Bastos, FabianoAngelo Divino, Jose2012-03-192012-03-192009-09-01https://hdl.handle.net/10986/4256The authors estimate a VAR and compute generalized impulse response to analyze the joint dynamics of four key macroeconomic variables in the small open economy of Mauritius. Results suggest that nominal exchange rate and interest rate have limited ability to impact output growth over the medium-run. Large error bands hinder analysis of the inflation output trade-off, but evidence points to a weak relationship in the short run as well. These findings are used to shed some light into the policy response to the current worldwide economic slowdown affecting Mauritius.CC BY 3.0 IGOACCOUNTINGAGGREGATE DEMANDBANK POLICYBANKING SECTORBASIS POINTCAPITAL ACCOUNTCAPITAL ACCOUNTSCAPITAL BASECENTRAL BANKCOMMODITYCOMPETITIVENESSCONSUMER PRICE INDEXCOVARIANCE MATRIXCURRENCYDEPRECIATIONDEVALUATIONDEVALUATIONSDISTORTIONSDOMESTIC CAPITALDOMESTIC ECONOMYDOMESTIC MARKETSDOMESTIC PRICESDUMMY VARIABLEDUMMY VARIABLESECONOMETRICSECONOMIC CRISISECONOMIC DOWNTURNECONOMIC ENVIRONMENTECONOMIC PERFORMANCEECONOMIC SLOWDOWNEQUILIBRIUM CONDITIONSEXCHANGE RATEEXCHANGE RATE DEVALUATIONEXCHANGE RATE DEVALUATIONSEXCHANGE RATE FLUCTUATIONSEXCHANGE RATE SHOCKSEXCHANGE RATESEXCHANGE-RATEEXOGENOUS VARIABLEEXOGENOUS VARIABLESEXPORT MARKETSEXPORT PERFORMANCEEXPORT SECTOREXPORTSEXTERNAL DEMANDEXTERNAL EQUILIBRIUMFINANCIAL MARKETSFISCAL STIMULUSGDPGDP DEFLATORGDP PER CAPITAGROWTH POTENTIALHUMAN CAPITALIMPORTINFLATIONINFLATION RATEINFLATIONARY PRESSUREINFLATIONARY PRESSURESINFRASTRUCTURE INVESTMENTINTEREST RATEINTEREST RATESINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL CAPITAL MARKETSINTERNATIONAL PRICEINTERNATIONAL TRADELIQUIDITYMACROECONOMIC MANAGEMENTMACROECONOMIC POLICYMACROECONOMIC VARIABLESMACROECONOMICSMARKET FORCESMONETARY ECONOMICSMONETARY POLICIESMONETARY POLICYMONETARY TRANSMISSIONMULTIPLE POLICYNEGATIVE SHOCKSNOMINAL DEPRECIATIONNOMINAL EXCHANGE RATENOMINAL EXCHANGE RATESNOMINAL INTEREST RATEOIL PRICEOIL PRICESOPEN ECONOMYOUTPUTPOLICY RESPONSEPORTFOLIOPOVERTY REDUCTIONPREFERENTIAL MARKET ACCESSPRICE LEVELSPRIVATE SECTOR DEVELOPMENTPUBLIC SECTORREAL EXCHANGE RATEREAL EXCHANGE RATESRECESSIONREGULATORY ENVIRONMENTREJECTIONSSOCIAL COSTSSTANDARD DEVIATIONSTRADINGTRADING PARTNERSTRANSMISSION MECHANISMVALUE ADDEDWorld Bank10.1596/1813-9450-5065