Theories of central banking and money in open economies: Caribbean contributions and the debate on contractionary devaluations: the case of Jamaica

This paper shows that Caribbean economists developed a distinctive structural account of contractionary devaluation in the decade before Krugman and Taylor’s (1978) canonical formalisation. Analysing the 1967 sterling crisis, scholars including Lloyd Best, George Beckford, Norman Girvan and participants in the Regional Programme of Monetary Studies identified the redistributive, imported-input and fiscal mechanisms through which devaluation contracts output in plantation economies. Grounded in historical analysis of structural dependence rather than abstract small-economy assumptions, Caribbean scholarship treated contractionary effects as persistent conditions reproduced by the organisation of production and ownership, rather than as contingent parameter values. Yet this literature is absent from the canonical genealogy of the field, an omission that this paper relates to the geography of theoretical authority in post-war economics. Jamaica’s 1976–1980 crisis is closely consistent with the Caribbean analysis and illustrates the cost of that omission: repeated policy failures across the developing world applying orthodox frameworks to economies whose structure the frameworks did not describe. Recovering this intellectual genealogy matters for both the history of economic thought and contemporary policy design.