Caribbean small island developing states (SIDS) are being disproportionately affected by climate ... more Caribbean small island developing states (SIDS) are being disproportionately affected by climate change. While no country wants to accept legal liability for their emissions, the Caribbean region faces an urgent need to mobilize financing to address loss and damage. This study proposed a voluntary insurance to address the loss and damage from climate change. Voluntary insurance can be used to pool risk across countries and make a payout to cover the loss from extreme weather events. The insurance payout could be parametric, which can eliminate the trouble assessing of losses in indemnity insurance. The key features affecting the trigger for the payout could be the occurrence of the named peril, and meteorological data such as precipitation. The size of the payout would be determined by estimating the loss and damage of Caribbean SIDS from extreme weather events. The premium could be based on solidarity and thus can be the average cost of the total payout per annum. Wavelet coherence...
The objective of this study is to empirically investigate: i) the extent in which shipping costs ... more The objective of this study is to empirically investigate: i) the extent in which shipping costs can cause and predict the food inflation in Trinidad and Tobago (T and T); ii) the extent in which international food prices can drive food inflation in T and T; and iii) the impact of the Russia-Ukraine conflict on food prices in T and T. As a fourth sub-objective, this study seeks to provide policy recommendations to address the food price inflation in T and T. A structural model is sought as it can use information about the past prices of the international food prices and shipping rates to forecast T and T's food price inflation. this study used monthly data on T and T retail price index food subcategory, the FAO Food Price Index (FFPI), and the Freightos Baltic Index over the January 2015 to November 2022 period. the Support Vector Regression (SVR) model was applied and used the FFPI and Freightos Baltic Index as the leading indicators to forecast T and T's food price inflati...
The implementation of the Nationally Determined Contributions (NDCs) is crucial for achieving the... more The implementation of the Nationally Determined Contributions (NDCs) is crucial for achieving the goals of the Paris Agreement. However, the lack of financial support from the international community has been a significant obstacle for the Caribbean Community (CARICOM) Member States. To this end, market-based mechanisms, such as an emissions trading scheme (ETS), included in the Paris Agreement can provide an effective incentive for greenhouse gas (GHG) emitting stakeholders to reduce their emissions and help countries achieve their NDCs. A cross-border payment system is essential for the transfer of funds as well as emissions allowances between regulated entities in different countries in a regional emissions trading scheme. The cross-border payment system needs to be secure, fast, efficient, and cost-effective. Notably, the Caribbean region’s current cross-border payment system is based on correspondent banking, and ill-equipped to properly handle cross-country trading in a potent...
This paper examines the genesis and evolution of debt and debt overhang in the Caribbean with ind... more This paper examines the genesis and evolution of debt and debt overhang in the Caribbean with individual case studies, to extract lessons and make broad recommendations with regard to appropriate mechanisms and policy measures that can be implemented to reduce the debt burden of the subregion. The econometric model utilized in the paper has shown that a one percent increase on debt to GDP ratio causes a 0.015decline in real GDP growth for the countries in the Caribbean panel, suggesting that debt has a pernicious effect on growth on Caribbean economies. What is even more worrisome was that Caribbean economies did not demonstrate the traditional non-linear (bell-shaped) effect of debt on growth, where there is a range in which a positive relation between debt and growth exists. Traditionally, as debt increases, so does economic growth, up to a point. After this maximum point is passed, the relationship turns negative, where increases in debt cause a decrease in economic growth. In co...
Oil prices are volatile. They fluctuate due to several demand and supply characteristics. Several... more Oil prices are volatile. They fluctuate due to several demand and supply characteristics. Several macroeconomic factors, may be used to assess the direction of oil prices. However, the data on these variables are often annual, and cannot be used for short term forecasting. As a result, speculators and retail traders often rely upon econometric time series models to produce forecasts. Early models for univariate forecasting include, the Autoregressive Integrated Moving Average (ARIMA), and the Exponential Generalized Autoregressive Conditional Heterscedasticity (EGARCH). These models are often criticized for their linearity. Recent machine learning models have become popular in the forecasting discipline. In fact, the Artificial Neural Network (ANN), and the Wavelet Transform have been increasingly used for forecasting. This study uses the ARIMA, EGARCH, ANN, and Wavelet Transform (Daubechies level 2 order 3)-ARMA models to forecast oil prices. Data on oil prices over the Jan 02, 1986 to June 10, 2019 period is considered. <br>To complement the analysis, fundamental analysis is also used to forecast the direction of oil prices. Surprisingly, the fundamentals, based on the US oil inventories seem to have a higher predictive accuracy than the aforementioned models. <br>
The Global Economic Recession of 2008-2009 had significant negative effects upon Europe. This eve... more The Global Economic Recession of 2008-2009 had significant negative effects upon Europe. This eventually negatively affected the Cariforum region as there was a decline in tourist arrivals, FDI and demand for Caribbean goods. Now that the world economy is starting to show some recovery this study seeks to investigate what the EPA would mean for Cariforum post global recession. Non-tariff barriers such as Sanitary and Phytosanitary Standards, non cumulation of origin in sugar products, and most favored nation tariffs serve as barriers to Cariforum full penetration into the EU market. Cariforum need to find ways to overcome their supply side production constraints and increase their exports to take advantage of their increased market access to earn the necessary revenues to sustain their economies.
