Role of Money in Smaller Pacific Island Countries

Table 5

Long-run estimates for output in four PICs.

Country	LM2	LIR	LER	Diagnostic tests
Samoa	0.290*** (25.439)	−0.718*** (−12.528)	−0.281*** (−4.597)	JB = 10.631 [0.2235]; AR(1) = 8.336 [0.9382]; AR(2) = 10.771 [0.8233];
Solomon Islands	0.803*** (15.550)	−0.165* (−2.021)	−0.511*** (−4.774)	JB = 8.331 [0.4018]; AR(1) = 14.725 [0.5448]; AR(2) = 14.674 [0.5486];
Tonga	0.297*** (38.547)	−0.523*** (−10.826)	−0.267*** (−9.557)	JB = 10.195 [0.2516]; AR(1) = 16.454 [0.4217]; AR(2) = 12.329 [0.7210];
Vanuatu	0.204** (2.655)	−0.715*** (−8.373)	−0.413 (−1.236)	JB = 12.875 [0.2108]; AR(1) = 12.791 [0.6880]; AR(2) = 15.375 [0.4973];

Notes: Values in bracket [ ] are probability value of the test statistics. Values in parentheses ( ) are 𝑡 value of the test statistics. JB is Jarque-Bera test, null hypothesis: normal residuals; AR(1) is Breusch-Godfrey serial correlation LM test with lag 1, null hypothesis: no autocorrelation.
*, **, and ***indicate significance at the 10, 5, and 1 percent levels, respectively.