level of noninflationary output growth in countries with a flexible exchange rate regime. For nations with a fixed exchange rate, however, domestic prices are inexorably linked to the prices of its main trading partners and...

Financial systems across the world have all come under pressure due to the on-going financial crisis. One of the most often asked questions during a collapse is how long and how deep will the decline be as well as what policy initiatives can be employed to shorten the recession. This study...

This paper provides an assessment of the size and composition of household debt in Barbados over the period 1990 to 2010. First, the study estimates the size of household indebtedness, with particular emphasis on recent trends in household debt and the main providers of credit. Second, it...

This paper uses an estimated model of residential electricity demand to examine the impact of proposed tariff changes on a representative sample of 130 Barbadian households. The estimated equation results suggest that the price elasticities of demand for particular appliances varied...

Over the last decade or more micro price studies have proliferated. In this paper a survey of this literature reveals alternative theoretical explanations of sticky prices: (a) sellers review and change prices only at predetermined intervals (except under extraordinary circumstances), so that...

Economic theory suggests that opening the capital account should allow a country to diversify away economic shocks, increase capital inflows, expand economic growth and efficiency as well as encourage governments to pursue good policies. The empirical evidence with regard to these theoretical...