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Caribbean bananas: The macroeconomic impact of trade preference erosion

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  • Montfort Mlachila
  • Paul Cashin
  • Cleary Haines

Abstract

This article 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 article finds that changes in the level of implicit assistance have had a considerable macroeconomic impact, especially on Caribbean real gross domestic product growth.

Suggested Citation

  • Montfort Mlachila & Paul Cashin & Cleary Haines, 2013. "Caribbean bananas: The macroeconomic impact of trade preference erosion," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(2), pages 253-280, March.
    • Handle: RePEc:taf:jitecd:v:22:y:2013:i:2:p:253-280
    DOI: 10.1080/09638199.2011.552114
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    1. repec:wbk:wbpubs:7464 is not listed on IDEAS
    2. International Monetary Fund, 2008. "Eastern Caribbean Currency Union: Selected Issues," IMF Staff Country Reports 2008/096, International Monetary Fund.
    3. Aksoy, M. Ataman & Beghin, John C., 2005. "Global Agricultural Trade and Developing Countries," Staff General Research Papers Archive 12228, Iowa State University, Department of Economics.
    4. Deaton, Angus & Miller, Ron, 1996. "International Commodity Prices, Macroeconomic Performance and Politics in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 5(3), pages 99-191, October.
    5. repec:wbk:wbpubs:6889 is not listed on IDEAS
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    Cited by:

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    3. Espinoza, Raphael & Prasad, Ananthakrishnan & Williams, Oral, 2011. "Regional financial integration in the GCC," Emerging Markets Review, Elsevier, vol. 12(4), pages 354-370.
    4. Ms. Nita Thacker & Mr. Sebastian Acevedo Mejia & Mr. Roberto Perrelli, 2012. "Caribbean Growth in an International Perspective: The Role of Tourism and Size," IMF Working Papers 2012/235, International Monetary Fund.
    5. Goohoon Kwon & Mr. Raphael A Espinoza, 2009. "Regional Financial Integration in the Caribbean: Evidence From Financial and Macroeconomic Data," IMF Working Papers 2009/139, International Monetary Fund.
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    7. Samuel Bazzi & Christopher Blattman, 2014. "Economic Shocks and Conflict: Evidence from Commodity Prices," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 1-38, October.

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