An Analysis of Money Laundering and Economic Growth in Trinidad and Tobago

This paper investigates the relationship between money laundering and economic growth in Trinidad and Tobago. It utilizes annual secondary time series data for the period 1990 to 2017. The proxy of fraud offences and narcotics is used to estimate the volume of money laundering. Cointegration analysis and Error Correction Modelling is employed to test the long-run and short-run relationship between money laundering and economic growth. Long-run analysis revealed that there is a positive significant relationship between fraud offences and economic growth while narcotics offences maintained a negative significant relationship with economic growth at a 5% significance threshold. In the short-run, estimations revealed that only fraud offences had a significant negative impact on economic growth.