In the Caribbean, that option is not available, because we produce only a handful of consumption items competitively, and most of those would become more expensive with currency depreciation, because of their import content. The Caribbean policy maker has only one option for reducing spending on foreign exchange, and that is to reduce spending on everything.
To stabilise these small open economies one has to cut expenditure in the aggregate. 2  BIS central bankers’ speeches  The tools available to reduce aggregate spending are all fiscal, and what is needed, in the end, is a reduction in the fiscal deficit. Most of us, even those who remain wedded to conventional economic analysis, will be in sympathy with this conclusion.