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Investigating the Relationship between Residential Construction and Economic Growth in a Small Developing Country: The Case of Barbados


  • Mahalia Jackman

    (Central Bank of Barbados, Tom Adams Financial Centre)


With the ongoing global financial crisis ¡V which began with the collapse of the US sub-prime market in 2007 ¡V the Barbadian economy is expected to contract in 2009. As a means of stimulating economic activity and providing job opportunities, the government has committed itself to completing 572 houses during the 2009/10 financial year. However, the arguments in favour of allocating more resources to residential construction have not been based on the existence of empirical analyses. This paper empirically investigates the relationship between residential construction and economic growth for Barbados. The historical data suggests that there is bi-directional causality between economic growth and residential construction. Hence, a policy that stimulates the housing market may boost economic activity.

Suggested Citation

  • Mahalia Jackman, 2010. "Investigating the Relationship between Residential Construction and Economic Growth in a Small Developing Country: The Case of Barbados," International Real Estate Review, Asian Real Estate Society, vol. 13(1), pages 109-116.
  • Handle: RePEc:ire:issued:v:13:n:01:2010:p:109-116

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    References listed on IDEAS

    1. Jim Clayton & Norman Miller & Liang Peng, 2010. "Price-volume Correlation in the Housing Market: Causality and Co-movements," The Journal of Real Estate Finance and Economics, Springer, vol. 40(1), pages 14-40, January.
    2. Tsong-Yue Lai & Ko Wang, 1998. "Appraisal Smoothing: The Other Side of the Story," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(3), pages 511-535.
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    Cited by:

    1. Su Han Chan & Ko Wang & Jing Yang, 2016. "The Pricing of Construction Loans," International Real Estate Review, Asian Real Estate Society, vol. 19(4), pages 411-434.
    2. Erol, Isil & Unal, Umut, 2015. "Role of Construction Sector in Economic Growth: New Evidence from Turkey," MPRA Paper 68263, University Library of Munich, Germany.
    3. repec:ibn:ijefaa:v:9:y:2017:i:8:p:221-228 is not listed on IDEAS

    More about this item


    Residential construction; Growth; Granger causality; Barbados;

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services


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