The oil price and exchange rate nexus has been examined for many developed countries. However, su... more The oil price and exchange rate nexus has been examined for many developed countries. However, such research is absent for Trinidad and Tobago (T&T) a small, open, oil exporting economy. Several models were fitted from a GARCH and EGARCH perspective to examine the oil price exchange rate nexus for T&T for the time period 4/13/1993 to 30/08/2014. The study found that an increase in oil price causes an appreciation of the T&T dollar. The effect is small and significant. Also, each of the n-step ahead out of sample forecast of the conditional variance of exchange rates was small. This result is not surprising as the Central Bank of T&T operates a managed float of the exchange rate. Thus such management would marginalize the impact of oil prices upon the exchange rate.
Caribbean small island developing states (SIDS) are being disproportionately affected by climate ... more Caribbean small island developing states (SIDS) are being disproportionately affected by climate change. While no country wants to accept legal liability for their emissions, the Caribbean region faces an urgent need to mobilize financing to address loss and damage. This study proposed a voluntary insurance to address the loss and damage from climate change. Voluntary insurance can be used to pool risk across countries and make a payout to cover the loss from extreme weather events. The insurance payout could be parametric, which can eliminate the trouble assessing of losses in indemnity insurance. The key features affecting the trigger for the payout could be the occurrence of the named peril, and meteorological data such as precipitation. The size of the payout would be determined by estimating the loss and damage of Caribbean SIDS from extreme weather events. The premium could be based on solidarity and thus can be the average cost of the total payout per annum. Wavelet coherence...
The objective of this study is to empirically investigate: i) the extent in which shipping costs ... more The objective of this study is to empirically investigate: i) the extent in which shipping costs can cause and predict the food inflation in Trinidad and Tobago (T and T); ii) the extent in which international food prices can drive food inflation in T and T; and iii) the impact of the Russia-Ukraine conflict on food prices in T and T. As a fourth sub-objective, this study seeks to provide policy recommendations to address the food price inflation in T and T. A structural model is sought as it can use information about the past prices of the international food prices and shipping rates to forecast T and T's food price inflation. this study used monthly data on T and T retail price index food subcategory, the FAO Food Price Index (FFPI), and the Freightos Baltic Index over the January 2015 to November 2022 period. the Support Vector Regression (SVR) model was applied and used the FFPI and Freightos Baltic Index as the leading indicators to forecast T and T's food price inflati...
The implementation of the Nationally Determined Contributions (NDCs) is crucial for achieving the... more The implementation of the Nationally Determined Contributions (NDCs) is crucial for achieving the goals of the Paris Agreement. However, the lack of financial support from the international community has been a significant obstacle for the Caribbean Community (CARICOM) Member States. To this end, market-based mechanisms, such as an emissions trading scheme (ETS), included in the Paris Agreement can provide an effective incentive for greenhouse gas (GHG) emitting stakeholders to reduce their emissions and help countries achieve their NDCs. A cross-border payment system is essential for the transfer of funds as well as emissions allowances between regulated entities in different countries in a regional emissions trading scheme. The cross-border payment system needs to be secure, fast, efficient, and cost-effective. Notably, the Caribbean region’s current cross-border payment system is based on correspondent banking, and ill-equipped to properly handle cross-country trading in a potent...
