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Foreign exchange market pressure and transmission of international disturbances: the case of Barbados, Guyana, Jamaica, and Trinidad & Tobago

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  • Stephen Pollard

Abstract

The Girton-Roper model of foreign exchange market pressure is applied to Barbados (1968-1993), Guyana (1964-1985), Jamaica (1964-1993), and Trinidad & Tobago (1967-1993) (years actually used in analysis in parentheses). Several versions of this model are estimated, tested and analysed so that either the monetarist or Keynesian model as well as the types of transmission of international disturbances can be identified. Contrary to some previous studies of these countries, strong support is found for a monetarist model of foreign exchange reserves and exchange rate movements in each country. In particular, the growth of US money supply effects exchange market pressure in Barbados and Guyana, while changes in US interest rates and the US inflation rate strongly influence exchange market pressure in Jamaica and Trinidad & Tobago.

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  • Stephen Pollard, 1999. "Foreign exchange market pressure and transmission of international disturbances: the case of Barbados, Guyana, Jamaica, and Trinidad & Tobago," Applied Economics Letters, Taylor & Francis Journals, vol. 6(1), pages 1-4.
    • Handle: RePEc:taf:apeclt:v:6:y:1999:i:1:p:1-4
    DOI: 10.1080/135048599353771
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    References listed on IDEAS

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    1. Davidson, Russell & MacKinnon, James G, 1981. "Several Tests for Model Specification in the Presence of Alternative Hypotheses," Econometrica, Econometric Society, vol. 49(3), pages 781-793, May.
    2. M. H. Pesaran, 1974. "On the General Problem of Model Selection," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(2), pages 153-171.
    3. Kim, Inchul, 1985. "Exchange Market Pressure in Korea: An Application of the Girton-Roper Monetary Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(2), pages 258-263, May.
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    Cited by:

    1. Akram, Gilal Muhammad & Byrne, Joseph P., 2015. "Foreign exchange market pressure and capital controls," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 37(C), pages 42-53.
    2. Shakila Jeisman, 2004. "Exchange Market Pressure in Australia," School of Economics and Finance Discussion Papers and Working Papers Series 183, School of Economics and Finance, Queensland University of Technology.
    3. Sayera Younus, 2010. "Exchange Market Pressure and Monetary Policy," Working Papers id:2389, eSocialSciences.

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