Trade and Economic Development in Small Open Economies: The Case of the Caribbean Countries

The overall economic performance of Caribbean countries has declined markedly in recent times. The weak export performance of these trade-oriented economies is highlighted as the principal factor responsible for the economic deterioration. The author attempts to identify the major determinants of their export performance. Two alternative approaches to this issue are adopted, the Feder model and an alternate, which suggests the important nexus between foreign exchange, needed imports and exports. The role of government institutions and their influence on exchange rates are also analyzed. Scholars in economic development, Latin America, as well as international financial institutions will find this comprehensive study on the English speaking Caribbean countries of Jamaica, Trinidad and Tobago, and Barbados a useful tool.

Table of Contents:
Acknowledgments Introduction The Importance of Trade The Key Issues Outline Notes The Caribbean's Export Performance Review of the Export Performance Descriptive Analysis of the Export Performance A Constant Market Share Analysis Revealed Comparative Advantage Data and Results Data Results An Assessment of the Results Notes Appendix 2.A.1: Derivation of the CMS Model Appendix 2.A.2: Commodities and Markets for CMS Analysis "Incentives" and Institutional Support for Exports Policies Aimed at Achieving Neutral Incentives "Incentives" and Real Effective Exchange Rates Instruments of Export Development Policy in CARICOM Countries Notes Appendix 3.A.1: A Typical Export Inventive System Appendix 3.A.2: Plots of Real Effective Exchange Rates for Selected CARICOM Countries Exports and Small Country Growth Feder's Model Applied to Small Developing Countries Data and Results Output and Foreign Exchange Flows Data and Results Notes Appendix 4.A.1: Derivation of Feder's Model Appendix 4.A.2: The List of Small Countries and the Dataset Appendix 4.A.3: Test for Heteroscedasticity Appendix 4.A.4: Production Functions Determinants of the Caribbean's Export Performance Model of Export Supply: Theoretical Discussion Model Specification Nontraditional Exports U.S. Clothing Market Industry-Specific Export Equation: Clothing Industry-Specific Export Equation: Miscellaneous Manufactures Aggregate Export Notes Appendix 5.A.1: The Imperfect Substitutes Modes Appendix 5.A.2: Derivation of Capital Stock Estimates Appendix 5.A.3: Plots of Clothing Exports to the U.S. Market-Selected Countries (1968-88) The Regional Dimension Modelling the Export Sector Institutional Analysis notes Future Directions for Research Bibliography Index

About the Author :
ARNOLD MEREDITH McINTYRE is an active researcher on trade and development policy issues in the CARICOM region. Recently, he was a country economist at the Caribbean Development Bank and presently, holds the position of Chief (Trade & Economic Policy) at the Economic Affairs Secretariat of the Organization of Eastern Caribbean States.