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

Yongzheng Yang, Hong Chen, Shiu raj Singh and Baljeet Singh

No 2013/104, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; financial crisis; PIC economy; economic recovery; PIC government; small states; Pacific island countries; growth; convergence; remoteness; volatility; aid; investment exports; trade pattern; growth rebound; growth performance; PIC growth rebound; PIC export; visitor arrival; Exports; Transportation; Real exchange rates; Imports; Competition; Global; Australia and New Zealand; Pacific Islands; Asia and Pacific (search for similar items in EconPapers)
Pages: 44
Date: 2013-05-09
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Citations: View citations in EconPapers (8)

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