Abstract
Small island nations offer the sort of natural experiment that economists prize. The Caribbean and Oceania are presumed to be subject to high prices and heavily reliant on trade. The structure of small island trading economies might be expected to increasingly resemble their closest and largest neighbors. Instead, they closely resemble countries with the deepest cultural connection. Their industrial structure is related to the Gravity Theory of trade.
A comparison of Cuba and Australia shows how totally different political systems do not distort the relation of agriculture to wealth.
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Notes
The word “theory” is most often used to imply guesswork or an abstract idea unrelated to practical reality. Instead it should be used to mean an explanation for the way that things behave. In this case, the gravity theory is simply an explanation for the amount of trade between countries based on some of their physical features.
For a detailed treatment of cultural persistence, see D. Campbell; History, Culture, and Trade: A Dynamic Gravity Approach, UC Davis Working Paper, 2010. In Puerto Rico’s case, its full economic integration with the US renders it irrelevant to this issue because it functions as a US state instead of an independent trading nation.
Cuba’s four main trade partners in 2006 were Netherlands, Canada, Venezuela and China. See Cuba’s statistical service; Oficina Nacional de Estadisticas www.one.cu/aec2006/anuariopdf2006/capitulo7/VII.5.pdf
See Australia’s Department of Foreign Affairs and Trade http://www.dfat.gov. au/publications/tgs/index.html
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© 2013 Joe Atikian
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Atikian, J. (2013). The Isolated Islands. In: Industrial Shift: The Structure of the New World Economy. Palgrave Pivot, New York. https://doi.org/10.1057/9781137340313_7
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DOI: https://doi.org/10.1057/9781137340313_7
Publisher Name: Palgrave Pivot, New York
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