RECENT-EVIDENCE ON THE DETERMINANTS OF INFLATION IN A TOURISM-ORIENTED ECONOMY - BARBADOS

This paper employs quarterly data to examine the determinants of inflation in the tourism-dependent economy of Barbados during the 1980s. It appears that demand-side effects such as the level of real tourism activity, along with supply-side effects such as the levels of imported inflation and interest rates, were important determinants of inflation during the period under consideration. In addition, the findings reveal strong, seasonal patterns to inflation, the latter suggesting that domestic prices were impacted by institutional processes such as the government's annual budget.