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Guyana; Why Has Growth Stopped? An Empirical Study on the Stagnation of Economic Growth


  • Judith Gold
  • Ruben V Atoyan
  • Cornelia Staritz


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.

Suggested Citation

  • Judith Gold & Ruben V Atoyan & Cornelia Staritz, 2007. "Guyana; Why Has Growth Stopped? An Empirical Study on the Stagnation of Economic Growth," IMF Working Papers 07/86, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:07/86

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    References listed on IDEAS

    1. Juan Zalduendo & Catia Batista, 2004. "Can the IMF's Medium-Term Growth Projections Be Improved?," IMF Working Papers 04/203, International Monetary Fund.
    2. Saleh M. Nsouli & Ruben V Atoyan & Alex Mourmouras, 2004. "Institutions, Program Implementation, and Macroeconomic Performance," IMF Working Papers 04/184, International Monetary Fund.
    3. Ratna Sahay, 2005. "Stabilization, Debt, and Fiscal Policy in the Caribbean," IMF Working Papers 05/26, International Monetary Fund.
    4. Abdelhak Senhadji, 2000. "Sources of Economic Growth: An Extensive Growth Accounting Exercise," IMF Staff Papers, Palgrave Macmillan, vol. 47(1), pages 1-6.
    5. Prachi Mishra, 2006. "Emigration and Brain Drain; Evidence From the Caribbean," IMF Working Papers 06/25, International Monetary Fund.
    6. William Carrington & Enrica Detragiache, 1998. "How Big is the Brain Drain?," IMF Working Papers 98/102, International Monetary Fund.
    7. Ebrima A Faal, 2003. "Currency Demand, the Underground Economy, and, Tax Evasion—The Case of Guyana," IMF Working Papers 03/7, International Monetary Fund.
    8. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    9. 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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    Cited by:

    1. Khemraj, Tarron, 2007. "The missing link: the finance-growth nexus and the Guyanese growth stagnation," MPRA Paper 16342, University Library of Munich, Germany.
    2. Khemraj, Tarron & Hinova, Diana, 2011. "Elected Oligarchy and Economic Underdevelopment: The Case of Guyana," MPRA Paper 29733, University Library of Munich, Germany.


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