incorporate into practical guidance for policy. our academic research needs to be in depth and grounded in caribbean realities. that requires deep understanding of the theory, careful observation of caribbean experience and economic behaviour, and painstaking analysis of the data. you also need to read widely on the topic, and set aside time for thoughtful reflection, as you proceed with the research. the reward will be genuine insight and useful contributions to our understanding of how our economies work. if i have a criticism of much of economic research in the caribbean nowadays, it is that it is too derivative, an unthinking application of imported theories and methodologies to caribbean data, often accompanied by econometric pyrotechnics which anyone with mathematical training can very easily see through. at the end of the day this kind of research leaves the policy maker with little guidance, and the general public puzzled and apprehensive. there is a need, in barbados, in the caribbean, and indeed in the wider world, for economics that people can understand. the economy is no more than a convenient way of thinking about all the commercial transactions that take place in the national space in the course of a day or a month or a year. the varying nature of these transactions, and the relationship between them, are mind - bendingly complex, and the economic theories we offer in explanation are pitifully oversimplistic by comparison. good economics consists of essaying a theory that seems to fit the circumstance under investigation, observing the outcome, making adjustments, and repeating. it is a process that of necessity involves the people who are doing the transactions that produce the observed result. if they are mystified about what you ’ re doing and why, chances are you will not get the expected result. that is why it is always most effective to end with economics that people can understand, whatever your theoretical starting point. here at central bank we do academic research to deepen our understanding of economic processes, but it is always with a view to coming up with better policies and prescriptions, whether it is with respect to taxation, fiscal policy, tourism development strategy, import substitution or the many other burning issues that we must address from time to time. bis central bankers ’ speeches

those fabrics of hers to her heart ’ s content ; holland her chambrays ; florence her cloth ; the indies their beaver and vicuna ; milan her brocades : italy and flanders their linen, so long as our capital can enjoy them. the only thing it proves is that all nations train journeymen for madrid and that madrid is the queen of parliaments, for the world serves her and she serves nobody. ” see report no. 25 ( 1973 – 74 ) to the storting : “ petroleumsvirksomhetens plass i det norske samfunn ” [ the role of petroleum activity in norwegian society ]. the paradox of plenty. oil booms and petro - states by terry lynn karl ( 1997 ) provides a good overview of oil nations ’ problems. from time to time, i meet representatives of the diplomatic corps in norway. they seldom fail to mention the high cost level in norway and their bewilderment over aspects of our way of life. a 17th century moroccan ambassador was even more critical in his account of the wealthiest nation at that time : “ … the spanish nation today possesses the greatest wealth and the largest income of all christians. but the love of luxury and the comforts of civilization have overcome them, and you will rarely find one of this nation who engages in trade or travels abroad for commerce as do the other christian nations [ … ]. similarly, the handicrafts practiced by the lower classes and common people are despised by this nation, which regards itself as superior to other christian nations. most of those who practice these crafts in spain are frenchmen [ who ] flock to spain to look for work … [ and ] in a short time make great fortunes. ” see chart “ petroleum production ” at the end of the speech. the oil age in norway has now spanned about 40 years and there are prospects that it will continue for some time ahead. we will most likely still be producing petroleum in 40 years ’ time, but oil production has declined in recent years after peaking in 2000. gas production is rising, but not at a pace sufficient to sustain overall petroleum production. the idea of an oil fund was raised in the beginning of the 1980s 3. it was intended to be a buffer fund to smooth variations in government oil revenues. the act relating to the government petroleum fund was adopted in 1990 in the midst of the deepest economic downturn in norway since the second world war. those at the ministry of finance working on the law