02390cas a2200301 a 4500 AALejournalIMF022348 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513588827 1018-5941 BD-DhAAL BD-DhAAL Guerson, Alejandro. Pooling Fiscal Risk in the ECCU : Quantifying Savings of a Regional Fund for Stabilization and Investment / Alejandro Guerson. Washington, D.C. : International Monetary Fund, 2021. 1 online resource (20 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 quantifies the savings obtained from risk pooling with a Regional Stabilization Fund (RSF) for the Eastern Caribbean Currency Union. A Monte Carlo experiment is used to estimate the size of a RSF conditional on probabilities of depletion under specific saving-withdrawal rules. Results indicate that regional risk pooling requires about half of the saving amount relative to the sum of individual-country savings. In addition to reducing the amount of saving requirements for stabilization, the RSF can improve welfare by realocating government consumption savings during booms towards public investment during recessions, resulting in an increase of public investment in the range of 0.5-1.5 percent of GDP per year depending on the country, with positive growth dividends. Moreover, the RSF also reduces the dispersion of public debt outcomes in light of the cross-country cyclical synchronicity of output and revenue, thereby strengthening the stability of the regional currency board. Mode of access: Internet General Financial Markets imf Mathematical Methods and Programming imf National Budget, Deficit, and Debt imf National Government Expenditures and Related Policies imf Other Public Investment and Capital Stock imf IMF Working Papers; Working Paper ; No. 2021/191 Full text available on IMF http://elibrary.imf.org/view/journals/001/2021/191/001.2021.issue-191-en.xml IMF e-Library