Before and After the Global Financial Crisis : Evaluating the Caribbean's Synchronization with Global Engines of Growth

Before and After the Global Financial Crisis : Evaluating the Caribbean's Synchronization with Global Engines of Growth

In spite of the United States' recovery, most Caribbean nations are still struggling in the aftermath of the 2007–08 global financial crisis. This paper examines this slow growth recovery through the analysis of how the Caribbean's growth...

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Bibliographic Details
Main Authors:	Kouame, Auguste, Reyes, M. Ivanova
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2016
Subjects:	ECONOMIC BOOM GROWTH RATES MONETARY POLICY ECONOMIC GROWTH OIL PRICE SIGNIFICANT EFFECT SUPPLY CURVE FIXED EFFECT DIRECTION OF TRADE NORMAL DISTRIBUTION DOMESTIC CONDITIONS LAGGED GROWTH MACROECONOMIC POLICY NOMINAL GROSS DOMESTIC PRODUCT DEVELOPING COUNTRIES EXPORTS ELASTICITY CURRENCY UNION ECONOMETRIC MODELING PRICE INDICES ECONOMIC STRUCTURE GROWTH MODEL WORLD DEVELOPMENT INDICATORS VARIABLES SLOWDOWN ANNUAL GROWTH BENCHMARKS INPUTS SHORT-TERM IMPACT INFLATION TRENDS ECONOMIC OUTLOOK ECONOMIC ACTIVITY EFFECTIVE EXCHANGE RATE LABOR MARKET STANDARD DEVIATION INFLUENCE ECONOMIC SLOWDOWN EMPIRICAL RESULTS GLOBAL ECONOMY CURRENCY NATURAL DISASTER ADVANCED ECONOMIES GOLD HIGH CONCENTRATION MARKET DYNAMICS WORLD ECONOMIES GLOBALIZATION EASTERN CARIBBEAN CURRENCY UNION DEPRECIATIONS EXPLANATORY VARIABLES BUSINESS CYCLE OPEN ECONOMY ECONOMIC SIZE DIRECT INVESTMENT EXPANSIONARY PHASE OUTPUT GROWTH AVERAGING GROSS DOMESTIC PRODUCT AVERAGE GROWTH COMMODITY PRICE EXTERNAL FACTORS GLOBAL ECONOMIES UNEMPLOYMENT DATA AVAILABILITY ECONOMIC IMPACT FIXED EFFECTS ESTIMATOR ECONOMETRIC ANALYSIS OPTIMUM CURRENCY AREA UNEMPLOYMENT RATE STABLE GROWTH FINANCIAL CRISIS DEPENDENT VARIABLE GROWTH PROSPECTS POLICY MAKERS COMPETITIVENESS FOREIGN DIRECT INVESTMENT STRUCTURAL BREAK PRICE OF OIL MACROECONOMICS WORLD ECONOMY DEMAND FUNCTIONAL FORM NEGATIVE EFFECT ECONOMY RESPONSE TO SHOCKS REAL EXCHANGE RATE GLOBAL CONDITIONS ECONOMICS DIVERSIFICATION REGRESSION ANALYSIS DOMESTIC DEMAND FIXED EFFECTS PRIMARY COMMODITIES MACROECONOMIC VARIABLES BUSINESS CYCLES DEMANDS TRADE STANDARD DEVIATIONS GDP GOODS DOMESTIC ECONOMY REAL DEPRECIATIONS GROWTH RATE BILATERAL TRADE GROWTH PERFORMANCE SUPPLY CONTROL VARIABLES CROSS COUNTRY COUNTRY CHARACTERISTICS GLOBAL DEMAND POLICY RESEARCH HIGH GROWTH EXCHANGE RATE REAL EFFECTIVE EXCHANGE RATE REMITTANCES COMMODITY PRICES OUTCOMES TRADING PARTNERS COUNTRY SPECIFIC CONTROL VARIABLE FINANCIAL CONSTRAINTS DEVELOPMENT INDICATORS POSITIVE EFFECTS PRICE RIGIDITY PRODUCTION COSTS ECONOMIES TRADE STATISTICS DEVELOPMENT POLICY GROWTH
Online Access:	http://documents.worldbank.org/curated/en/2016/01/25832141/before-after-global-financial-crisis-evaluating-caribbeans-synchronization-global-engines-growth http://hdl.handle.net/10986/23718

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Summary:	In spite of the United States' recovery, most Caribbean nations are still struggling in the aftermath of the 2007–08 global financial crisis. This paper examines this slow growth recovery through the analysis of how the Caribbean's growth relates to that of key drivers of the global economy. The paper explores whether the region's links with some important global partners could be behind the sluggish post-crisis recovery. The paper analyzes the economic growth of Caribbean countries as a function of the growth in key global partners and of country-specific characteristics. The findings attribute an important role to the European Union and the United States in the outcomes for the region, especially in services-oriented economies. The findings show that when these nations grow, or when they are in an expansionary cycle, the Caribbean's growth responds positively but less than proportionally. Consequently, the slow recovery in the Caribbean region is attributed to the persistent sluggishness in the European Union and the fact that the U.S. recovery is still nascent and not quite robust.