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Pacific island countries (PICs), which attained political independence, are open economies with very small manufacturing base and narrow range of exports of copra and tuna. They are highly dependent on imports ranging from food and mineral fuels to intermediate and capital goods and transport machinery. Four of the 14 PICs, namely Samoa, Solomon Islands, Tonga, and Vanuatu, have independent currencies with usual paraphernalia of central banks under fixed exchange rate regimes. Their financial sectors are small and with undeveloped money and capital markets. The nominal exchange rate as an anchor has served the four PICs well by keeping inflation low. The objective of the paper is to investigate whether money has played any significant part in output growth as well as determination of prices in PICs. The findings are that broad money (M2) and exchange rate have a long run as well as short-run casual relationship with both output and prices in all PICs. [ABSTRACT FROM AUTHOR]

In the context of the current recession in industrialized countries and the resultant dim prospects for exports from small Pacific island countries, mobilization of foreign exchange earnings assumes considerable importance. The dependency of Samoa and Tonga on inward remittances is well known, as the two Polynesian island countries in recent years have been among the first top ten remittance recipient countries of the world. This paper examines the long-run nexus between economic growth and inward remittances during a three-decade period (1981-2008). The paper also discusses some important policy implications arising out of the study's findings. [ABSTRACT FROM AUTHOR]

Remittances have been a great support to Pacific island countries (PICs). Aside from providing additions to domestic savings and, hence, real resources, they have been one of the major sources of foreign exchange earnings. In the context of falling exports and limited options to diversify their exports, inward remittances have assumed greater importance. This paper examines the nexus between growth and remittances in Samoa. [ABSTRACT FROM AUTHOR]

The article discusses the results of a study on the endogeneity of money in several Pacific Island countries (PIC) using some econometric methods. It states the statistical significance of a narrow money, which would indicate the possibility that an increase in the reserve would result in greater narrow money in the long term. Based on Granger Casuality Test, a bi-directional causality was observed between aggregates and reserve money for Fiji and Vanuatu. It was noted both Fiji and Vanuatu cannot depend on reserve money.

Pacific island countries (PICs), ever since their independence during the second half of the last century, have been among the world's top ten recipients of official development assistance (ODA) on a per capita basis. Until the mid 1990s, most of them were receiving aid from their erstwhile colonial masters for budgetary support. With the introduction of reforms in ODA delivery in the late 1990s with focus on program and project-tied aid, it was expected that aid would directly facilitate creation of much-needed growth enhancing infrastructures, physical as well as social, since domestic savings were found to be insufficient to finance them. However, continued stagnation in some PICs and deterioration in some others have been causing concerns. This paper seeks to examine the effectiveness of aid by undertaking a case study of Fiji, which has a longer time series data needed for econometric investigation. Based on the study's findings, the paper lists some policy conclusions relevant to the region. [ABSTRACT FROM AUTHOR]

This paper examines the case for adopting the Australian dollar as a common currency among the island countries in the South Pacific. The proposal of a single currency was informally floated by Australia at the Pacific Forum Leaders Meeting in Auckland, in August 2003. The Pacific Forum consists of 14 developing island countries and the developed countries in the region, namely, Australia and New Zealand. In early 2003, a committee of the Australian Senate recommended adoption of a single currency as a possible remedy to meet the deteriorating economic situations in the Pacific island countries, arising out of poor fiscal discipline and failure to effectively use external aid inflows. Successful adoption of a single currency with either a new currency or an existing currency of a dominant partner in trade and development requires the fulfillment of various prerequirements, which are well known as optimum currency area conditions. The paper assesses the feasibility of the proposal in the light of these conditions and concludes that the time for adoption has not yet arrived. [ABSTRACT FROM AUTHOR]

In the context of the ongoing trade dispute between China and the United States, our study attempts to investigate the sensitivity of global commodity prices to the appreciation and depreciation of renminbi (RMB). Using quarterly data of 1994–2016, we reach three notable findings based on linear and non-linear specifications of autoregressive distributed lag (ARDL) model. First, the global price for selected agricultural commodities is sensitive to the appreciation of RMB, exercising downward pressure on agricultural commodity markets. Second, the global price for crude oil is found to react negatively to real appreciation of RMB. Third, the global price for selected metal commodities is found to respond negatively to changes in RMB. Based on these findings, we suggest China adopts a one-off appreciation instead of tariffs on imported commodities to prevent the fluctuation of commodity prices and realize the self-sufficiency goal. [ABSTRACT FROM AUTHOR]

The Pacific island countries (PICs) have been among the world's top ten recipients of official development assistance (ODA) on a per capita basis. This paper seeks to examine the effectiveness of external aid by undertaking a panel data study covering five countries in the South Pacific, namely Fiji, Samoa, Solomon Islands, Tonga and Vanuatu utilizing the annual data over a twenty-five year period. [ABSTRACT FROM AUTHOR]