Private Consumption Expenditure in the Eastern Caribbean Currency Union

Richard Sutherland and Roland Craigwell

MPRA Paper from University Library of Munich, Germany

Abstract: This paper innovates by being the first to estimate a consumption function of a monetary union as a single entity. It is also the first empirical consumption research on the Eastern Caribbean Currency Union (ECCU). Due to the open nature of these nations it further adds to the literature by examining open economy variables like the terms of trade and the degree of export orientation. The panel dynamic least squares method employed indicates that private spending is primarily driven by income, financial wealth, the interest rate, terms of trade and the degree of export orientation.

Keywords: Consumption function; panel dynamic OLS; monetary union (search for similar items in EconPapers)
JEL-codes: C33 D12 E21 F15 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40932

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