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The external public debt in the Caribbean Community

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  • Greenidge, Kevin
  • Drakes, Lisa
  • Craigwell, Roland

Abstract

A notable build-up in the foreign debt stock of the Caribbean Community (CARICOM) has been observed in recent years. By employing recent developments in panel unit root and co-integration analysis, this paper finds the major contributing factors to be: the output gap, real effective exchange rate, exports, real interest rate and current deviation of government expenditure from its trend value. Scenario analyses suggest that the time periods required to achieve the benchmark foreign debt to GDP ratio of 30%, for some countries, are too long, given the assumed parameters, but greater fiscal effort or more output growth can shorten these periods considerably.

Suggested Citation

  • Greenidge, Kevin & Drakes, Lisa & Craigwell, Roland, 2010. "The external public debt in the Caribbean Community," Journal of Policy Modeling, Elsevier, vol. 32(3), pages 418-431, May.
    • Handle: RePEc:eee:jpolmo:v:32:y::i:3:p:418-431
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    4. Sèna Kimm Gnangnon, 2012. "Structural Vulnerability and Excessive Public Indebtedness in CFA Franc Zone Countries," CERDI Working papers halshs-00749470, HAL.
    5. Grekou, Carl, 2015. "Revisiting the nexus between currency misalignments and growth in the CFA Zone," Economic Modelling, Elsevier, vol. 45(C), pages 142-154.
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