FOR IMMEDIATE RELEASE Washington, DC – May 4, 2021 : On April 26, 2021, the Executive Board of the International Monetary Fund (IMF) concluded the 2021 discussion on the common policies of the Eastern Caribbean Currency Union (ECCU) in the context of the Article IV consultations with member countries. 1 The fallout from the COVID-19 crisis is hitting ECCU economies hard. Tourism receipts (accounting for nearly 40 percent of GDP) have dried up, as tourist arrivals have come to a grinding halt. The authorities successfully contained the spread of the virus
for example, Ramey and Ramey, 2005; Hnatkovska and Loayza, 2003; Haddad and others 2012 ). Despite the central relevance of external shocks to ECCU economies, there is a rather limited quantitative understanding of their impact. Estimating the sensitivity of main macroeconomic variables to the most significant and frequent shocks to these countries is far from an academic endeavor, as it is crucial for the management of macroeconomic policies. This paper aims to understand the economic impact of major external and exogeneous shocks to ECCU economies, including