Does Size Matter? Yes, If You are Caribbean!

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Date
Sep 2013
This policy brief reviews whether the size of a country limits economic growth. Diseconomies of scale, indivisible fixed costs and geographic barriers represent intrinsic characteristics of small economies that might hinder economic growth. However, while some small economies have overcome the size hurdle, Caribbean countries have not. There is a widening growth and GDP per capita gap between the Caribbean and other small economies. Further, the Caribbean countries┬┐ ability to generate employment for given growth has fallen over time and relative to other small economies. It is not size that is the problem.