01851cas a2200253 a 4500 AALejournalIMF005937 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451873061 1018-5941 BD-DhAAL BD-DhAAL Sosa, Sebastian. Macroeconomic Fluctuations in the Caribbean : The Role of Climatic and External Shocks / Sebastian Sosa, Paul Cashin. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (27 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper develops country-specific VAR models with block exogeneity restrictions to analyze how exogenous factors affect business cycles in the Eastern Caribbean. It finds that external shocks play a key role, explaining more than half of macroeconomic fluctuations in the region. Domestic business cycles are especially vulnerable to changes in climatic conditions, with a natural disaster leading to an immediate and significant fall in output-but the effects do not appear to be persistent. Oil price and external demand shocks also contribute significantly to domestic macroeconomic fluctuations. An increase in oil prices (external demand) is contractionary (expansionary), and the effects dissipate up to three years after the shock. Mode of access: Internet Cashin, Paul. IMF Working Papers; Working Paper ; No. 2009/159 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/159/001.2009.issue-159-en.xml IMF e-Library