Development and Stabilization in Small Open Economies Theories and Evidence from Caribbean Experience
This book analyses and explains the nature of the economies of small countries and territories. It includes an assessment of material prosperity in 41 small open economies worldwide, with case studies focusing on the Caribbean and Central America, with a review of the development of their economies in recent decades. The volume recommends a suite of economic policy tools for the management of these economies, demonstrating how these may best be employed in economies that live and breathe through international commerce. Among observations of interest is the fact that the devaluation of the local currency of a small nation makes the country worse off; even a currency that maintains its value is little more than a trophy, of little value if it is not readily convertible into US dollars. Also, that while government policies affect international competitiveness and a small country's growth prospects, more important is how governments use additional resources to improve the quality of health and educational services. Moreover, economic windfalls such as the discovery of mineral resources seldom bring prosperity commensurate with their economic value, and never in the short run.
The volume will offer invaluable information and analysis to researchers and policy makers investigating small open economies.
Section A. Country, Regional and Comparative Studies: The Varieties of Economic Performance in SOEs
2 Human Development and Economic Stabilization: Comparative SOE Experiences; 3 Selected Country Experiences; 4 The Sources of Foreign Exchange in Caribbean and Central American Countries; 5 Economic Integration in the Caribbean
Section B. Monetary, Fiscal, Financial and Exchange Rate Policy in the Small Open Economy
6 A Policy Model for Stabilization and Growth in the Small Open Economy (SOE); 7 Targeting the Exchange Rate using Fiscal Policy to Adjust Aggregate Expenditure; 8 International Competitiveness with an Exchange Rate Anchor; 9 The Uses of Monetary Policy in SOEs; 10 Finance, Development and Stability in the Small Open Economy; 11 Currency Unions and Dollarization: the Obsolescence of the Currencies of SOEs
Section C: Tools and Practical Considerations for the Economic Policy Maker
12 A Model and Framework for Economic Policy Design and Implementation in SOEs; 13 Size Matters: Small Economies need Different Strategies for Stable Economic Development; 14 What’s Wrong with Economics? The Limits of Economic Theory and Practice
Section D. Political Economy and Institutions
15 The Small Open Economy: Central Banking for the Real World; 16 Sovereignty, History, Geography, Technology and the Degrees of Freedom for Economic Policy; 17 Measuring Material Well-being ; 18 Globalization is not a Choice; it is a Statement about our World; 19 Practical Guidance for Policy Makers in Small Open Economies
'I would like to start by congratulating DeLisle Worrell for authoring such an interesting and inisghtful book.'
- Professor Lino Brigugilio, Islands and Small States Institute, University of Malta
'In the Caribbean there is no discernable effort to implement ideas similar to Worrell’s. Even so, in this path-breaking study he has successfully established that there is a path by which small societies can experience economic development.'
- Professor Jay Mandle, Colgate University, Emeritus
"This book makes a valuable contribution to the analysis of the economic problems facing small developing states, particularly in the Caribbean."
- Bert van Selm, Finance and Development, June 2023.
“Worrell’s Development Stabilization in Small Open Economies is highly recommended not only for Caribbeanists, but also those interested in challenges faced by small open economies, students, and policymakers—including those in multinational organizations.”
- Scott MacDonald, Global Americans, June 14, 2023.