Macroeconomic performance and external shocks on small, open economies: The Caribbean experience

Journal of Developing Areas

Volumn 30, Issue 3, 1996, Pages 341-360

  Gafar, John ^a  

^a LONG ISLAND UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EXTERNAL SHOCK; INTEREST RATE; MACROECONOMIC PERFORMANCE; TERMS OF TRADE; TRADE POLICY;

CARIBBEAN;

EID: 0030424067     PISSN: 0022037X     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (41)

1. For an excellent discussion of this point see Amartya K. Sen, "Development: Which Way Now? Economic Journal 93 (December 1993): 745-62.
2. See United Nations Development Programme (UNDP), Human Development Report 1990 (New York: Oxford University Press for the UNDP, 1990), p. 10, box 1-1.
3. An excellent exposition is contained in the World Bank's Caribbean Region: Current Economic Situation. Regional Issues, and Capital Flows, 1992 (Washington, DC: World Bank, 1993), pp. 56-57. This paper draws freely from the World Bank publications cited in this study.
4. The reader is referred to Michael P. Todaro, Economic Development, 5th ed. (New York: Longman, 1994), p. 195, fig. 6.9.
5. World Bank, Caribbean Region: Current Economic Situation, p. 56.
6. John Gafar, "The Performance of Agriculture in a Developing Country: Jamaica 1960-1970," Trinidad and Tobago, Central Statistical Office (CSO), Research Papers, no. 12 (CSO, 1983), pp. 34-48.
7. Clive Y. Thomas, "Lessons from Experience: Structural Adjustment and Poverty in Guyana," Social and Economic Studies 42 (December 1993): 133-84.
8. See World Bank, Guyana: From Economic Recovery to Sustained Growth (Washington, DC: World Bank, 1993), p. 73. This publication contains an excellent review of the performance of the economy of Guyana.
9. Guyana: Ibid., pp. 73-80.
10. Ralph Henry, "A Note on Income Distribution and Poverty in Trinidad and Tobago," Trinidad and Tobago, CSO, Research Papers, no. 8 (CSO, 1975), pp. 1-29.
11. World Bank, Caribbean Region: Current Economic Situation, p. 54.
12. World Bank, Guyana: From Economic Recovery to Sustained Growth, pp. xi-xvi.
13. See Federal Research Division, Library of Congress, Guyana and Belize Country Studies, ed. Tim Merril (Washington, DC: Headquarters, Department of Army, 1993). The study finds that "the PNC [People's National Congress] held power from independence in 1966 until 1992 by manipulation of the electoral process and racial politics" (p. xxxii). It observes that "the 1973 elections were considered the most undemocratic in Guyana's history, and by 1974 all organs of the state had become agencies of the ruling PNC. The economy, which had grown immediately after independence, began to contract because of nationalization" (p. xx).
14. A New York Times article entitled "A Kennedy-C.I.A. Plot Returns to Haunt Clinton: Guyana Episode Derails an Envoy," Sunday, 30 October 1994, states that for "20 years the country was governed by Forbes Burnham, . . . an opportunist, racist and demagogue intent only on personal power. . . , [who] held power through force and fraud until his death in 1985" (p. 10).
15. World Bank, World Development Report 1991 (New York: Oxford University Press, 1991), p. 138.
16. See World Bank, Caribbean Region: Current Economic Situation, p. 116.
17. For a discussion of this see John Gafar, "Economic Growth and Economic Policy: Employment and Unemployment in Jamaica, 1972-1984," Journal of Developing Areas 23 (October 1988): 63-84.
18. World Bank, Caribbean Region: Current Economic Situation, p. 122.
19. United Nations Development Programme (UNDP), Human Development Report 1993 (New York: Oxford University Press for the UNDP, 1993), p. 144.
20. See World Bank, Guyana: Public Sector Review (Washington, DC: World Bank, 1993) p. 222.
21. See World Bank, Caribbean Region: Current Economic Situation, p. 110.
22. See John Gafar, "Price Responsiveness of Tropical Agricultural Exports: A Case Study of Jamaica, 1954-1972, Developing Economies 18 (September 1980): 288-97;
23. See John Gafar, idem, "The Supply Response for Sugar Cane in Trinidad and Tobago: Some Preliminary Results," Applied Economics 19 (September 1987): 1221-31.
24. John Gafar, "Employment and Output Functions for Trinidad and Tobago Manufacturing Industries," Singapore Economic Review 34 (October 1989): 78-88.
25. See Ramesh Ramsaran, "Growth, Employment, and the Standard of Living in Selected Commonwealth Caribbean Countries," Caribbean Studies 25, nos. 3-4 (1992): 103-22.
26. World Bank, Caribbean Region: Current Economic Situation, p. 59.
27. For details see John Gafar, "Unemployment and Underemployment in Jamaica, 1972-1978," International Labour Review 119 (November-December 1980): 773-84.
28. For a discussion see Ian M. D. Little, Richard N. Cooper, W. Max Corden, Sarath Rajapatirana, Boom, Crisis, and Adjustment: The Macroeconomic Experience of Developing Countries (Washington, DC: World Bank, 1993), p. 154.
29. World Bank, World Development Report 1989 (New York, Oxford: Oxford University Press for the World Bank, 1989), p. 63.
30. See Gafar, "Economic Growth and Economic Policy," p. 70, for a discussion and the econometric evidence.
31. International Monetary Fund (IMF), External Indebtedness of Developing Countries, Occasional Paper No. 3 (Washington, DC: IMF, 1981).
32. For an excellent discussion of external shocks and policy responses see Paul R. Krugman, "External Shocks and Domestic Policy Responses," in The Open Economy: Tools for Policymakers in Developing Countries, ed. Rudiger Dornbusch and F. Leslie C. H. Helmers (New York: Oxford University Press for the World Bank, 1988). Much of my discussion of external shocks is taken from Krugman.
33. Inter-American Development Bank, Annual Report 1990 (Baltimore, MD: Johns Hopkins University Press, 1990), p. 141.
34. See Rudiger Dornbusch, "Balance of Payments Issues," in Open Economy, ed. Dornbusch and Helmers.
35. See Jeffrey D. Sachs, "External Debt and Macroeconomic Performance in Latin America and East Asia," Brookings Papers on Economic Activity, no. 2 (1985): 523-66.
36. John Gafar, "Recent Trends in the Terms of Trade of Jamaica: 1955-86," Applied Economics 27 (February 1995): 161-65, provides an analysis of the costs of TOT changes. This paper uses modern time-series techniques, viz., unit roots, to examine the Prebisch-Singer hypothesis.
37. Little et al., Boom, Crisis, and Adjustment.
38. See Michael Gavin and Ricardo Hausmana, "Macroeconomic Dimensions of Banking Crises," Development Policy, Inter-American Development Bank Newsletter (December 1995).
39. See Jeffrey D. Sachs, "Introduction," p. 10, in Developing Country Debt and Economic Performance, ed. idem (Chicago, IL: National Bureau of Economic Research, University of Chicago Press, 1990).
40. John Gafar, "Some Estimates of the Price and Income Elasticities of Import Demand for Three Caribbean Countries," Applied Economics 27 (November 1995): 1045-48.
41. Inter-American Development Bank, Economic and Social Progress in Latin America, 1993 Report (Baltimore, MD: Johns Hopkins University Press, 1993), p. 122.