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Caribbean Growth in an International Perspective; The Role of Tourism and Size

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  • Nita Thacker
  • Sebastian Acevedo Mejia
  • Roberto Perrelli

Abstract

After earlier success, growth performance in most Caribbean countries has been disappointing since the early 1990s. With slower growth, output has fallen behind that of relevant comparator countries. This paper analyzes the growth experience of the Caribbean countries from a cross country perspective. Three findings stand out. First, the slowdown in growth is explained more by a decline in productivity rather than a lack of investment. Second, tourism has been a significant contributor to higher growth (through both capital accumulation and productivity) and lower output volatility, and in many countries there is scope for further expansion of this sector. Third, the small size and the fact that most of these countries are islands have limited growth. Policies aimed at improving productivity, further development of the tourism sector, and regional integration could pay dividends in terms of higher growth in the region.

Suggested Citation

  • Nita Thacker & Sebastian Acevedo Mejia & Roberto Perrelli, 2012. "Caribbean Growth in an International Perspective; The Role of Tourism and Size," IMF Working Papers 12/235, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:12/235
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    References listed on IDEAS

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    Cited by:

    1. International Monetary Fund, 2014. "Republic of Palau; Selected Issues," IMF Staff Country Reports 14/111, International Monetary Fund.

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