Navigating Structural Vulnerabilities in Small Open Economies: Eight Interconnected Case Studies from Jamaica and Trinidad & Tobago
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Introductory Excerpt
This doctoral applied project examines how financial and policy decisions are made under
conditions of uncertainty and structural constraint in small open economies. Using a
qualitative, multi-case design, the study develops and analyzes eight interconnected
teaching cases, seven based in Jamaica and one in Trinidad and Tobago, to explore how
macro-financial vulnerabilities emerge, propagate, and are managed.
The project is motivated by a gap between traditional finance theory and the realities of small
open economies. Most financial frameworks are developed in large, deep markets and rely
on assumptions that do not consistently hold in environments characterized by shallow
markets, limited policy space, and high exposure to external shocks. This disconnect is also
reflected in teaching, where there is a shortage of contextually relevant case materials,
particularly in the Caribbean.
The study adopts a qualitative, library-based methodology using publicly available data. The
unit of analysis is the decision made under constraint, with emphasis placed on decision
logic rather than outcomes. Cross-case synthesis identifies recurring patterns across four
decision environments: external shock exposure, financial system transmission, market
response and investor decision-making, and policy and institutional response.
A key contribution is the development of a systemic integration framework that maps these
environments onto three interacting layers (outer, middle, and inner), demonstrating that
vulnerability is both distributed and transmitted across the system. Shocks do not remain
localized; they propagate across layers, transforming into broader macro-financial
challenges.
The findings show that small open economies are structurally distinct from large, developed
economies. With limited bu􀆯ers and constrained policy space, shocks are amplified rather
than absorbed.
The project contributes to theory by introducing a system-based view of vulnerability, to
practice by offering a structured way to evaluate decisions under constraint, and to teaching
by providing flexible, contextually relevant cases that can be used individually or as an
integrated system.
conditions of uncertainty and structural constraint in small open economies. Using a
qualitative, multi-case design, the study develops and analyzes eight interconnected
teaching cases, seven based in Jamaica and one in Trinidad and Tobago, to explore how
macro-financial vulnerabilities emerge, propagate, and are managed.
The project is motivated by a gap between traditional finance theory and the realities of small
open economies. Most financial frameworks are developed in large, deep markets and rely
on assumptions that do not consistently hold in environments characterized by shallow
markets, limited policy space, and high exposure to external shocks. This disconnect is also
reflected in teaching, where there is a shortage of contextually relevant case materials,
particularly in the Caribbean.
The study adopts a qualitative, library-based methodology using publicly available data. The
unit of analysis is the decision made under constraint, with emphasis placed on decision
logic rather than outcomes. Cross-case synthesis identifies recurring patterns across four
decision environments: external shock exposure, financial system transmission, market
response and investor decision-making, and policy and institutional response.
A key contribution is the development of a systemic integration framework that maps these
environments onto three interacting layers (outer, middle, and inner), demonstrating that
vulnerability is both distributed and transmitted across the system. Shocks do not remain
localized; they propagate across layers, transforming into broader macro-financial
challenges.
The findings show that small open economies are structurally distinct from large, developed
economies. With limited bu􀆯ers and constrained policy space, shocks are amplified rather
than absorbed.
The project contributes to theory by introducing a system-based view of vulnerability, to
practice by offering a structured way to evaluate decisions under constraint, and to teaching
by providing flexible, contextually relevant cases that can be used individually or as an
integrated system.
