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Inflation persistence: Implication for a monetary union in the Caribbean

Author

Listed:
  • Juan Carlos Cuestas

    (Department of Economics, The University of Sheffield)

  • Carlyn Dobson

    (Division of Economics, Nottingham trent University)

Abstract

In this paper we aim to shed some light on the potential for creating a monetary union in the Caribbean. We analyse the inflation rates for twelve countries using various time series methods. The results show that the inflation rates are mean reverting processes and that there is evidence of a convergence club in inflation rates within the area, which contradicts previous studies. Our contribution implies good news for the creation of a common central bank in the Caribbean.

Suggested Citation

  • Juan Carlos Cuestas & Carlyn Dobson, 2011. "Inflation persistence: Implication for a monetary union in the Caribbean," Working Papers 2011017, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2011017
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    References listed on IDEAS

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    More about this item

    Keywords

    Caribbean; inflation persistence; monetary union and unit roots;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F15 - International Economics - - Trade - - - Economic Integration

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