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

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  • Yongzheng Yang
  • Hong Chen
  • Shiu raj Singh
  • Baljeet Singh

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.

Suggested Citation

  • Yongzheng Yang & Hong Chen & Shiu raj Singh & Baljeet Singh, 2013. "The Pacific Speed of Growth: How Fast Can It Be and What Determines It?," IMF Working Papers 2013/104, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2013/104
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    1. Dibyendu Maiti & Sunil Kumar, 2016. "Regional agreements, trade cost and flows in the Pacific," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(2), pages 181-199, August.
    2. Emmanuel Olusegun STOBER, 2016. "Crude Oil Price Shocks And Macroeconomic Behavior In Nigeria," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 5(1), pages 56-66, JULY.
    3. World Bank Group, "undated". "World Bank East Asia and Pacific Economic Update, October 2014 : Enhancing Competitiveness in an Uncertain World," World Bank Publications - Reports 20522, The World Bank Group.
    4. Brito, Joao, 2015. "Country Size and Determinants of Economic Growth: A Survey with Special Interest on Small States," MPRA Paper 61273, University Library of Munich, Germany.
    5. Bretschger, Lucas & Suphaphiphat, Nujin, 2014. "Effective climate policies in a dynamic North–South model," European Economic Review, Elsevier, vol. 69(C), pages 59-77.
    6. Evangelos V. Dioikitopoulos & Christos Karydas, 2024. "Sustainability Traps: Patience and Innovation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(6), pages 1425-1444, June.
    7. Hong Chen & Lanieta Rauqeuqe & Shiu Raj Singh & Yiqun Wu & Yongzheng Yang, 2019. "Pacific Island Countries: In Search of a Trade Strategy," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(12), pages 56-80, September.

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