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This paper investigates the empirical relevance of the permanent income - life cycle hypothesis under rational expectations within the context of the small open developing economies of the Caribbean region. Generally, little work has been done on testing the REPIH's validity in LDC's; our research was unable to unearth studies of the REPIH for the Caribbean and only a few studies which dealt with the general subject of private consumption behaviour. This study thus attempts to fill this perceived void in the empirical Caribbean literature. (Also published in North American Journal of Economics & Finance, 3(1):21-37)