Mind the Gaps: Caribbean Trade Patterns and the Connectivity Constraint

IMF Working Papers, May 15, 2026

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Canonical URL: Mind the Gaps: Caribbean Trade Patterns and the Connectivity Constraint

Authors: JaeBin Ahn, Nalisa Marieatte, Philipp-Leo Mengel, David Moore, Josefine Quast, Qingyu Tao, Hou Wang
Published: May 15, 2026
Series: IMF Working Papers
DOI: https://doi.org/10.5089/9798229045285.001

Paper analyzes trade patterns across the Caribbean Community (CARICOM)—15 Caribbean countries.
Methodological approach: unified empirical assessment using a consistent gravity-model framework to jointly analyze goods trade, tourism flows, and cross-border banking linkages.
Data sources emphasized: granular bilateral trade, tourism, and flight capacity data.
Publication details:
- Authors: JaeBin Ahn, Nalisa Marieatte, Philipp-Leo Mengel, David Moore, Josefine Quast, Qingyu Tao, Hou Wang
- Date: May 15, 2026
- Pages: 46
- Volume: 2026
- Issue: 095
- Series: Working Paper No. 2026/095
- DOI: https://doi.org/10.5089/9798229045285.001
- ISBN: 9798229045285
- ISSN: 1018-5941

Three main contributions:
- Provides a unified empirical assessment of Caribbean external connectivity by jointly analyzing goods trade, tourism flows, and cross-border banking linkages within a consistent gravity-model framework.
- Presents new evidence on the role of physical connectivity—shipping and air transport—in shaping both import source concentration and tourism inflows, drawing on granular bilateral trade, tourism, and flight capacity data.
- Shows that, while financial connectivity matters in a global context, it is not the primary binding constraint for Caribbean economies; instead, limited physical connectivity emerges as the more decisive factor shaping trade patterns and external vulnerabilities.
Comparative insight:
- Financial connectivity has relevance globally, but for CARICOM economies the binding constraint is limited physical connectivity (shipping and air transport) affecting import concentration and tourism inflows.

Physical connectivity:
- Shipping and air transport are central determinants of import source concentration.
- Flight capacity and transport linkages are linked to tourism inflows.
Financial connectivity:
- Cross-border banking linkages are analyzed but are not identified as the primary constraint for Caribbean external integration.
Analytical framework:
- Gravity-model framework enables joint assessment across goods trade, tourism, and banking linkages to isolate the roles of physical and financial connectivity.

Subject: Economic sectors, Exports, Imports, International trade, Tourism, Trade balance, Trade in goods
Keywords include: banking linkages and trade finance, banking-trade nexus, Caribbean, CARICOM economy, Central America, concentration, economic integration, Exports, Global, goods trade, IMF working papers, Imports, International and interregional trade, shipping and air connectivity, South America, Sub-Saharan Africa, Tourism, Trade balance, Trade in goods, trade pattern, trade vulnerability and resilience, trade-finance linkage, transportation supply, travel demand

Source: Mind the Gaps: Caribbean Trade Patterns and the Connectivity Constraint (IMF Working Paper No. 2026/095).