The financial and banking crises in USA in late 2007 led to a decline in economic activities in the industrialized countries, triggering a world-wide recession since then. The ongoing global economic downturn has brought into sharp focus the subject of macroeconomic interdependence of Pacific...

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...

The financial crisis in USA in late 2007 led to fall in economic activities in the industrialized countries. A global recession was triggered, with resulting decline in imports from Pacific island countries (PICs) and falling tourism earnings. Monetary policy options, which are available to six...

Amongst the 14 Pacific island countries, Vanuatu is unique in many respects. It has no exchange controls. Further, it allows full freedom for its citizens and resident expatriates alike to hold domestic bank deposits in any major currency of their choice. The country has adopted a fixed exchange...

The Central Bank of Solomon Islands (CBSI) was established in 1983 with the objective of maintaining price and exchange rate stability. In the 1980s and 1990s, CBSI was forced to finance the government borrowing requirements as well. Ethnic violence in 1999 and subsequent efforts for restoration...

There has been a general consensus among economists that while the long-run effects of money are felt only on prices with no impact on real variables, monetary policy changes do have important short-run effects on real variables. The objective of the paper is to investigate whether money has...

For successful monetary policy formulation and implementation, monetary authorities need to establish the existence of a stable relationship between reserve money and money supply so that changes in reserve money manipulated by policy changes can have desirable, intended effects on money stock....

None of the 14 Pacific Island countries (PICs), except Papua New Guinea has any fossil fuel resources. Consequently, all the 13 PICs are totally dependent on oil imports for their economic activities. Recent surges in oil prices have had serious economic repercussions on economic growth. This...

This paper seeks to investigate connection between current account deficits in the balance of payments and domestic budget deficits in Vanuatu. Based on the results of an empirical analysis of data covering a 23-year period (1983- 2005), this paper concludes that there is strong evidence to...