The Pacific Speed of Growth : How Fast Can It Be and What Determines It?

Author/Editor: Yongzheng Yang ; Hong Chen ; Shiu raj Singh ; Baljeet Singh
Publication Date: May 09, 2013
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This study aims to test within a relatively homogeneous group of small states what differentiates the growth performance of Pacific island countries (PICs) from their peers. We find that PICs are disadvantaged by distance and hampered by lower investment and exports compared with other small island states, but greater political stability, catch-up effects from lower initial incomes, and slower population growth have helped offset some of these disadvantages. On balance, policy-related factors, together with geography-related disadvantages, have led to growth rates in PICs that are much lower than in other small states. We also examine how real exchange rate appreciation, unfavorable developments in the external trade environment, and rising international transport costs may have contributed to PICs’ slower growth over the past decade.
Series: Working Paper No. 13/104
Subject(s): Economic growth | Pacific Island Countries | Investment | Exports | Small states | Economic models

Publication Date: May 09, 2013
ISBN/ISSN: 9781484399040/1018-5941 Format: Paper
Stock No: WPIEA2013104 Pages: 44
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