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Article Number - 0E68ED864824

Vol.9(6), pp. 54-61 , June 2017
DOI: 10.5897/JEIF2017.0847
ISSN: 2006-9812

Full Length Research Paper

The impact of capital flight from beautiful places: The case of the small open economy of Trinidad and Tobago

Michelle Salandy
  • Michelle Salandy
  • University of the West Indies, Trinidad and Tobago.
  • Google Scholar
Lester Henry
  • Lester Henry
  • University of the West Indies, Trinidad and Tobago.
  • Google Scholar

 Received: 20 April 2017  Accepted: 27 May 2017  Published: 30 June 2017

Copyright © 2017 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0

This paper examines the relationship among capital flight, domestic investment and economic growth in the small resource based economy of Trinidad and Tobago. The study utilized capital flight estimates from previous work. A Vector Error Correction Model (VECM) combing short run and long run analysis is presented. The results confirm the a priori expectation that the financial haemorrhage of capital flight is a fundamental problem, which is affecting both the levels of domestic investment and economic growth. Therefore, a reduction of capital flight may provide a stimulus to the overall economy. These findings provide clear evidence of the harmful effects of capital outflows and provide support for the potential re-introduction of capital controls.


Key words: Capital flight, domestic investment, economic growth, Trinidad and Tobago.

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APA Salandy, M., & Henry, L. (2017). The impact of capital flight from beautiful places: The case of the small open economy of Trinidad and Tobago. Journal of Economics and International Finance, 9(6), 54-61.
Chicago Michelle Salandy and Lester Henry. "The impact of capital flight from beautiful places: The case of the small open economy of Trinidad and Tobago." Journal of Economics and International Finance 9, no. 6 (2017): 54-61.
MLA Michelle Salandy and Lester Henry. "The impact of capital flight from beautiful places: The case of the small open economy of Trinidad and Tobago." Journal of Economics and International Finance 9.6 (2017): 54-61.
DOI 10.5897/JEIF2017.0847

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