Objective :The global financial crisis and the attendant Great Recession of 2007-2009 have spawned a full-scale re-examination on the effectiveness of fiscal policy throughout the world. While this has led to a plethora of analyses in the case of developing countries, the same abundance of the work has not been evident for developing counties. This papers uses vector autoregressive time-series analysis techniques to examine the fiscal policy decisions and its impacts in the case of three microstates: Barbados, Trinidad and Tobago and Jamaica. While having similar degrees of openness these states differ in debt burdens and economic structures thus providing a natural laboratory on which one can examine the impact of fiscal policy.
Expected Results: Thus, this paper evaluates the effectiveness and limitations of the fiscal policies undertaken by these countries in response to the global recession.