By Alvin G. Wint
Explores the demanding situations and possibilities linked to expanding competitiveness in small, constructing economies. in accordance with learn carried out within the Caribbean.
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Extra resources for Competitiveness in Small Developing Economies: Insights from the Caribbean
The expected sign for the inflation variable was negative. Hypothesis 4, on the impact of infrastructure, was tested using the variable “paved roads as a percentage of total roads”, and hypothesis 5, on the impact of education, was tested using the variable “per cent of relevant age group enrolled in secondary education”. Both the infrastructure and education variables were expected to have positive signs. 2 provides a summary of the variables used and their expected signs. Information on the inflation variable was obtained from the IMF’s International Financial Statistics (December 2001).
Governments, in turn, are often reacting in response to the pressures of strong unions. Both of these factors are likely to have occurred in Jamaica, the country that was used to test the PPP theory. In the context of the probability of exchange rate changes leading to inflation, it is clear why fixed exchange rates have contributed to more stable macroeconomies. Although this chapter concludes that the small countries of the Caribbean have benefited from their pegged exchange rate systems, it does not advocate a universal movement among developing countries, even small ones, to exchange rate pegs or other types of fixed exchange regimes.
Bermuda, with its ten tourists per capita, and a world leader in offshore insurance, boasted one of the world’s highest per capita incomes. Cayman’s very high per capita income level resulted from an active programme of international company registration, which saw the economy registering over forty thousand international companies per year in the late 1990s, in addition to its thirteen tourists per capita. To be sure, many of these economies have been listed as tax havens by the Organisation for Economic Cooperation and Development (OECD).
Competitiveness in Small Developing Economies: Insights from the Caribbean by Alvin G. Wint