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Sectoral Output, Growth And Economic Linkages In The Barbados Economy Over The Past Five Decades

  • Roland CRAIGWELL
  • Darrin DOWNES



Using multivariate cointegration analysis, this paper investigates the long run and short-run relationships between the agriculture, industry and service sectors for Barbados over the past five decades. Sectoral real output is analysed in two sub-periods: 1946 to 1969 and the years 1970-2003. The reason for splitting the sample is to investigate whether the commonly held view that a structural transformation from an economy dominated by agriculture to one that is predominantly service-oriented was reflected in the data. One cointegrating relationship is found in both sub-periods. The results suggest that for the earlier period, increases in industrial output (services output) were associated with lower (higher) agricultural GDP over the long run. In the short run, only changes in industrial output promoted growth in agricultural output. In the latter period, an expansion in services output was found to be the only determinant of industrial output in both the short and long run, as agricultural output did not appear to have any statistically significant impact in either timeframe.

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Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 8 (2008)
Issue (Month): 2 ()
Pages: 123-136

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Handle: RePEc:eaa:aeinde:v:8:y:2008:i:2_10
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  1. Davidson, James E H, et al, 1978. "Econometric Modelling of the Aggregate Time-Series Relationship between Consumers' Expenditure and Income in the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(352), pages 661-92, December.
  2. Norman Gemmell, & Tim Lloyd, & Marina Mathew, . "Dynamic Sectoral Linkages and Structural Change in a Developing Economy," Discussion Papers 98/3, University of Nottingham, CREDIT.
  3. Saikkonen, Pentti & L├╝tkepohl, Helmut, 1999. "Testing for a unit root in a time series with a level shift at unknown time," SFB 373 Discussion Papers 1999,72, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  4. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  5. Blunch, Niels-Hugo & Verner, Dorte, 1999. "Sector growth and the dual economy model - evidence from Cote d'Ivoire, Ghana, and Zimbabwe," Policy Research Working Paper Series 2175, The World Bank.
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