Macroeconomic reform and resilience building in small states

Abstract

Sound macroeconomic policies are key requirements for building economic resilience in small states to enable them to withstand the impacts of exogenous shocks, including weatherrelated disturbances. The capacity to forge ahead in the midst of adverse circumstances through various measures for promoting and sustaining a higher degree of self-reliance in small states, often undergoes serious setbacks due to frequent policy slippages, which exacerbate domestic and external imbalances. This chapter reviews the requisites for sound macroeconomic policies and refers to steps taken by governments of small states in recent years to nurture economic resilience.