Caribbean Growth in an International Perspective: The Role of Tourism and Size

36 Pages Posted: 1 Nov 2012

See all articles by Nita Thacker

Nita Thacker

affiliation not provided to SSRN

Roberto Perrelli

International Monetary Fund (IMF)

Date Written: September 2012

Abstract

After earlier success, growth performance in most Caribbean countries has been disappointing since the early 1990s. With slower growth, output has fallen behind that of relevant comparator countries. This paper analyzes the growth experience of the Caribbean countries from a cross country perspective. Three findings stand out. First, the slowdown in growth is explained more by a decline in productivity rather than a lack of investment. Second, tourism has been a significant contributor to higher growth (through both capital accumulation and productivity) and lower output volatility, and in many countries there is scope for further expansion of this sector. Third, the small size and the fact that most of these countries are islands have limited growth. Policies aimed at improving productivity, further development of the tourism sector, and regional integration could pay dividends in terms of higher growth in the region.

Keywords: Capital accumulation, Caribbean, Cross country analysis, Economic growth, Productivity, Tourism, Caribbean, tourism, size, growth, productivity.

JEL Classification: C33, O40, O54

Suggested Citation

Thacker, Nita and Perrelli, Roberto, Caribbean Growth in an International Perspective: The Role of Tourism and Size (September 2012). IMF Working Paper No. 12/235, Available at SSRN: https://ssrn.com/abstract=2169778

Nita Thacker (Contact Author)

affiliation not provided to SSRN

No Address Available

Roberto Perrelli

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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