This paper examines the genesis and evolution of debt and debt overhang in the Caribbean with ind... more This paper examines the genesis and evolution of debt and debt overhang in the Caribbean with individual case studies, to extract lessons and make broad recommendations with regard to appropriate mechanisms and policy measures that can be implemented to reduce the debt burden of the subregion. The econometric model utilized in the paper has shown that a one percent increase on debt to GDP ratio causes a 0.015decline in real GDP growth for the countries in the Caribbean panel, suggesting that debt has a pernicious effect on growth on Caribbean economies. What is even more worrisome was that Caribbean economies did not demonstrate the traditional non-linear (bell-shaped) effect of debt on growth, where there is a range in which a positive relation between debt and growth exists. Traditionally, as debt increases, so does economic growth, up to a point. After this maximum point is passed, the relationship turns negative, where increases in debt cause a decrease in economic growth. In co...
Oil prices are volatile. They fluctuate due to several demand and supply characteristics. Several... more Oil prices are volatile. They fluctuate due to several demand and supply characteristics. Several macroeconomic factors, may be used to assess the direction of oil prices. However, the data on these variables are often annual, and cannot be used for short term forecasting. As a result, speculators and retail traders often rely upon econometric time series models to produce forecasts. Early models for univariate forecasting include, the Autoregressive Integrated Moving Average (ARIMA), and the Exponential Generalized Autoregressive Conditional Heterscedasticity (EGARCH). These models are often criticized for their linearity. Recent machine learning models have become popular in the forecasting discipline. In fact, the Artificial Neural Network (ANN), and the Wavelet Transform have been increasingly used for forecasting. This study uses the ARIMA, EGARCH, ANN, and Wavelet Transform (Daubechies level 2 order 3)-ARMA models to forecast oil prices. Data on oil prices over the Jan 02, 1986 to June 10, 2019 period is considered. <br>To complement the analysis, fundamental analysis is also used to forecast the direction of oil prices. Surprisingly, the fundamentals, based on the US oil inventories seem to have a higher predictive accuracy than the aforementioned models. <br>
The Global Economic Recession of 2008-2009 had significant negative effects upon Europe. This eve... more The Global Economic Recession of 2008-2009 had significant negative effects upon Europe. This eventually negatively affected the Cariforum region as there was a decline in tourist arrivals, FDI and demand for Caribbean goods. Now that the world economy is starting to show some recovery this study seeks to investigate what the EPA would mean for Cariforum post global recession. Non-tariff barriers such as Sanitary and Phytosanitary Standards, non cumulation of origin in sugar products, and most favored nation tariffs serve as barriers to Cariforum full penetration into the EU market. Cariforum need to find ways to overcome their supply side production constraints and increase their exports to take advantage of their increased market access to earn the necessary revenues to sustain their economies.
The oil price and exchange rate nexus has been examined for many developed countries. However, su... more The oil price and exchange rate nexus has been examined for many developed countries. However, such research is absent for Trinidad and Tobago (T&T) a small, open, oil exporting economy. Several models were fitted from a GARCH and EGARCH perspective to examine the oil price exchange rate nexus for T&T for the time period 4/13/1993 to 30/08/2014. The study found that an increase in oil price causes an appreciation of the T&T dollar. The effect is small and significant. Also, each of the n-step ahead out of sample forecast of the conditional variance of exchange rates was small. This result is not surprising as the Central Bank of T&T operates a managed float of the exchange rate. Thus such management would marginalize the impact of oil prices upon the exchange rate.
Oil prices are volatile. They fluctuate due to several demand and supply characteristics. Several... more Oil prices are volatile. They fluctuate due to several demand and supply characteristics. Several macroeconomic factors, may be used to assess the direction of oil prices. However, the data on these variables are often annual, and cannot be used for short term forecasting. As a result, speculators and retail traders often rely upon econometric time series models to produce forecasts. Early models for univariate forecasting include, the Autoregressive Integrated Moving Average (ARIMA), and the Exponential Generalized Autoregressive Conditional Heterscedasticity (EGARCH). These models are often criticized for their linearity. Recent machine learning models have become popular in the forecasting discipline. In fact, the Artificial Neural Network (ANN), and the Wavelet Transform have been increasingly used for forecasting. This study uses the ARIMA, EGARCH, ANN, and Wavelet Transform (Daubechies level 2 order 3)-ARMA models to forecast oil prices. Data on oil prices over the Jan 02, 1986 to June 10, 2019 period is considered. To complement the analysis, fundamental analysis is also used to forecast the direction of oil prices. Surprisingly, the fundamentals, based on the US oil inventories seem to have a higher predictive accuracy than the aforementioned models.
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To complement the analysis, fundamental analysis is also used to forecast the direction of oil prices. Surprisingly, the fundamentals, based on the US oil inventories seem to have a higher predictive accuracy than the aforementioned models.