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Caribbean Bananas: The Macroeconomic Impact of Trade Preference Erosion

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Author Info

  • Paul Cashin
  • Montfort Mlachila
  • Cleary Haines

Abstract

This paper examines the macroeconomic effects of the erosion of trade preferences, with a focus on the export of Caribbean bananas to Europe. Estimates are made of the magnitude of implicit assistance provided over a period of three decades to eastern Caribbean countries through banana trade preferences. The value of such assistance rose until the early 1990s, and has declined precipitously since then. Using vector autoregressive analysis, the paper finds that changes in the level of implicit assistance have had a considerable macroeconomic impact, especially on Caribbean real GDP growth.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 10/59.

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Length: 42
Date of creation: 01 Mar 2010
Date of revision:
Handle: RePEc:imf:imfwpa:10/59

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Related research

Keywords: Bananas; Agricultural exports; Agricultural production; Economic models; Export prices; Terms of trade; Trade policy; Trade preferences;

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