Guyana; Why Has Growth Stopped? An Empirical Study on the Stagnation of Economic Growth
After a period of exceptionally strong economic performance, Guyana's growth has stagnated since 1998. The paper tries to identify the factors that can explain this dramatic deterioration in economic performance. The paper first attempts to explain the decline of growth with a growth accounting exercise which shows that there was a significant swing in total factor productivity, and than uses a panel regression framework to analyze the growth impact of changes in various factors. Finally, through a series of cross-country exercises, the paper shows that the primary reasons for the divergence between the economic performance of Guyana and other Caribbean, HIPC, and PRGF-eligible countries in 1998-2004 are a substantial decline in share of net foreign and private domestic investment in GDP, a decline in the labor force, and a less favorable political and institutional environment.
|Date of creation:||01 Apr 2007|
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References listed on IDEAS
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- Abdelhak Senhadji, 2000. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 6.
- Saleh M. Nsouli & Ruben Atoyan & Alex Mourmouras, 2004. "Institutions, Program Implementation, and Macroeconomic Performance," IMF Working Papers 04/184, International Monetary Fund.
- Juan Zalduendo & Catia Batista, 2004. "Can the IMF's Medium-Term Growth Projections Be Improved?," IMF Working Papers 04/203, International Monetary Fund.
- Manuel Arellano & Stephen Bond, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
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Oxford University Press, vol. 58(2), pages 277-297.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- William Carrington & Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 98/102, International Monetary Fund.
- Ratna Sahay, 2005. "Stabilization, Debt, and Fiscal Policy in the Caribbean," IMF Working Papers 05/26, International Monetary Fund.
- Ebrima Faal, 2003. "Currency Demand, the Underground Economy, and, Tax Evasionâ€”The Case of Guyana," IMF Working Papers 03/7, International Monetary Fund.
- Prachi Mishra, 2006. "Emigration and Brain Drain; Evidence From the Caribbean," IMF Working Papers 06/25, International Monetary Fund.
- Khan, Mohsin S & Kumar, Manmohan S, 1997. "Public and Private Investment and the Growth Process in Developing Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(1), pages 69-88, February.
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