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Current account deficit sustainability: the case of Barbados

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  • Kevin Greenidge
  • Carlos Holder
  • Alvon Moore

Abstract

This article investigates the sustainability of the current account deficit in Barbados over the period 1960 to 2006. Various unit root and cointegration techniques are employed to determine whether the country is satisfying its Intertemporal Budget Constraint (IBC). The cointegration regressions suggest that the current account of Barbados is sustainable and that deviations from long-run equilibrium between real exports and imports are corrected in the short-run with imports making the adjustment.

Suggested Citation

  • Kevin Greenidge & Carlos Holder & Alvon Moore, 2009. "Current account deficit sustainability: the case of Barbados," Applied Economics, Taylor & Francis Journals, vol. 43(8), pages 973-984.
    • Handle: RePEc:taf:applec:v:43:y:2009:i:8:p:973-984
    DOI: 10.1080/00036840802600095
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    References listed on IDEAS

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    1. Milesi-Ferretti, Gian Maria & Razin, Assaf, 1996. "Current Account Sustainability: Selected East Asian and Latin American Experiences," CEPR Discussion Papers 1509, C.E.P.R. Discussion Papers.
    2. Mr. Alvin Hilaire, 2000. "Caribbean Approaches to Economic Stabilization," IMF Working Papers 2000/073, International Monetary Fund.
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